Most Americans depend on their vehicles to get from place to place. In a recent year, approximately 20 percent of US drivers leased their cars instead of buying them. Leasing offers several advantages over purchasing, such as lower payments, fewer repair costs, and getting a new car at the end of the lease term.
However, what happens if you have a total leased car? What are your legal options, and who pays if another party caused the crash? The information below will help you understand what to do if you total your leased vehicle. Then, speak to an experienced auto accident attorney in your city today to find out if you have a case. You can receive compensation in a car accident lawsuit if another person’s negligence injured you.
Schedule Your Free Consultation
What Are Common Car Accidents?
Whether you own or lease your car, several common auto accidents severely injure and kill innocent motorists every year. They are:
- Rear-end crashes: Rear-end accidents are common because drivers may be distracted and hit others from behind. Rear-end collisions also occur because of driver fatigue. A rear-end accident can cause a serious head injury, neck injury, broken bones, and other severe injuries.
- Intersection crashes: Intersection accidents are often referred to as T-bone collisions. This crash happens when another car runs a red light or stop sign and slams perpendicular to another vehicle. T-bone crashes often trigger debilitating injuries because the side of a car offers little protection in the accident.
- Head-on crashes: Head-on collisions are relatively uncommon but almost always total the involved vehicles and cause severe injuries. This type of accident usually happens when a driver makes an unsafe pass on a two-lane road and hits an oncoming car.
Any of these common auto accidents can total a vehicle and cause severe injuries. Have a car accident attorney review your case if another driver hits and injures you.
Who Owns A Leased Car?
If you leased your car, you do not own the vehicle. Instead, the leasing company owns your car, and you rent it for the duration of the lease. The payments you make every month to your leasing company are different from auto loan payments. The monthly payments don’t build equity in the vehicle.
The leased car must be returned to your leasing provider at the end of the term. Usually, the lease agreement has a buyout option if you want to buy the car. You can buy the vehicle outright or do so with an auto loan.
The leasing company usually will lease or sell the vehicle, so you must return it in good shape. The lease agreement has liability terms if the car is damaged or totaled.
Know The Auto Insurance Requirements For Your State
You must know your state’s insurance requirements if you are in a car accident caused by another party. For example, Nevada’s auto insurance requirements are:
- Liability insurance: $25,000 for bodily injury or death per party, $50,000 for bodily injury per incident, and $20,000 for vehicle damage. Your liability policy covers damages caused by you or others in the crash.
- Underinsured and uninsured insurance: This coverage isn’t required in Nevada and many states, but it’s helpful if another driver totals your leased car and they don’t have coverage. A car accident attorney can help file a claim for compensation on your policy if another driver totals your leased car.
- Personal injury protection: PIP coverage helps cover medical expenses regardless of fault after an accident. Many states, including Nevada, don’t require PIP insurance, but having it is helpful. You can quickly obtain coverage on your policy after a crash, then your insurance provider may seek reimbursement if another party is blamed for the accident.
Nevada is an at-fault state, which means the liable driver’s insurance company will decide if your leased vehicle is totaled. So, if another driver hits your leased car, their insurance company will determine if the vehicle is totaled.
What Is A Totaled Car?
Kelley Blue Book states that the insurance company will total a vehicle if the cost to repair it is as much as what it was worth before the accident. Also, insurance companies frequently total vehicles even if the damage is less than the market value. In many states, the insurance company will total the vehicle if the damage is 60 percent to 70 percent of the car’s value.
Insurance companies often total cars that aren’t entirely totaled because there can be additional damages that the adjuster didn’t see. Decisions on totaling or repairing a car are usually made by reviewing photos of the vehicle. However, when a mechanic starts disassembling the car to fix it, they may find more damage.
What To Do After A Leased Car Accident
Another driver hits you in an intersection, and you think your leased car is totaled. What should you do? The laws of every state require drivers to check for injuries and call first responders for anyone who is hurt. You also should do the following if you have a leased vehicle:
- Call the police when a severe accident with a totaled vehicle or injuries occurs. Your insurance company and that of the liable driver will want to see the police report. It also will be helpful to your auto accident attorney if you decide to file a lawsuit later.
- Talk to your auto insurance company: You should call your insurance company immediately to report that another driver totaled your leased vehicle. The insurance provider can start on your claim and may contact the other driver’s insurance if they caused the accident.
- Talk to your auto dealership: Your totaled car was leased, so it still belongs to the dealership. You need to understand the terms of your contract, and you usually need to call the dealer if there has been a crash. Tell the dealership you are talking to your insurance company and will keep them informed if the vehicle is deemed totaled. You may need to return your car to a location the dealer specifies.
- Speak to a car accident attorney: An auto accident is more complex if you leased the car and another driver totaled it. A personal injury attorney can help sort out the legal details and obtain compensation for your losses.
What’s Next If Your Leased Car Is Totaled?
Suppose another driver runs a red light and slams into your leased vehicle. Your insurance company states that the car is totaled. This can happen if the cost of repairs is close to the vehicle’s value. For example, if the car repairs are $30,000 but the vehicle is only worth $35,000, there’s a good chance the car will be declared totaled.
Remember that even if the car you leased is totaled, you still have a contractual obligation to make your lease payments. After a severe crash, you can still owe the leasing company payments. Unfortunately, many people who drive a totaled leased car discover they are in a worse financial state than someone who owns their vehicle outright.
Specifically, you may still owe payments on your leased vehicle after a devastating accident. Imagine - your car is totaled, you suffered an injury, and you still must make payments on the lease, even though your vehicle isn’t drivable. What do you do?
Schedule Your Free Consultation
Gap Insurance
Gap insurance often answers this problem with a totaled leased vehicle. Many auto finance experts recommend gap insurance because of the possibility of owing payments on a totaled vehicle. Gap insurance is helpful if your leased car is totaled. Gap coverage pays the difference between the value of your wrecked vehicle and what you must pay the leasing company.
For example, if your leased car is valued at $28,000 but you owe $35,000 on the lease, gap insurance would pay the $7,000 difference. Imagine if you suffered an injury in a car crash by another person and out of work. You would have to cough up $7,000 on your own! Gap coverage bridges the gap between the vehicle’s value and what you owe.
There are several scenarios in which obtaining gap insurance when you lease the vehicle is recommended:
- You have leased your vehicle.
- Your leasing lender requires you to pay for gap coverage.
- Your loan has a high rate.
- You bought the car on a 60-month or more loan.
- You didn’t make a down payment, or it was under 20 percent of your vehicle’s market value.
- You are rolling your equity from a previous car into your leased vehicle.
You shouldn’t have to pay for your costs if you didn’t cause the crash that totaled your car. However, if you have a lease and gap insurance, make sure you make the payments on time until gap insurance takes effect.
Later, you can file a claim against the at-fault party’s insurance for your losses, including anything your insurance company doesn’t cover. With your attorney’s help, it’s possible to get compensation for any lease payments you made after the accident and the expenses of starting a new lease. Of course, you also may receive payment for your medical bills, lost earnings, and pain and suffering related to the accident.
Filing A Car Accident Lawsuit When You Aren’t At Fault
Another option, if another driver hits your leased car, is to seek compensation under your state’s laws. For example, if another driver T-boned you in an intersection, totaled your car, and broke your collarbone, you can file a claim to obtain damages. You can receive money for your current and future medical bills, lost current and future earnings, and pain and suffering.
What If Your Leased Car Isn’t Totaled?
What if you are in a car accident caused by someone else, but the leased vehicle isn’t totaled? It’s essential to have full insurance coverage on your car, just like you would if you bought it. Your auto accident attorney can help file a claim on the at-fault driver’s policy. If the other driver has no insurance, a car accident lawyer may also assist in filing an uninsured driver claim on your policy if you have this vital coverage.
Seeking Compensation For A Leased Vehicle In A Personal Injury Claim
Was your leased vehicle totaled in a crash where you suffered an injury, and the other driver caused it? You can seek money for your costs and impacts of the injuries and compensation for the totaled vehicle. An experienced auto accident attorney can provide vital legal services to help:
- Help you prove who was responsible for the accident. An experienced auto accident attorney will review critical accident evidence to prove another driver violated their duty of care. Evidence proving liability includes witness statements, cell phone records, photos and video, surveillance footage of the accident, and testimony from accident reconstruction experts.
- Establish an approximate case value by understanding injury severity, lost earnings, current and future medical expenses, and pain and suffering.
- Negotiate with the liable insurance company for the best accident settlement.
- If the insurance adjuster does not offer enough money for your property damage and other losses, file a lawsuit.
A Leased Auto Accident Lawyer May Help
After a crash with a leased car caused by someone else, reviewing the legal options to maximize compensation while considering your lease terms is critical. Not all personal injury lawyers handle cases with leased cars. You should look for an experienced leased car accident attorney to help you understand how liability and leases intersect in a severe accident.
Speak To A Car Accident Lawyer Now
A serious car wreck can upend your life. Massive medical bills, pain and discomfort, and loss of income leave you scrambling to make ends meet. There are options, though, if another party caused the accident. A car accident attorney may help you obtain compensation for your economic and non-economic damages after a crash with a leased car.
Speak to an auto accident attorney in your region today in a complimentary legal consultation. There are no legal fees if your case doesn’t lead to compensation. Also, you never pay out of pocket for your legal expenses, so call today!