A major accident is always an incisive event, but here we look particularly at the impact of such an accident on the driver of a leased car. The crucial point is that the lessor is still the legal owner of the car. This owner therefore plays an important role in handling the damage to his car. Here you will be shown what this settlement must look like and what you need to consider. Then you can also consider these aspects when you decide on a leasing contract.
What does the insurance situation of a leased car look like?
As with any other vehicle, a leased car must be covered by a motor vehicle liability insurance policy covering damage caused by the driver. Since a leased car continues to belong to the lessor, a leasing contract usually requires the conclusion of comprehensive insurance. Note, however, that this insurance only covers the value of the car at the time of an accident. Since you will only receive a little less than the original price for a new car shortly after purchase, the amount covered by the insurance is correspondingly lower than the remaining leasing instalments, which are still due. This difference is called the gap. In addition, these outstanding installments can become due immediately, as damage that cannot be repaired economically often leads to the leasing contract being terminated by the lessor.
Insurance of the Gap
As the lessee, you can take out an additional insurance policy that covers this gap. Depending on the contract, this insurance may also provide additional benefits. These include the unused part of the down payment, the cost of a replacement vehicle for you, your deductible in the event of a total loss and salvage and travel expenses. Gap insurance is independent of normal motor vehicle insurance. So you can easily change it and the Gap Protection simply remains in place.
The details of a leasing contract
As with all contracts, it is highly recommended that you read a leasing contract carefully and call in appropriate specialists if any uncertainties arise. This could be your lawyer or perhaps the advice centre of your automobile club. Certain points of the contract can have subtle effects that are often hard for laymen to imagine. For example, it can be determined with which insurance you have to take out your comprehensive cover. In the event of damage, the decisive factor is who appoints the relevant appraisers. If this is only the lessor, this can have a significant negative effect on you. In any case, you should calculate the total costs exactly. A temptingly low leasing rate for the car can become uneconomical due to such conditions.
What do I do if there is an accident after all?
In principle, it should be noted that the lessor as the owner of the car must be involved in the whole process. Many steps are the same with every accident, with leasing cars simply still some points come in addition.
The police do not necessarily have to be called in the case of minor damage, but they do have to be called in the case of major damage. In case of doubt it is better to call them once too often than once too little. The better documentation of the accident enables a smooth handling of the accident with the insurances.
In this case, the lessor and the insurance company must be notified. This also applies in the event of theft or other damage. In serious cases such as total loss, a report must be made within 48 hours. In your interest, you should also inform the opposing insurance company together with your description of the cause of the accident.
As far as the question of guilt is concerned, you can claim compensation from the opposing insurance company if you are not to blame for the accident. If you are partly or completely to blame for the accident, the parties involved in the accident are proportionately liable for the damage to your leased vehicle. Paying these damages yourself instead of charging them to the insurance company can be an advantage for you under certain circumstances, as then your premiums will not increase. If a repair is still economically possible, it will be arranged by the lessee, i.e. by you. In this case, too, you must inform the vehicle owner. Without agreement with the lessor, you are not allowed to repair or recycle the vehicle. It may also be that you are prescribed appropriate authorized workshops, because the lessor is of course most interested in the best possible and professional execution of the repair work. If the damage is too great to make a repair economically possible, the vehicle must be used. This process is usually handled by the lessor. In most cases, the contract will then be terminated prematurely. Then you will be invoiced for the remaining and still outstanding leasing instalments and it is precisely these payments that you can insure yourself against with gap insurance.
Leasing a car is still an attractive way to get to a vehicle. However, it should be made clear again that the conditions are crucial and you cannot avoid a careful assessment of these conditions. Unfortunately, dubious providers also exist with lessors and it is first of all a question of recognising and avoiding them. Then the conditions of the leasing contract are to be co-ordinated also with your personal situation. Would you like to let other drivers take the wheel, are you interested in taking over the vehicle after the end of the contract period, what details are required of you as the lessee? It is only by assessing these points that you can answer the question of whether leasing is the right thing for you. Also consider whether a car subscription is also an option for you. The contractual details are much simpler and there is full insurance cover, especially without a gap.