What Happens If You Total a Leased Car? Understanding Your Rights and Responsibilities

Leasing a vehicle has become a popular choice for many Nevada drivers. Leasing lets you drive a new car without buying it for keeps, so it’s easy to understand why some drivers might prefer this arrangement.

However, crashes can happen to anyone—even if they’re leasing the vehicle they’re driving at the time of a crash. Unfortunately, you may not know what to do if you’re involved in a wreck while driving a leased car.

You might wonder: Who pays for the car? What does my lease contract say about this? Does it matter who caused the accident? There’s a lot to figure out.

That’s why we’re here. We’ve helped many people who crashed their leased cars. We’ll explain everything to you, answer your questions, and protect your rights in the aftermath of a crash in a leased car.

Our expert car accident lawyer’s goal is to fight for the best possible deal available. We can help navigate a complex case while you focus on your recovery.

Understanding What “Totaled” Means

In Nevada, a vehicle is typically considered a total loss when the cost of repairing exceeds a set part of its current value. This threshold can vary, but it’s often around 65-75% of the car’s value.

For example, maybe your leased car has an ACV of $20,000. After a crash, the repair costs are estimated at $14,000. In these circumstances, the insurance company might declare it a total loss. Usually, your insurance provider makes this decision, not the leasing company.

Immediate Steps After an Accident

If you’re involved in an accident with your leased car, follow these crucial steps:

• Ensure safety: Check for injuries and move to a safe location.
• Call the police: Report the accident and get a copy of the police report.
• Document the scene: Take photos and gather contact information from witnesses.
• Notify your insurance company: Report the accident within 24 hours.
• Contact the leasing company: Inform them about the accident immediately.

These initial steps are critical for protecting your interests and complying with your lease agreement.

Insurance Coverage: A Key Factor

The type and extent of your insurance coverage play a significant role in what happens next. Nevada law requires drivers to have the following minimum insurance coverage:

• $25,000 if only a single person gets hurt or dies
• $50,000 if more than one person gets hurt or dies in the crash
• $20,000 for damage to other people’s property

However, when leasing a car, you’re typically required to have comprehensive and collision coverage. This additional coverage is crucial in case of a total loss.

Gap Insurance: Your Financial Safety Net

Strongly consider getting gap insurance when you lease a car. Some consider it essential. If you wreck the car, gap insurance will pay what you still owe on the lease and what the car is worth now. This can save you from owing a lot of money.

To better understand why gap insurance is crucial, consider the following example: You’re two years into a four-year lease on a car with an original value of $30,000. The car is totaled, and its current market value is $20,000. However, you still owe $25,000 on the lease. Without gap insurance, you’d be responsible for paying the $5,000 difference—out of pocket.

We strongly recommend that our clients in Nevada invest in gap insurance when leasing a vehicle. If your car gets badly wrecked, having gap insurance could save you a lot of money in the long run.

The Settlement Process

If your leased car is declared a total loss, here’s what typically happens:

• Valuation: Your insurance company will determine the car’s actual cash value.
• Payoff: The insurance company will pay the leasing company the vehicle’s ACV.
• Gap Insurance: This pays the balance between the car’s worth and what you still owe.
• Lease termination: Your lease agreement will usually be terminated at this point.

It’s important to note that, depending on your lease agreement, you may still be responsible for any lease-end fees or excessive wear and tear charges. We can review your agreement and explain anything that may be confusing or relevant.

Potential Financial Implications

Even with insurance, totaling a leased car can have financial implications. Consider the following:

• Deductible: You’ll likely need to pay your insurance deductible.
• Future leases: Your insurance rates may increase, affecting the cost of future leases.
• Early termination fees: Some lease agreements include fees for ending the lease early. These fees may apply even if the reason for ending a lease early is a total loss.

At Gina Corena & Associates, we can review your lease agreement and insurance policy to help you understand your financial obligations in this situation.

When You’re Not at Fault

If another driver is responsible for totaling your leased car, you have additional options. In Nevada, you can seek compensation from the at-fault driver’s insurance for:

• Vehicle damage
• Medical expenses
• Lost wages
• Pain and suffering

In these cases, getting help from a skilled lawyer can make a big difference in getting fair payment. You might need to gather evidence showing the crash resulted from another party’s negligence. We can gather such evidence on your behalf by conducting a thorough investigation.

Negotiating with Insurance Companies

Dealing with insurance companies after totaling a leased car can be challenging. They may try to undervalue the vehicle or dispute the extent of your losses. Our skilled Gina Corena & Associates lawyers can help you talk to insurance companies. We’ll work hard to get you enough money to cover everything you lost.

Leasing Another Vehicle

After totaling a leased vehicle, you must decide what to do about transportation now. If you choose to lease another vehicle, you might face some challenges, such as:

• Higher rates: Your insurance rates may have increased due to the accident.
• Credit impact: If there were any payment delays during the claims process, your credit score could be affected.
• New down payment: You’ll likely need to make a new down payment on the new lease.

We can advise you on the best course of action based on your circumstances and financial situation.

Protecting Your Rights

Protecting your rights throughout this process is crucial. Insurance and leasing companies are primarily concerned with their bottom line, not your best interests. That’s where we come in.

At Gina Corena & Associates, we’re committed to ensuring that our Nevada clients are treated fairly and receive the compensation they deserve.

Some key points to remember:

• Don’t accept the first settlement offer without review
• Be cautious about giving recorded statements
• Save all papers and notes about the crash, including bills and records of who you talked to.
• Only sign documents with legal review.

Totaled a Leased Car? Get Help with Your Case

Totaling a leased car can be a stressful and complex situation. Understanding your rights, responsibilities, and options is crucial for navigating this process successfully. There are many factors to consider, from ensuring you have the right insurance coverage to negotiating with insurance companies and understanding the financial implications.

At Gina Corena & Associates, we’re here to guide you through this process. Our experienced team understands the intricacies of Nevada law and can help you achieve the best possible outcome. If you’ve totaled a leased car or have questions about your lease agreement, don’t hesitate to contact us for a consultation. After your accident, we’ll fight to get you fair treatment and what you deserve.

Legal Resources

• Nevada Department of Insurance: This official site offers insights into car insurance requirements in Nevada, which is essential for understanding what coverage you need when leasing a vehicle. https://doi.nv.gov/
• Insurance Information Institute: A comprehensive resource for understanding auto insurance policies, including what to do if your leased car is totaled. https://www.iii.org/