What Happens When You Total a Leased Car?
Quick Answer
When a leased vehicle is a total loss, the insurance company determines its cash value and pays that amount to the lease company. Unless the individual leasing the vehicle has gap coverage, he is responsible for any difference in the amount insurance pays and the terms of the lease.
Continue ReadingFull Answer
Most leases require the driver to document any damage to the vehicle in an accident. The lease company often specifies the repair shop. The shop determines the extent of the damage, cost to repair the vehicle and if it is able to repair the car so it is safe to drive again. The insurance company sometimes wants to see the damage before making a final determination of the loss. If the cost of the damage is more than the value of the vehicle, the insurance company declares it a total loss.
When an individual leases a car, the leaseholder retains ownership of the vehicle. The lease specifies that the individual leasing the automobile is responsible for maintenance, repairs and insurance. He is also responsible for paying the lease. Even if the lease includes a clause allowing the driver to buy the car at the end of the lease, until the fulfillment of the clause, the insurance company pays any losses to the lease company.
Learn more about Vehicle InsuranceRelated Questions
-
Q:
How Is a Totaled Car Insurance Value Calculated?
A: An insurance company determines the value of a totaled car by evaluating how much it costs to repair the car versus the amount the insurance company must p... Full Answer >Filed Under: -
Q:
What Counts As a Total Loss When Filing a Car Insurance Claim?
A: The term "total loss" is an insurance industry reference to a vehicle that's cost of repair exceeds its actual cash value, according to DMV.org. This means... Full Answer >Filed Under: -
Q:
What Are Some Car Insurance Policies for Classic Cars?
A: A person who owns a classic car should purchase an agreed value insurance policy, in which the car owner and the insurance agent agree on the value of the ... Full Answer >Filed Under: -
Q:
What Information Is Required to Get a Car Insurance Quote?
A: Information an insurance company requires to give a car insurance quote includes the vehicle's make, model, year and vehicle identification number, and det... Full Answer >Filed Under:
You May Also Like
-
Q:
What Is the Length of a Standard Car?
-
Q:
What Are the Parts of a Car and Their Functions?
-
Q:
How Do You Find the Gas Mileage of a Particular Model of Car?
-
Q:
What Are Some Car Companies for Hire With Drivers in the UK?
-
Q:
What Are Some Tips for Buying a Second-Hand Car?
-
Q:
How Do You Find the Correct Replacement Wiring Harness for Your Car?
