Do Car Accidents Affect Lease Agreements?

After an accident with a leased vehicle, you will likely want to know if the situation is going to impact your contract with your lease provider. So, do car accidents affect lease agreements? The short answer is yes, especially if the damage is substantial. Remember: the leasing provider is the legal owner of the vehicle, but you have a responsibility to return it in good condition. Learn more in the following guide from Pfaff Leasing, where we provide an in-depth answer to the frequently asked question, “Do car accidents affect lease agreements?”

How Do Car Accidents Affect Lease Agreements in Woodbridge & Beyond?

Whether the accident was your fault or not, you must notify both your insurance company and leasing company as soon as possible after the incident. Once you’ve done that, different scenarios can play out depending on the severity of the damage sustained.

For Minor Damage

After a minor collision or fender bender, your vehicle may be repairable. The cost is often covered by the insurer, minus your deductible. Keep in mind that the vehicle needs to be repaired per the leasing company’s standards; otherwise, you may be charged extra for excessive wear and tear once your lease term is up. When in doubt about repair standards, reach out directly to your leasing provider.

For a Total Loss

If your leased vehicle has been declared a total loss by your insurer, they will usually pay the actual cash value of the vehicle directly to the leasing company. That said, you still might owe some money, as the remaining balance on your lease could be more than the vehicle’s actual cash value. This is especially common if it’s still early in your lease term. Your responsibility, then, is to pay the difference between what the insurance company paid and what you still owe on your contract. Investing in GAP insurance can minimize this expense.

Contact Us Near Toronto for More Information

If you have questions about how an accident will affect your lease, don’t hesitate to contact us. We’re here to ensure you find the right leasing solutions for your needs and the ideal vehicle for all your drives in Calgary, Woodbridge, and beyond. Get in touch today for more information.