OEM Parts Required

After an accident in a leased vehicle, you'll be required to use OEM parts for any repairs to your car or truck. This is because a lease is essentially a long-term rental agreement, and you must return the car in the same condition — minus any normal wear and tear — you received it.

It's important to understand this, because the insurance company paying for the damages may try to push back on you buying the more expensive OEM parts. An insurance company's goal is to pay as little on your claim as possible. So if the vehicle repairs can be made using cheap aftermarket parts, that's what they will want you to use.
However, the law requires liable parties to compensate victims so they return to the same position they were in before they were involved in an accident. Your leasing contract should state whether OEM parts are required. Therefore, sending the insurance company a copy of the contract with that stipulation should stop the adjuster from arguing with you about the issue and approve at least that part of your claim.

Totaled Vehicles Must Be Paid Off

The insurance company responsible for paying your claim will cut the lease company a check for the vehicle's market value if they declare it has been totaled. Unfortunately, that doesn't end your financial responsibility for the car or truck. Many leasing contracts essentially require you to buy the car if it's ever totaled in an accident.

This means that if the insurance payout is less than your lease buyout balance, you must pay the difference. For instance, if the insurance company pays $25,000 but the lease buyout for your vehicle is $35,000, then you will be responsible for paying the $10,000 balance.

However, here's where leasing a vehicle may actually make things easier than buying one. It's not unusual for leasing companies to include gap insurance on the vehicle. This type of insurance will pay the shortfall between the insurance company's payment and your lease buyout balance, so you won't have to worry about coming up with the money if your lease has this policy attached.

Unfortunately, if you don't have gap insurance, that money will have to come out of your pocket. You can try to sue the liable driver directly for the balance, but it's unlikely you'll win. As mentioned before, liable parties are only responsible for making you whole, and the courts consider a payment for the vehicle's market value — rather than the balance on your loan — adequate fulfillment of that requirement.

Lower Trade-In Value

Even if the vehicle wasn't totaled and you used OEM parts to repair it, you may still suffer when it's time to trade the vehicle in for a new one. Because the vehicle was in an accident, a dealership will typically offer you less money for it.

This is only an issue if you buy the vehicle at the end of your lease and try to trade it in. Therefore, it's important you file a claim for diminished value with the insurance company. If you adequately prove your claim, the insurance company will pay you the difference between what the vehicle should be worth and its lowered value due to the accident.

You typically won't have any problems if you return the vehicle as agreed when your lease ends, though. As long as the vehicle was repaired according to the stipulations in your contract, the leasing company will generally take the car back without any quibbling.

For more information on handling an accident claim involving a leased vehicle or assistance with litigating an accident case, give Doherty Law Firm a call.