An accident in a leased car

A leased car belongs to the lender, and that changes what happens after a collision in three ways.

The repair standard is contractual. You are required to return the car in a condition the contract defines, which in practice means a repair done properly, to manufacturer procedure, with the right parts. A cheap repair that looks acceptable now becomes a charge at return.

Tell the lender. Most lease agreements require notifying the finance company of significant damage, and some require approval of the repair. Skipping this is a breach even when the repair is perfect.

Then the hard case: a total loss. If the car is written off, the insurer pays its market value, and the market value can be less than the amount you still owe under the lease. The difference is yours unless something covers it. Many leases include gap coverage; many do not. Find out which yours is now, not after — and if it is not included, it is usually cheap to add and occasionally the most valuable line in the whole agreement.

Finally, diminished value: on a leased car you generally do not benefit from a diminished value claim in the way an owner might, because you are not the one holding the depreciated asset. Ask, rather than assume, in your particular case.