Car Accidents in Leased Vehicles

Car accidents are always stressful, but when you’re driving a leased vehicle, the aftermath can be even more complicated. In Illinois, where nearly 300,000 car crashes occur annually, many involve drivers operating vehicles they do not own. Leasing has become a popular alternative to buying, especially for those who prefer to drive newer cars with updated safety features. But most drivers are surprised to learn that a car accident in a leased vehicle triggers a unique set of responsibilities. From reporting the incident to the leasing company to navigating insurance coverage and potential repair restrictions, it’s essential to understand your obligations after a crash. This blog explains what you need to know if you’re involved in a car accident while driving a leased car in Illinois, supported by current data and legal guidance.

Illinois Car Accident Statistics

Understanding the scope of car crashes in Illinois helps illustrate why being prepared, especially when driving a leased car, is critical. According to data from the Illinois Department of Transportation, there were 299,133 motor vehicle crashes in the state in 2023. Of those, 61,547 involved injuries and 1,240 resulted in fatalities. Cook County alone accounted for more than half of the state’s crashes, with over 160,000 accidents, including nearly 30,000 injury-related and 356 fatal collisions.

Although statistics specific to leased vehicles are not publicly available, considering the popularity of leasing, especially in urban and suburban areas like Chicago, Naperville, and Aurora, it’s reasonable to assume that thousands of these accidents involved leased vehicles.

What Makes a Leased Vehicle Accident Unique?

A car accident in a leased vehicle comes with added legal and contractual complications. Unlike owning a car, leasing means the vehicle belongs to a financing or leasing company. That means you must deal with more than just your insurance company, you also have to consider what your lease agreement requires.

You Must Notify the Leasing Company

Most lease agreements require you to notify the leasing company immediately after an accident, regardless of who was at fault or how minor the crash may have been. Failing to do so could violate your lease terms and result in penalties, added charges, or complications when returning the car at the end of your lease.

You’re Required to Carry Full Coverage Insurance

Illinois law mandates that all drivers carry minimum liability insurance, but leasing companies go further. Most lease contracts require:

• Collision coverage (to pay for damage to the vehicle)
• Comprehensive coverage (for theft, vandalism, or weather-related damage)
• Gap insurance (to cover the difference between the car’s value and what you owe if the vehicle is totaled)

Gap insurance is especially important. If your leased vehicle is declared a total loss after a crash, the insurance payout might not fully cover the amount you still owe under your lease. Without gap insurance, you could be responsible for paying the remainder out of pocket.

Repairs Must Meet Lease Standards

Another complication involves repairs. If your leased car can be repaired, the leasing company may require that all repairs be performed at an authorized dealership or body shop using OEM (original equipment manufacturer) parts. Using cheaper parts or cutting corners could result in additional charges or even a breach of the lease contract. If the car suffers permanent damage or diminished value, you may be held financially responsible when you return the vehicle.

Who Pays After a Leased Vehicle Accident?

Insurance Coverage Responsibilities

• If You’re At Fault: Your own collision coverage pays for the damage to the leased vehicle, subject to your deductible. The insurance company typically pays the leasing company directly.
• If the Other Driver Is At Fault: Their liability insurance should cover your vehicle damage and possibly your medical bills. However, if they are underinsured or uninsured, your own underinsured/uninsured motorist coverage may need to be used.
• If the Vehicle Is Totaled: The insurance company will pay the vehicle’s fair market value (actual cash value). If this amount is less than the remaining balance on your lease, gap insurance kicks in, if you have it.

Because of the complexity involved in calculating vehicle damage, lease balances, and insurance coverage, these claims can take longer to resolve than traditional car accident cases.

Steps to Take After an Accident in a Leased Vehicle

Knowing what to do in the minutes and days after a crash can make a significant difference in how smoothly your case progresses.

1. Check for Injuries and Call 911: Always seek medical attention for yourself and others. Call the police and request an accident report, it will be crucial for your insurance claim and for notifying the leasing company.
2. Document the Scene: Take photos of the damage, license plates, vehicle positions, traffic signs, and any visible injuries. Collect witness contact information if available.
3. Exchange Information: Get the name, insurance details, and contact information of the other driver. Note the make and model of their vehicle and whether they were driving a company or commercial vehicle.
4. Contact Your Insurance Company: Report the accident promptly. They will guide you through the claims process and help determine whether the vehicle is repairable or a total loss.
5. Notify the Leasing Company: Let the leasing company know what happened. They may have specific requirements about where repairs can be made, how estimates are handled, and what documents they require.
6. Repair or Total Loss Process: If the vehicle is repairable, follow the leasing company’s repair guidelines. If it’s totaled, your insurer will negotiate with the leasing company, and your gap coverage may be activated.

Common Causes of Accidents Involving Leased Vehicles

Leased vehicles tend to be newer and are often driven by commuters or families in busy metro areas, so it’s no surprise that they are frequently involved in some of the most common types of crashes:

• Rear-end collisions in traffic congestion
• Intersection crashes caused by failure to yield
• Weather-related accidents due to ice or poor visibility
• Distracted driving crashes due to phone use or GPS adjustments
• Parking lot collisions, often while backing out or maneuvering

Data from the Illinois Department of Transportation shows that speeding and distracted driving are leading causes of traffic fatalities and injuries in the state. Drivers leasing vehicles are not exempt from these risks and may face steep financial consequences if they’re found liable.

What to Expect When Returning a Leased Vehicle After a Crash

If your leased vehicle has been repaired after an accident, be prepared for the leasing company to perform a detailed inspection at the end of the lease term. They may check for:

• Diminished value
• Use of aftermarket parts
• Unreported damage
• Paint or structural issues

You could be charged for anything that falls outside the allowable “wear and tear” defined in your lease agreement. Keeping all repair records and working with a body shop approved by the leasing company can help you avoid these additional fees.

Contact the Award-Winning Illinois Car Accident Attorneys at John J. Malm & Associates

Car accidents involving leased vehicles require more than just basic insurance claims. You are dealing with two separate systems, insurance companies and leasing companies, both of which are concerned with protecting their bottom line. If you’re injured or facing significant financial exposure due to an accident in a leased vehicle, it’s important to talk to an experienced Illinois personal injury attorney.

At John J. Malm & Associates, we help clients across Illinois understand their rights and responsibilities after a car accident, whether they own, lease, or drive a company vehicle. We will work directly with insurance adjusters and leasing companies, calculate your damages, ensure your repairs or total loss are handled correctly, and pursue compensation for your injuries, medical expenses, lost wages, and pain and suffering.

Don’t go through it alone. Let our experienced Illinois car accident lawyers protect your rights and financial future. Contact us today for a free, no-obligation consultation.