A car lease IS a legal contract. And this contract says that the car, upon completion of the lease, will be returned in the original condition, with considerations made for normal wear and tear, and any other exceptions agreed to upon signing the lease. The first thing that needs to happen when you get in to a wreck in a leased vehicle is to determine the extent of the damages. In a best case scenario, the dollar amount required to repair the damages to the vehicle is equal to or slightly less than the amount that the insurance company will cover. The insurance company will issue a check to the person leasing the vehicle. That person is then responsible for having the leased vehicle repaired. In this scenario, the only out of pocket money to the person leasing the vehicle is the deductible. However, if the car is “totaled”, it becomes the responsibility of the person who leased the vehicle to pay for, or replace the vehicle. The leasing company will provide the amount that it determines what the car is worth. The person leasing the vehicle will receive money from their insurance company, but they are responsible for paying back the difference of what insurance pays vs. the value of the car, as defined by the lease company. Gap Insurance, if one has opted for it, will pay the difference of the “gap” between what the insurance company pays and what the person leasing the car owes.
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