Damaging a lease car can result in costly charges if it goes beyond the fair wear and tear guidelines and isn’t repaired before it’s returned. You will need to contact your provider at the earliest opportunity for a list of approved garages before booking it in and paying for repairs.

But what should you do if a car you’ve leased is written off? And does damage mid-lease affect your monthly payments? Read on to find out everything you need to know regarding lease car damage.

What happens if I damage my lease car?

Regardless of whether you’ve damaged your new car in an accident with another vehicle or by hitting something stationary, you should notify your provider straight away, as well as your insurer.

If there isn’t information already in your contract about what garages are approved, then they should give you this information when you call.

Don’t attempt to repair any damage to the car yourself, no matter how skilled you are when it comes to vehicle mechanics. A provider will not consider you an approved repairer and will either order any work to be redone or charge a penalty fee.

Once you’ve made the provider aware of the extent of the damage and have a list of approved garages, it’s then your responsibility to arrange a day to take it in to be repaired and pay the quoted price.

Who needs to pay for lease car damage?

Unless you’re involved in an accident whereby another driver was at fault and caused the damage to your vehicle, you will have to pay for any repair work or the excess on your insurance policy if your insurer covers it. Be sure to get the following details of the other driver in a crash:

  • Full name
  • Contact details
  • Insurance details (policy number, etc.)
  • Registration number
  • Make and model of the car
  • Details of the accident (time of day, where it happened, how many cars were involved and how many passengers were in each car, what happened, and extent of damage caused, with pictures if possible)

Without this, there’s no way that they will be able to pay for any repairs needed post-accident, provided they’re the ones at fault.

Contacting your insurance company

If you’re involved in an accident in a car you’ve leased, you’ll need to tell your insurance company. Even though you may not be making a claim, not making them aware of any accident can mean that your cover is invalidated.

Although you can make a claim and receive an excess if the damage to the car is expensive, the cost of your premium will go up. In some cases, this can be more costly over time than the repair work itself, so be sure to try and pay for any repairs yourself, especially if they are only minor issues like a small body dent.

Be sure to cancel your insurance policy for a lease car if it is written off, unless you get a courtesy car temporarily, in which case your insurer may let you transfer the policy over to it. If you pay monthly and don’t have a replacement vehicle, cancelling your cover will save you losing more money.

GAP insurance

A GAP (Guaranteed Asset Protection) insurance policy can be a useful additional policy alongside your regular cover if your lease car is written off.

In this instance, your leasing provider and insurance company will come together to discuss what will be paid out for the vehicle. Sometimes this ‘settlement figure’ can fall short of the outstanding finance still owed on the car, especially if this happens early in the contract.

GAP insurance is designed to cover the difference between money owed to the finance provider and what’s already been paid out by your insurer, should the worst-case scenario happen.

Remember: GAP insurance is optional and can be taken out at any point during your lease agreement as extra protection.

Your main insurance provider might offer a GAP policy, otherwise you can compare quotes from third-party brokers in order to get the best price. Prices tend to range from £100-£300, but this will depend on how long you need cover for and what type of vehicle it is.

Need more information on GAP insurance before comitting to a policy? Check out our handy guide for everything you need to know.

What should I do if my lease car is written off?

Not only will you be without a car if your lease vehicle is written off, but you’ll have to pay any outstanding finance that may be owed before the end of your agreed term. Unless you have a GAP insurance policy, which will settle this figure for you.

Before finance is settled, you’ll need to contact the finance provider and insurance company straight away if the vehicle is declared as a ‘total loss’. It’s likely that the provider of your lease deal will want written confirmation that says the car is a write-off, which you will need to send to them at the earliest opportunity.

Your current lease agreement on the car will automatically end, meaning you will have to take out a new deal once all the money owed has been paid.

If your business lease car is written off, the unsettled finance will be the responsibility of whoever’s name the lease agreement is under. However, common sense dictates that it entirely depends on the process of the company you work for. Be sure to check with your employer who this responsibility falls under.

Returning a lease car damaged

At the end of each leasing agreement your car will be inspected by a professional vehicle inspector, who will check for any excess damage and record the total mileage you’ve driven.

Some wear and tear is expected given that you would have spent 2-4 years using the vehicle. However, damage which goes beyond this will be noted down, with a price for any repair work needed added on there too.

As we mentioned earlier, it will then be your responsibility to pay for the repair work. There may also be an additional charge from the finance provider as a result of the inconvenience caused. For this reason, we recommend checking your vehicle over for damage 10-12 weeks before you’re due to hand the keys back, and have it repaired in advance too.

Need more information before giving your lease car back? Find out what you need to do when returning a lease car.

Disputing damage charges

It’s possible to dispute a decision by the leasing provider to charge you for damage which you don’t believe goes beyond fair wear and tear.

To do this, you’ll need to follow this procedure:

  • Contact the finance provider and explain what charge(s) you feel were unjust and the price. Remember to refer to your copy of the inspection sheet and the BVRLA’s guidelines.
  • If the finance provider maintains that they will still charge you, you have the right to pay for an examination of all the evidence by an independent, qualified engineer. If they find in your favour, the provider will be obliged to refund the cost of the examination and you won’t be charged for the damage.
  • If a dispute can’t be resolved, you can turn to the BVRLA’s Trading Standards Institute-approved alternative dispute resolution (ADR) service. Their team will perform a thorough check of the evidence to determine whether there’s been a breach of conduct.

You must contact the BVRLA within 90 days if you plan to use the ADR service in order to raise a complaint about damage charge(s).

Need more information? Check out what the full procedure is for referring a dispute to the BVRLA.