In 2023, around 21% of vehicles in the United States were leased rather than purchased. That number may seem small, but with over 230 million drivers in the country, that adds up to a large number of vehicles being leased.

Why do people choose to lease, and what happens if a leased vehicle is involved in a car accident in New York?

Why Do Some People Lease Vehicles Instead of Buying?

Many people find leasing preferable over buying, especially in urban areas where the mileage limits on many leased vehicles have less of an impact. Some advantages of leasing a vehicle include:

  • The car has fewer mechanical issues because it is new.

  • Drivers can afford a better vehicle than if they tried to buy.

  • Newer vehicles have better safety and technology features.

  • There’s no need to worry about trade-in value or reselling.

Understanding Lease Car Dynamics

Leasing presents a structure similar to renting. Lease agreements are for longer terms than rental agreements, with most leases lasting three years. Once the term ends, the lessee has the option to buy the car or return it to the company. The most common option is to return the vehicle and begin another lease agreement with a new vehicle.

One of the terms of lease agreements is often the requirement to return the leased vehicle in good condition. Damages will likely lead to additional costs charged by the leasing company.

If you are in an accident while driving your leased vehicle, what happens to the totaled car? Are the damages your responsibility?

New York Auto Insurance Requirements for Leased Vehicles

Leased vehicles are subject to the same New York insurance requirements as other vehicles. Lessees must pay insurance premiums for policies that meet at least the minimum insurance requirements in the state. Motorists must obtain the following insurance before they can register the car and get license plates:

  • No-fault insurance, also known as Personal Injury Protection

  • Liability insurance

  • Uninsured motorist coverage

No-Fault Insurance

New York is a no-fault state, which means each driver’s insurance policy covers their accident expenses regardless of who caused the accident. Personal Injury Protection (PIP) or no-fault insurance is used to pay for medical expenses and other reasonable costs associated with a car accident, but not property damage.

Liability Insurance

Drivers are still required to carry liability insurance even though New York is a no-fault state. Liability insurance covers the expenses other people incur as a result of an accident involving your car.

Uninsured Motorist Coverage

Despite the laws requiring insurance, not all motorists have coverage. Uninsured motorist insurance is required to protect yourself against drivers with no insurance.

Insurance Required by the Leasing Company

Even though no additional types of insurance are legally required in New York, the company that is leasing a vehicle is likely to require lessees to carry collision or comprehensive coverage. This type of insurance covers property damage to the leased vehicle caused by an accident, theft, or weather event.

It’s important for people leasing a vehicle to understand how their coverage protects them and the vehicle. If there is a gap between what the insurance covers and the vehicle’s value, then sufficient coverage may be missing.

Lease Payment Responsibilities

If your leased car is totaled, you will still be required to cover the remaining lease costs of the vehicle. Collision coverage may cover this expense if you are at fault for the accident. This is not a guarantee, so reviewing your policy carefully is important to ensure you have enough coverage for this scenario.

What happens if another driver caused the accident that totaled your leased vehicle? You may be able to file a lawsuit for damages, but it’s recommended that you speak with a personal injury attorney before making any final decisions. New York law presents numerous challenges that are not easily navigated without extensive knowledge and understanding of the legal process.

Steps After an Accident in a Leased Car

Even if you already reviewed your lease agreement extensively when you originally leased your vehicle, looking over it again is an important first step after an accident. This will help refresh your memory about the procedures after an accident, what the company expects from you, and what their responsibilities are. It is also a good idea to review your insurance policies to determine whether you have enough coverage.

New York requires motorists to report accidents that cause death, injury, or more than $1,000 in property damage. Drivers have ten days to file a report about the accident. It can be difficult to determine the value of property damage on the scene. It’s recommended that you report any accident to ensure you adhere to state law. In addition, reporting the accident creates valuable documentation for any future accident claims.

Another important first step after an accident is to receive medical attention. This is, in fact, the most vital step for any driver and passenger involved in an accident. You may not experience symptoms of your injuries right away, so seek medical treatment even if you think you are unharmed.

The leasing company and your insurance provider must also be provided with notice of the accident. The leasing company is the owner of the vehicle, which also means it will make the decisions regarding vehicle repair. If your car is not totaled and the company decides to have it repaired, review the work carefully to ensure you will not be charged for any damages at the end of your lease term.

Contact a Personal Injury Attorney in New York

It is understandable if you feel overwhelmed with all the elements of a car accident involving a leased vehicle. Contact a car accident lawyer with your questions when you need some guidance about your options and rights. An attorney can help you review your lease terms and insurance policies and determine how they apply to your accident case.

Let Mark E. Seitelman Law Offices be your resource for legal counsel and representation as you navigate the complex process of leased vehicle accidents. We offer free consultations, so contact us today to schedule yours.