What happens if my lease car is declared a total loss, will Gap Insurance help?


When you lease a car, should you be worried about your vehicle being declared a total loss at some point during your contract term?

The answer is YES – the reason being is that when you take out a lease contract you’re agreeing to pay a monthly fee for a specific length of time for a brand new car.

If during this time, the car you have leased is stolen or damaged because of an accident and declared a total loss, you are legally responsible for paying the shortfall for the value of the lease car from when it was written off and what the amount still outstanding is on your lease agreement.

It’s best to remember that under the terms of your finance agreement this amount must legally be paid by yourself.

What happens if my lease car is declared a total loss, will Gap Insurance help?

Do You Need Gap Insurance When You Lease A Car? © Copyright Bill Kasman and licensed for reuse under this Creative Commons Licence.


Not having Gap Insurance could leave you having to fork out for the difference between what your motor insurance company will pay out and what your lease company confirm will be the difference between their settlement and what your insurance company have said they will pay out.

You could end up being left with no car, having to find another vehicle to drive and an invoice to pay for the shortfall, as well as having to cope with what led to all this in the first place.

If you take out Gap Insurance, you protect yourself from this situation as the shortfall is covered by your policy, no matter what the amount may be, so it’s well worth considering when you come to insuring your lease car.


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