What Happens If My Leased Car Is Stolen? Every year, thousands of cars are stolen in the USA, and sadly, leased cars are not an exception. We know this can be a stressful experience, so we’re here to support you if it happens.
In this guide, we’ll explain what to do if your leased car is stolen, how it might affect your lease agreement, and how insurance and GAP insurance can help protect you from losing money.
What To Do If Your Leased Car Is Stolen? Step-By-Step Process
The very first step if your leased car is stolen is to report it to the police immediately. Contact your local law enforcement and file a report, giving them all the necessary details about the car, like its make, model, color, and license plate number.
1. File a Police Report Immediately
The moment you realize your leased car is missing, reach out to your local police department to report the theft. Share detailed information about the car, such as its make, model, color, license plate number, and Vehicle Identification Number (VIN). Filing a police report is crucial for insurance claims and starting any legal investigations.
2. Contacting Your Car Insurance Company
After reporting the theft to the police, contact your insurance company right away to inform them about the situation. As the lessee, you are still responsible for paying the remaining lease balance, even if the car is stolen.
Since you’re required to have full coverage auto insurance, which usually includes theft protection, your insurance company will guide you through the claims process. In most cases, if the car isn’t found within a set period (typically around 30 days), your insurance will pay the car’s value. This payment can cover the remaining lease balance, allowing you to consider another lease or car loan.
3. Filing a Claim and Investigation
When you file a claim, the insurance company will investigate the theft to confirm the details. They may ask for additional documents, such as:
- The police report
- Evidence of where the car was last parked
- Make sure to cooperate fully and provide all the required information to ensure the process goes smoothly.
Keep copies of all original documents, as having a clear record can help everyone stay accountable and simplify the claims process.
4. Understand the Lease Gap
Often, the car’s value at the time of theft, known as its actual cash value (ACV), is less than what you still owe on the lease. This difference is called the “lease gap.” To avoid paying this gap out of pocket, it’s important to have gap insurance.
Gap insurance covers the difference between the ACV paid by your insurance company and the remaining balance on your lease. Some lease agreements include gap insurance, but others may require you to buy it separately. Check your lease terms to see if you’re covered.
5. Finalize the Insurance Agreement
After the insurance company completes its assessment, it will issue a payment based on the ACV of the stolen vehicle. If you have gap insurance, it will cover any remaining balance owed to the leasing company. Without gap insurance, you may have to pay the lease balance out of pocket.
6. Evaluate Your Next Steps
Once the claim is settled, you will need to decide how to proceed. If you want to lease another vehicle, you can work with the leasing company to start a new lease agreement. Alternatively, you may choose to purchase a different car or explore other transportation options.
What if Full Coverage Insurance Doesn’t Cover the Value?
Sometimes, full coverage insurance doesn’t cover the entire amount you owe to the leasing company. This is where GAP insurance steps in. GAP insurance covers the difference between the car’s value and the remaining balance on your lease.
For example, if your leased car is worth $15,000 but you still owe $16,000, comprehensive insurance will pay $15,000, and GAP insurance will cover the $1,000 difference. With GAP insurance, you won’t need to pay anything out of pocket if your car is stolen or totaled and the insurance payout falls short of your lease or loan balance. Without it, you’d have to pay that difference yourself.
GAP insurance is affordable, costing around $20 to $40 per year. Many lease contracts include GAP insurance, so check your lease agreement to see if it’s already covered. If not, most auto insurers offer GAP insurance as an add-on to full coverage, and dealerships often provide it when you sign the lease, with the cost added to your monthly payments.
GAP insurance is especially useful for leased or purchased cars that lose value quickly, and it’s a small investment that can save you significant financial stress.
What Next – Buy or Lease Again?
If your leased vehicle was stolen and you need another one, you have a decision to make: buy or lease again? Leasing may not be an option for everyone, as most rental companies require a higher credit score. If you have a poor credit history or prefer to avoid mileage restrictions and lease fees, buying may be an option for you. On the other hand, if you like to drive a new car every few years and enjoy lower monthly payments, leasing may be the right choice. However, when you make the decision, make sure you know the process for filing a claim if your vehicle is stolen.
Know More: Leasing a Car VS Buying a Car
Take Away
Having your rental car stolen is a complicated situation, but knowing the steps to take and understanding your insurance and rental company’s processes can help you handle it more effectively. Always report the theft to the police, notify your insurance company, and inform your rental company immediately. Make sure you have comprehensive insurance and GAP insurance to protect yourself from potential financial loss.
