Leasing

Who Is Responsible for Repairs on a Leased Car?

Learn whether you or your leasing company is responsible for specific repairs to your leased vehicle. Get pro tips to handle accidents, maintenance, warranties, and more.

Read time

8 minutes

Date

08.10.2023

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If you're leasing your car, you know this: Repairs aren't one-size-fits-all. Who foots the bill depends on what needs fixing. Keep reading to find out whether it's you or the leasing company on the hook for common leased car repairs. When it comes to repairs on a leased car, responsibility is split between the leasing company and the lessee. Generally, the leasing company covers major repairs while the lessee handles routine maintenance. 


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What is a car lease?

A lease is basically an extended rental. You pay a monthly fee to drive a car - usually for two to four years - but you don't actually buy it. The dealership still owns the car, unless you decide on buying it in the end. 


This lets you tool around in a new car for less than if you financed a purchase. But there's a catch - leases limit how many miles you can rack up. Go over and you'll pay extra when you return the car.


Leasing differs from buying because you don't build any equity. You're just renting it until you return it. But you also dodge long-term ownership risks and costs. If you always want a new ride and don't put on too many miles, a lease could be a good and more affordable option. You get the upside of driving a new car without the downside of being stuck with it forever.

Who is responsible for repairs on a leased car?

When it comes to repairs on a leased car, responsibility is divided between the leasing company and the lessee. Since the leasing company still owns the car, they're on the hook for any major repairs covered under the manufacturer's warranty, like fixing defects or malfunctions.


When leasing a car, you're responsible for regular maintenance and minor repairs related to normal wear and tear, oil changes, new tires, brake repairs, etc. The lease contract will tell you in detail what repairs and maintenance are your responsibility.


For more significant repairs not covered under warranty, responsibility again falls to the leasing company as owner of the vehicle. In that case, the lessee may need to pay some costs out-of-pocket or higher lease payments if the repairs are due to driver negligence or improper use.


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What to do if you damage a leased car

If you damaged your leased car, then don’t worry – follow these six steps to handle it:

1. Assess the damage

Carefully inspect the damage and try to determine how it likely occurred. Was it from an accident, weather event, vandalism, etc? Identify the exact parts of the vehicle that are damaged. Take thorough notes and pictures if possible.

2. Alert your leasing company

Contact your leasing company right away to report the damage. Provide all the details you documented and ask if they require the vehicle to be taken to a specific repair shop approved by the leaser. There may be time requirements for reporting damage as well.

3. Determine responsibility 

Review your lease agreement as it should detail who is responsible for repairs under different types of damage circumstances. There may be deductions to your security deposit or options to purchase additional coverage for certain repairs. Discuss responsibility with your leasing agent.

4. Obtain repair estimates

Get repair estimates from approved body shops, even if you are not paying. The estimates will determine the extent of damage. Provide copies of the estimates to your leasing company. Be sure to get several estimates if you are covering the costs.

5. Authorize and pay for repairs

If you are responsible for the repairs based on your lease, you will need to authorize the body shop to complete the work and pay the repair costs. Your leasing company may also have to authorize repairs.

6. Submit paperwork 

Provide copies of authorized repair invoices to your leasing company for documentation. Follow their instructions for reimbursement if any part of the repairs are their responsibility.

What happens if your leased car breaks down?

If your leased car breaks down, the first step is to contact any roadside assistance program provided through your lease, who can help with issues like flat tires or dead batteries on-site. 


For mechanical breakdowns, you'll want to bring the vehicle to the dealer you leased from for repair, especially if it is still under the manufacturer's warranty. Review your warranty coverage in your lease paperwork, as it may cover all or part of the repair costs. For issues not covered, you may need to pay diagnostic and repair costs out-of-pocket, though some leases cap your maximum responsibility. If it is an older leased car with high miles and the repair costs seem excessive, you may be able to negotiate an early lease termination without penalty. 


Additionally, if improper servicing or a defect caused the breakdown, you can typically seek full or partial reimbursement from the leasing company. Ask the dealer about a loaner car or rental rates if you need a temporary replacement vehicle while yours is in the shop. So in summary, use your roadside assistance, bring it to the dealer, understand what is covered under warranty, and negotiate termination or reimbursement if circumstances warrant it. This will allow you to get your leased vehicle repaired and back on the road quickly and cost-effectively.

Do leased cars have to be serviced at the dealership?

Good news - you can usually take it somewhere besides the dealership, if your leased car needs a repair or tune-up.  


Check your lease contract first. If it doesn't say repairs have to be done at the dealer, you can pick any certified shop. Just save receipts and keep good records. Big stuff like warranty work does need the dealership's touch. And some leases make you go to the dealer to keep coverage. Read the fine print. But for oil changes, brakes, tires and other basics, you've got options. Dealers might offer coupons to lure you in, but you can say no thanks and support your hometown mechanic instead.


Leased or not, do what's best for your wallet and schedule. Just make sure wherever you go meets the terms in your lease and keeps your car covered. With a leased ride, the choice of repair shop is yours - unless your lease says different.

Is maintenance required on a leased vehicle?

Yes, maintenance is required on leased vehicles. Here are some key points about maintenance on a leased car:


  • The lease agreement will specify what type of maintenance must be performed and at what intervals. This usually includes oil changes, tire rotations, fluid checks, etc. 
  • Sticking to the maintenance schedule is required to keep the lease valid. If you're missing some inspections,  that can result in fees or early termination.
  • All maintenance records should be saved as proof that services were completed on time. The dealership may want to see your maintenance history.
  • Any wear and tear beyond what's considered normal for the car's age and mileage could result in excess wear fees when returning the car. Proper maintenance minimizes abnormal wear.
  • Routine maintenance on a leased car is usually the lessee's responsibility. Major repairs covered under warranty are the lessor's responsibility.
  • Maintenance must be done according to the manufacturer's recommendations using approved replacement parts.


So in short, the lessee is obligated to properly maintain the car throughout the lease term as spelled out in the agreement. 

What happens if you total your leased car?

If you totaled your leased car in an accident, first things first - file a police report at the scene and contact your insurance right away to start a claim. They'll determine if it's repairable or a total loss. You also need to promptly notify the leasing company and provide details, police reports, and your claim information. 


From there, your insurance and the leasing company's insurance will work together to settle the loss, though you may need to pay your policy deductible. Any gap insurance you purchased will be invaluable to cover the difference between the car's value and what you still owe the leasing company on the lease. Once settled, the leasing company will terminate the lease and send instructions for returning the totaled car, releasing you from liability, and handling your security deposit disposition. While that lease is done, you'll need to obtain a replacement vehicle by either leasing another car or finding an alternate option that works for you. 


If the accident wasn't your fault, you may be able to negotiate termination fees for switching companies. The key steps are contacting the authorities, your insurer, and leasing company right away, settling the loss, returning the car, and finding new transportation with gap insurance helping to fill any financial gaps.

Final thoughts

When leasing a car, understanding repair and maintenance responsibilities is key. This guide breaks down who is liable for different repairs on a leased vehicle - the leasing company or the lessee. While lessors handle major issues covered under warranty, lessees must keep up with routine maintenance and minor wear-and-tear repairs. 


Leasing the way it should be - simple, honest and headache-free, so make the switch to FINN. FINN makes leasing easy-breezy with an all-in car subscription. Pay one monthly fee and never sweat insurance, repairs or surprise costs again. Pre-qualify for a FINN subscription in a few seconds without hurting your credit. Do it now and get $100 just for kicking those lease headaches to the curb.

Who Is Responsible for Repairs on a Leased Car
Who Is Responsible for Repairs on a Leased Car

Final thoughts

When leasing a car, understanding repair and maintenance responsibilities is key. This guide breaks down who is liable for different repairs on a leased vehicle - the leasing company or the lessee. While lessors handle major issues covered under warranty, lessees must keep up with routine maintenance and minor wear-and-tear repairs. 


Leasing the way it should be - simple, honest and headache-free, so make the switch to FINN. FINN makes leasing easy-breezy with an all-in car subscription. Pay one monthly fee and never sweat insurance, repairs or surprise costs again. Pre-qualify for a FINN subscription in a few seconds without hurting your credit. Do it now and get $100 just for kicking those lease headaches to the curb.

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