What Happens If My Leased Car Is Stolen?

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Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

, Content Manager - January 12, 2021

Having a car stolen isn’t very fun. If it does happen to you and you’re currently leasing, your insurance coverage should step in to save the day if you never get the car back.

Stolen Leases and Auto Insurance

If your leased vehicle is stolen, contact the police right away and file a police report. Once that is taken care of, contact your insurance company and inform them of the theft.

Since you signed a leasing contract, you’re obligated to the car and must pay for the remaining lease balance – even if the car is stolen. Since you’re leasing, though, you’re required to carry full coverage auto insurance. Full coverage auto insurance typically covers the value of the leased vehicle if it’s never recovered (the cutoff for recovery typically being around 30 days).

If the car is never recovered, the insurance can cover your entire lease balance, your lease is finished because everything is paid. You’re then free to look for another lease or auto loan.

However, if your insurance doesn’t cover your lease balance, then you’re left to pay the difference. With stolen vehicles, comprehensive insurance only pays out what your vehicle’s value is at the time of the theft. If you owe more than its value, you must pay that balance.

The good news is that when you lease, you’re not paying for the car’s entire value – you’re only paying for the time you have it. Most leases are between two and three years, or 24 to 36 months long. Odds are, your full coverage auto insurance should be enough to cover your lease balance if the car is never recovered – unless your vehicle’s value depreciated quickly.

What if Full Coverage Insurance Doesn’t Cover the Value?

There are cases where your full coverage doesn’t cover the total amount you owe to the leasing company. In these cases, GAP insurance can help. GAP insurance pays for the difference between the value of the vehicle and what you owe on its lease.

For example, if the leased car is valued at $15,000 and you owe $16,000, the comprehensive insurance pays for the value of the vehicle, and GAP insurance pays out the $1,000 difference. With GAP coverage, you don’t have to pay anything out of pocket if the car is stolen or totaled and your full coverage doesn’t cover your lease/loan balance. Without GAP insurance, that balance would fall on you.

GAP insurance is typically inexpensive, typically around $20 to $40 annually. Many lease contracts come with GAP insurance included, so leaf through your lease paperwork to see what coverage you may already have. Most auto insurance companies offer this coverage on top of full coverage as well. Dealerships offer this optional coverage at the time of signing, too, and the cost is usually added to your monthly payment. The bottom line is that GAP insurance is helpful for borrowers who buy or lease vehicles that lose value quickly, and it’s relatively inexpensive.

Buy or Lease Again?

If your leased vehicle was stolen and you need another car, you’re left with a decision: buy or lease again?

Leasing isn’t for everyone – and not everyone can get approved for a lease. Most leasing companies have higher credit score requirements. If you have poor credit, you’re more likely to qualify for an auto loan than a lease. Or if you’re tired of leasing vehicles and dealing with mileage restrictions and leasing fees, buying could be for you.

Finding a lender that can assist with unique credit situations can be tough and time-consuming. But here at CarsDirect, we want to help you find lending resources for poor credit borrowers.

We’ve created a nationwide network of dealers that are signed up with bad credit auto lenders, called special finance dealerships. To get matched to a dealer in your local area that has bad credit resources, fill out our no-obligation, free auto loan request form.

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, Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

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