Gepeco.Com: Auto Insurance for Leased Cars

Many people prefer to lease rather than purchase their vehicles. Leasing is a good way to reduce costs and get a new vehicle every few years. In fact, leasing costs can be less than half the monthly payments for purchasing the car. Typical contracts to lease can be from one to three years. Not everyone is eligible to lease vehicles particularly those who tend to put a lot of miles on their vehicles each year. Auto insurance can be another deciding factor when considering leasing.

Current or New Insurance?

If you currently have a policy, you first need to make sure if leasing is covered with your policy. It is natural to believe that since the lease term is shorter than a car loan term would be, insurance rates will be lower. The reality is that you will probably experience higher premiums when leasing. The reason for this is because the leasing company wants to make sure the vehicle is in good condition after your lease is up so they can continue to lease it and earn enough money to make a profit beyond the vehicle's sticker price.

As for drivers without car insurance so far but planning to lease a vehicle can obtain insurance in two ways. You can shop around and compare quotes from with your policy online. Or you may be able to get insurance through the leasing company, but their insurance costs are likely be higher than policies from ordinary providers.

Lease Agreement

When getting coverage, your insurance provider will want to know the terms and conditions of your lease agreement to make sure you are sufficiently protected. You will need to provide other information as well including anticipated annual mileage, where you plan to drive and park the vehicle, and any secondary drivers.

Coverage Amount

The leasing company probably has specific requirements that must be met similar to those associated with a car loan. Collision and comprehensive insurance is needed. You will be required to pay for insurance that covers the entire value of the vehicle, not just the period of time you plan to lease it. Most leasing agreements outline exactly how much auto insurance coverage is needed.

Since the leasing company holds the title to the vehicle, they assume a portion of the risk which they mitigate by requiring you to have insurance coverage above and beyond what may seem logical. Typical amounts including $100,000 per person in liability auto insurance. Plan to have at least $300,000 per accident for any new vehicle you expect to lease. If you are involved in an accident that results in injuries to anyone, you are not financially responsible for medical expenses as long as they do not exceed that amount. Property damage coverage is always smaller and is usually not higher than $50,000. The more you know about for leased vehicles, the better prepared you are to select the best coverage at the lowest prices available.

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