While approximately 80 percent of auto consumers either buy there automobile with cash or finance their automobile, you are deciding to become one of the other 20 percent who are willing to forgo owning and lease their next car. Perhaps you own your own business and are able to deduct your lease payment as a business expense when doing your taxes. Or maybe you’re trying to go up to a premium model for less upfront cash.
Whatever your reasoning, if you do decide it is become the time to lease, remember that the amount of insurance coverage you need will most likely be more than if you finance the automobile when your getting free insurance quotes. When you lease, your automobile belongs to the leasing company. They want to be certain their investment is insured in case the car is destroyed in an accident, or if the automobile is stolen. They will also require you to maintain high enough liability coverage in case the accident is your fault. This serves two purposes it covers you from a financial hardship, and can also covers the leasing company in case they are held partly responsible in a lawsuit. While every state has their own requirements, on average, the minimum liability insurance coverage for most states is about one fifth of what leasing companies will usually require from you.
If you are going to try to get discount auto insurance remember the leasing company will also require you to maintain comprehensive and collision coverage, which will protect you from damages resulting from the perils covered in your policy: vandalism, civil riot, theft, fire and collisions with animals. You will generally not have a choice of deductibles, your lease contract will usually indicate your deductible amount.
“Gap Insurance” may also be included in your lease contract. It insurers you if you destroy your vehicle, this insurance will pay the difference between the amount you owe on your lease and how much your insurer agrees to pay you for your vehicle based on its current value.
When your in a severe accident and your car is severely damaged, the insurer has the option of “totaling” the car and can either pay the leasing company or your the actual cash value of the automobile, or repairing it. If you do not have gap insurance and your vehicle is totaled, even after the leasing company receives their payment from your insurance company, you may still owe money on your lease contract.
You should consider purchasing gap insurance, even if your lease agreement doesn’t require you to purchase it. Otherwise, you may find yourself still paying for a car you can no longer drive in addition to get a replacement car.
If the insurance company decides to make repairs to your vehicle, talk with the leasing to verify the repairs won’t cause problems for you at the end of your lease. Most lease contracts state that you are responsible for any “excess wear and tear.” This means you are responsible for any damage to the car, even that which was previously fixed by your insurance company.
To avoid any additional costs resulting from the repair of your vehicle, be certain that all of the paint matches, the tires match, and that repairs were done with original equipment manufacturer (OEM) parts. If the vehicle is not returned to the leasing company in its pre-determined condition, you may be responsible for the cost of additional repairs.
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