Auto Insurance For Leased Vehicles – What to Know


Image result for Auto Insurance For Leased VehiclesLeasing a vehicle is definitely different from owning a vehicle or financing one with the eventual ability to own it. Leasing is like a long-term rental. At the end of your lease you give the car back with no hassle, no questions asked. You are limited to the number of miles you drive it each year; however, otherwise you are able to treat it as your own.
Regardless of whether you lease or finance a vehicle, you must have auto insurance. Knowing what is entailed in insuring a leased vehicle is something to definitely take into consideration.
When leasing a vehicle, the state or even the insurance company minimums may require you to have higher coverage than owning a car. State minimum requirements for liability for owned or financed cars are usually between 25-50% of that of a leased vehicle. You may also be required to purchase collision and comprehensive insurance.
Lease agreements on vehicles may also require “gap” insurance. This insurance will cover the difference between what you owe on the lease and what the insurer will pay in case your leased vehicle is totaled in the event of an accident.
When looking into leasing a car, it’s important to speak with the auto dealer about insurance. Sometimes, you may be better off buying a car and paying less on insurance, than paying less on a lease payment and exponentially more on the insurance. You may also wish to speak with your auto insurance company to answer any questions or concerns you may have about the minimum insurance requirements on a leased car.


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