People at times lease vehicles to experience a newer car without committing to a purchase. A car lease can be convenient in many ways, but it is different from car ownership. Nearly a quarter (24.33%) of all new cars in the US were leased in 2020, according to the Bureau of Transportation Statistics.
When you lease a vehicle, always ask if insurance is included in the process. You might be expected to get your own policy before finalizing your lease. Here is a quick guide on what you should know about insurance for your leased vehicle.
If someone gets sick in your car or rides in your automobile while ill, you should sanitize the surfaces to help kill the germs. In this case, it helps to understand the difference between cleaning, sanitizing and disinfecting:
Leasing companies determine what kind of coverage they require you to have in order to use their vehicles. This could mean having physical damage coverage, including collision and comprehensive coverage.
Typically, lessors require a combination of both kinds of insurance to cover all kinds of accidents. They have a vested interest to protect their property if an accident occurs. Some companies will even have a certain amount of property damage liability coverage needed to meet their minimum requirements.
There could also be a requirement for a specific minimum deductible, which will influence your insurance coverage rates. Lower deductibles can make it easier to take care of small accidents or damage, but it typically comes at a higher rate price per month.
While many lessors will require more than the state minimum, most states also have set minimums you must hold to legally drive the car. The legal requirements for auto insurance coverage vary from state to state. Typically, minimum insurance coverage requirements by the state are the same whether you own, lease or finance your car. Your insurance agent will help you consider the kind of car insurance required by your state, often including:
- Bodily Injury Liability covers medical expenses for the other involved parties if you are found at fault for the accident.
- Property Damage Liability covers the other party's property if you are found at fault for the accident.
In some states, you might even have to get insurance that covers you if the other motorist is not insured. It's important to know that you are meeting at least the state's requirements for coverage when you choose an insurance plan for your new lease.
To find the lowest rates, you need to shop around. Leased car policies don't cost more than the same coverage for an owned or financed car. However, the driver, situation and coverage amount will impact the cost of your policy options.
Start by contacting an agent to help you compare your options and find the coverage that fits your needs. Some states allow you to use a credit-based insurance score to help lower costs for those deemed less of a risk for an insurance loss.
