Love the idea of a new car, but hate the idea of paying for a new car? We don’t blame you. A car is a big investment, and many are opting to lease cars instead. Leasing is becoming so popular lately that 4.3 million cars were leased in 2016.
If you weigh the pros and cons of leasing a car and decide to go for it, you’ll want to be extra sure the insurance you have for your ride is up to par. Because you don’t technically own a leased car, you’ll need insurance coverage for leased car to make sure you don’t end up in a bad spot if you need to file a claim.
Do you need car insurance for leased cars?
You may be wondering if you still even need car insurance on a leased vehicle. The short answer is yes. You’ll need at least minimum insurance coverage for a leased car to meet state requirements. If you get into an accident, you’re still required to pay for damages to the leased cars and any other cars you damage or people you hurt. You would definitely want insurance to help cover those costs.
Car insurance for leased cars
Okay, let’s get down to the nitty gritty coverage details. Really, car insurance coverage for leased vehicles doesn’t differ all that much from coverage for a car you buy.
Most loans require you have Collision Coverage, and leasing a car is no different. This coverage will help protect your vehicle after an accident, no matter who’s at fault.
A lender will typically require a $500 deductible for your Collision Coverage. Let’s pretend that you get into an accident and there’s $2,000 worth of damage to your car insurance would hopefully help cover the remaining $1,500 of damage.
Just like how your loan probably requires Collision, it will also likely need Comprehensive Coverage. This coverage helps cover non-accident things like vandalism, theft, acts of God like hail, etc. With a leased car, you’re typically required to have a $500 deductible for Comprehensive Coverage. But again, this is similar to if you financed a non-leased vehicle too. So this is nothing out of the ordinary for your regular car-driving needs.
Most states require some amount of Liability Coverage, and you’d be no exception with a leased car. Liability is broken down into two parts: Bodily Injury and Property Damage. If you cause an accident, Bodily Injury helps to pay for the other person’s medical expenses, pain and suffering costs, and more. The Property Damage portion helps pay for the other person’s damaged property.
Different lenders will have varying requirements for your Liability Coverage. Sometimes they require higher limits because your vehicle is leased. You’ll want to check with them to see exactly what limits you need for a leased car.
It’s not a requirement, but Roadside Assistance Coverage is a good thing to have with a leased car. No one wants to be stranded with a flat tire, and Roadside can get you quick help with flats, and so much else. Some providers include Roadside Assistance Coverage in every policy (cough cough, like us!), so be sure to look into your options.
First steps with a leased car
Before you even drive off the lot with your leased car, make sure you’ve got the insurance coverage for a leased car that you want and need. And if you’re a planner and purchase your auto insurance in advance, you may even qualify for an auto insurance discount, depending on your provider. If you purchase seven days out with Say, you’ll qualify for our Advance Purchase Discount.
So pick out the perfect car to lease, plan ahead with your auto insurance, and you’ll be off on the road in no time.
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Posted April 19, 2019 in insurance know-how.