While approximately 80 percent of people purchasing cars either buy there car outright or finance their car, you are deciding to become one of the other 20 percent who are willing to forgo owning and lease their next vehicle. Perhaps you own your own business and are able to deduct your lease payment as a business expense on your taxes. Or maybe youre 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 buy the car when your getting free insurance quotes. When you lease, your auto belongs to the leasing company. They want to be certain their investment is protected in case the vehicle is totaled in an accident, or if the vehicle is stolen. They will also require you to have adequate liability coverage in case the accident is your fault. This serves 2 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 have full 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 stipulate your deductible amount.
Gap Insurance may also be included in your lease contract. It protects you if you wreck your automobile, this insurance will pay the difference between the amount you owe on your lease and how much the insurance company agrees to pay you for your car based on its current value.
When your in a severe accident and your car is severely damaged, the your insurance company has the option of totaling the vehicle and can either pay the leasing company or your the actual cash value of the vehicle, or repairing it. If you dont have gap insurance and your car is totaled, even after the leasing company receives their payment from your insurance company, you may still owe money on your lease contract.
If your lease agreement doesnt include gap insurance, you might want to consider buying it yourself. Otherwise, you may find yourself still paying for a car you can no longer get around in, in addition to purchase a replacement vehicle.
If the insurance company decides to make repairs to your car, speak with the leasing to verify the repairs won’t cause problems for you at the end of your lease. Most lease contracts have a clause stating 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 repaired by your insurance company.
To avoid any additional payments resulting from the repair of your car, be certain that all of the paint matches, the tires match, and that repairs were made with original equipment manufacturer (OEM) parts. If the vehicle is not returned to the leasing company in its pre-determined condition, you may have to pay for the cost of additional repairs.
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