Protecting your leased vehicle is a requirement – ensure you get the right insurance.
Who doesn’t love driving a brand-new car? Leasing a vehicle is a good option if you want to save money without buying a run-down car. With interest rates so low, leasing a vehicle has become more economical than buying an expensive car outright. Even so, before you take your new vehicle for a spin on the open roads, you’ll need the right auto insurance.
Here’s what you need to know about car insurance and your leased vehicle.
Coverage is mandatory
Before you drive off the lot with your new car, make sure you’re covered. Your leasing company or bank will likely insist that you get collision and comprehensive coverage to protect their investment. Collision coverage pays for damage to your vehicle if you hit someone’s car, another vehicle hits you, or your vehicle rolls over, regardless of who is at fault. Comprehensive coverage helps pay for damage to your vehicle from events other than a car accident, like theft, vandalism, and certain natural disasters. Additionally, most states require a minimum level of liability insurance. Find out more by talking to your insurance agent.
Your limits may be higher
Leasing companies often require you to purchase high liability insurance limits when you lease a vehicle. Some also request you to opt for a lower deductible or ask that you put money on reserve for the duration of the lease if your deductible is higher.
Gap insurance protects you
Gap insurance provides extra protection in addition to your basic car insurance for leased vehicles. If your leased car is stolen or totaled in an accident, gap insurance steps in to cover the money left to pay due on your lease as well as what your insurance company would pay for a regular comprehensive or collision claim. When leasing a car, gap insurance is well worth it.