For those that are leasing a vehicle, this may be a new experience for them. They will most likely have a lot of questions. Some of these questions will revolve around the insurance for the vehicle. Canada has rules in place for mandatory insurance. So it doesn’t matter whether it is a leased vehicle or not. Insurance coverage is not an option. At least not if the driver will be using public roads.
Some of the Common Questions that an individual’s asks are…
Do You Pay Insurance on a Leased Vehicle?
Vehicle leasing companies have mandatory requirements for insurance. It means having comprehensive and collision coverage as well. It is because the leasing company is the actual owner of this vehicle. If it is in an accident, they want to be sure that the vehicle is fully covered for the damages that it could have. Those that are leasing vehicles must provide proof of insurance to the Leasing Company.
How Much Does it Cost to Insure a Leased Car?
There is often some confusion as to whether it cost more to insure a leased car. Overall the rates for a leased vehicle and an owned vehicle are pretty much the same. The Insurance company will use the same criteria for either when determining the rates.
Is Insurance More on a Leased Car?
Some may say that they found that the Insurance they are paying on their leased car is more expensive. It may be when they compare it to what they paid for their owned vehicle. There could be several reasons for this.
Some leasing companies will insist on those leasing vehicles take out GAP Insurance. It is sometimes called Gap Protection. It gives some additional protection.
If you have an accident, the car may be a write-off. It means the insurance company will then pay what the book value of what the vehicle is worth. It may be that you owe the leasing Company more than that amount. The leasing company wants what it owed to them. GAP Insurance covers the difference between what was paid for the vehicle and the amount due on the lease.
Some leasing companies will include GAP insurance in the leasing contract. If they don’t, you are not required to have it. Although it is worth considering being as you are leasing the vehicle and don’t own it.
Having Gap Insurance through the leasing company doesn’t mean that you can’t have other vehicle insurance. The other vehicle insurance needs to be covered by your Insurance provider of choice.
Some leasing companies don’t include Gap insurance. Some insurance companies offer this as an add-on.
When it comes to cost most will say that they find it very reasonable. In many cases, it only means a few dollars difference over the period of the policy.
Is it Cheaper to Insure a Leased Car?
It helps to understand what Insurance Companies consider important. As it relates to the Insurance, they provide. It can be beneficial.
It helps in understanding why there isn’t much difference for vehicle ownership and leasing.
Insurance companies will look closely at the driving record of the driver. They will consider their age as well as driving experience. Plus, they will actively consider the type of vehicle that you are leasing. The kind of vehicle taken into account for a few reasons. The repairs on high-end vehicles are more expensive. The book value of the vehicle will also be higher in case it needs replacing.
What is the Best Coverage to Have for a Leased Vehicle?
Buying insurance can be confusing because there are so many variations of it. Many who are leasing vehicles want the best coverage possible. Knowing what type of insurance options are available for a leased vehicle is beneficial. It helps to make an informed choice.
Accident benefits look after the injury costs that can occur in an accident.
Third Party Liability:
If you happen to be at fault for the accident, this insurance covers the costs that you will incur because of it
Collision insurance tends to the costs for repair and replacement. It pertains to to the vehicle damage in an accident.
Damage to a vehicle is not always caused by accident. There can be other situations that can cause this. Vandalism, acts of nature and fire are a few examples. Comprehensive usually refers to damages caused when a vehicle is not in motion.
It is mandatory to have basic vehicle insurance coverage everywhere in Canada. However, there are some drivers that disobey this rule. On occasion, a car accident can occur with an uninsured driver. The mandatory insurance has some provisions for this. At times, this insurance coverage may not be enough. Those leasing a vehicle may want to consider additional coverage for this. Some Insurance companies will give this option.
As mentioned previously this may be insurance you want to consider.
Keeping the Costs of Your Leased Vehicle Insurance Down
Paying attention to maintaining a good driving record helps to keep insurance costs down. It applies to both leased and owned vehicles.
Consider the year, make and model of the vehicle that you want to lease. Insurance companies pay close attention to this when setting their premiums. For example, some vehicles are at higher risk for theft. It means these cars are more expensive to insure.
Take the time to shop around for your leased car insurance. It will help you learn about the different rates and potential discounts.
Shopping for the Best Insurance for a Leased Vehicle
The first requirement is carefully reading over the lease contract. It will help to determine if GAP insurance is part of the contract. If so, then the insurance shopper may want to exclude this when shopping for the rest of the insurance.
One of the easiest ways to shop for insurance is by getting quotes and comparing this. It should not just be about the cost of the premiums. Looking at what’s offered for the price paid for. It is the most effective way of making good insurance choices.
If the leasing company is offering full insurance a comparison of this is a good idea. Assumptions should not be that it is the best insurance.