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Are Auto Insurance Rates the Same for a Leased vs. Purchased Vehicle?

Friday, April 30th, 2010

Leasing a new car can be a great opportunity – the deals for great cars with a low monthly payment are advertised everywhere. There are many things to consider before leasing a vehicle: one area often overlooked is the impact a leased vehicle will have on auto insurance rates. Insuring a leased vehicle is not so different from insuring an owned vehicle. Here are a few of the key differences:

Automobile Liability:

Since the leasing company is the owner of the car, it is possible that they will be named in a law suit that is brought against you for damage or injury to a third party. To cover this possibility, the leasing company will as to be added as an “Additional Insured” on your. This addition will not affect your auto insurance rates – it is similar to the loss payee part of an auto insurance policy.

You will be required to carry a minimum amount of liability insurance, typically $100,000 per person, $300,000 per accident for bodily injury liability and $50,000 for property damage liability. If you do not currently carry that much liability, you will be required to increase your limits. Depending on your age, driving record or geographic location, increasing liability limits can have a dramatic impact on your auto insurance rates.

Physical Damage: Comprehensive and Collision.

Leasing companies require that you carry full coverage for physical damage with a minimum deductible (usually $500). Auto insurance rates for Comprehensive and Collision coverage depends on the vehicle, among other things. If the car you are considering is more expensive than the car you have, you may be surprised about the increase in premium.

Lease Gap Insurance:

What is gap insurance? If a leased car is totaled in an accident, the insurance settlement may not be high enough to pay off the lease because of rapid deprecation in the first few years of car ownership. Gap insurance will pay the difference between what you owe and what you get from the insurance company.

Leases often require that you carry it. In fact, gap insurance premiums may be built into your lease payment amount. Be certain to read your contract carefully and know what is included in your payment.

Many insurance carriers offer gap insurance as an add-on to their auto policies. Many lenders will offer this valuable coverage for no additional fees for the first year or two of a loan. If the lease does not include gap insurance, shop around a bit for the best auto insurance rates; the cost of gap insurance varies widely.

If you are uncertain about the impact of the lease on your auto insurance rates, contact fill out your zip code at the top of this page for a hypothetical auto insurance quote.

Considering Whether Car Insurance Rates Will Continue To Rise in 2010

Thursday, April 15th, 2010

Auto insurance rates have increased in 2010 and they are expected to keep rising. The economy has a huge impact on insurance providers, and many people will have to face higher auto insurance premiums in the near future. According to USA Today, the average auto insurance policy will increase by 4 percent. Experts recommend that consumers shop around for affordable auto insurance rates. You can request an auto insurance quote online if you want to save money. Requesting an auto insurance quote is easy and it will only take you a few minutes.

In some states, auto insurance rates have increased by 12 percent, including Montana. In Florida, State Farm has increased their rates by 9.2 percent. Twenty-three states have seen a rise in auto insurance premiums this year. Other parts of the country have seen a drop in premiums. Drivers in Idaho and Vermont have the lowest auto insurance rates in the nation. The truth is that insurance fraud and the amount of claims that are being filed is causing many insurance carriers to raise auto insurance rates for profit. Besides the increase in auto insurance premiums, certain vehicle models will cost more to insure due to risk ratings such as the Kia Sportage and Hyundai Sonata. Insurance rates have been going up since 2008, and they will probably keep rising. Consequently, many motorists are driving without insurance and about 16 percent of drivers are likely to let their policies expire without renewing them.

It is important that you compare auto insurance rates with a variety of insurance companies. If you find an expensive policy, you will reduce your auto insurance premium. You can obtain an auto insurance quote online with more than one insurance comparison website. You will have to enter your zip code, select the type of coverage you need, and complete a simple application. You will receive instant quotes in minutes. You can reduce your auto insurance premium even further by raising your deductibles and taking advantage of discounts. For instance, insurance companies may offer you discounts if you complete a safety, defensive driving course, if you have air bags, anti-theft devices, anti-lock brakes, a car alarm and other safety features. If you are a student and your grades are excellent, you may qualify for a discount. In addition, if you do not put a lot of mileage on your vehicle each year, if you keep it in a garage, if you insure more than one vehicle or purchase more than one kind of policy with one insurance company, you may qualify for discounts on your premiums. If you follow these tips, you may find a low cost auto insurance policy.

Survey Shows that Nearly 80% of Consumers Displeased with Auto Insurance Rates

Wednesday, October 28th, 2009

A new survey released in mid-October by LowerMyBills.com shows that 79 percent of consumers feel that they are paying too much for their auto insurance. The same survey also reports that more than half of consumers have tried to reduce their auto insurance rates in the last year.

The study’s authors point to the economic recession as the main reason why consumers are becoming more proactive when it comes to reducing the amount of money they pay each month on car insurance. According to the study’s findings, 54 percent of consumers said that they have tried within the last year to reduce their auto insurance premiums. That leaves 46 percent of consumers who have not tried to do this. But of this group, 83 percent said that they do plan to try to reduce their auto insurance rates during the next six months.

The survey also revealed that a significant number of drivers lack the information they need to make changes in their auto insurance. A total of 45 percent of respondents said that they do not understand how to find the best coverage for their own situations. An additional 49 percent of respondents said that they were not familiar with the discounts offered by their insurance company, and did not know for which of these discounts they qualified. Seventeen percent of policyholders also admitted to never taking the time to study their coverage in an effort to obtain auto insurance that better fits their financial needs.

For those consumers who do want to reduce their auto insurance rates, there are plenty of ways to do so. The best is to avoid reckless driving habits and keep a clean driving record. Insurance companies offer discounts to drivers who don’t have speeding tickets or accidents because they are less likely to file claims in the future. Consumers can also save money by bundling multiple insurance policies with the same company. Insurers often provide discounts to customers who take out both their home and auto insurance through them.

To reduce their monthly premiums, drivers might also consider increasing their deductible. The deductible is the amount of money that drivers have to pay before their insurance company will cover the rest of the costs of an accident. Drivers with higher deductibles generally pay lower monthly premiums. It’s important, though, for consumers to avoid taking on a deductible that they would struggle to pay.

Regardless of the struggling economy and the rising cost of auto insurance, policyholders should continue to seek out the best auto insurance coverage they can for the best price. The rising popularity of auto insurance comparison websites makes it easy for anyone to do this with the click of a mouse.

Why Auto Insurance Rates are Dropping

Friday, August 21st, 2009

According to statistics gathered by Insurance.com’s RateWatch for Car Insurance, auto insurance rates are down across the United States. In some states, the drop is dramatic: average annual premium decreases of nearly 30% have been reported in Vermont, Maine, Wisconsin, and Iowa. Decreases of around 20% have occurred in South Dakota, New England, Illinois, and Tennessee.

Most states are seeing a more modest decrease in auto insurance premiums, between 1 and 5%. So, what accounts for the dramatic decrease in costs being seen nationwide?

With the recession causing hundreds of thousands of workers to lose their jobs in the past two years, many people are cutting expenses wherever they can, and auto insurance is one that can decrease a family’s expenses by hundreds of dollars a month. It is estimated that by 2010, 1 in 6 drivers will be driving without auto insurance.

Insurance companies are responding to this change in the market by decreasing rates in order to retain drivers. More people are shopping around online to find cheaper auto insurance quotes, and insurance companies are hoping that people realize the importance of car insurance and will continue to pay for insurance if they can get a good rate.

In some areas of the country, auto insurance rates have decreased recently as a result of new legislation in addition to economic factors. In California, insurance commissioner John Garamendi passed a statute which requires insurance companies to base premiums on drivers’ records and miles driven rather than on their zip code.

A spokesman for State Farm Insurance has cited yet another reason for the current decrease in rates: claims are down. “Whether it’s because of the aging population, better law enforcement, safer cars or some other reason,” said Bill Sirola, “our projections of what we were going to have to pay in losses are just not coming true.”

Regardless of the reasons for decreasing auto insurance premiums, the situation is good for consumers, and there are several compelling reasons not to drive without insurance. Most notably, uninsured drivers can end up hundreds of thousands of dollars in debt if they are found at fault in a serious accident resulting in destruction of vehicles and injury.

Even if accidents are avoided altogether, driving without insurance is illegal in all 50 states, and penalties for offenders are steep. A citation for driving without insurance will also result in dramatically increased insurance rates in the future.

Auto insurance rates are dropping due to a number of factors, and it is now easier than ever to shop for an auto insurance quote online. It is worth the trouble to find an affordable rate rather than canceling auto insurance altogether.

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