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Finding Out Whether Leased Or Financed Vehicles Get Lower Auto Insurance Quotes

Thursday, May 20th, 2010

Many consumers are looking for low cost auto insurance. Since auto insurance is a basic requirement of owning or leasing a car, and is required in every state in order to maintain legal driving status, auto insurance is something no driver can do without. But how can consumers find the best coverage, especially coverage they can afford? It is important for consumers to educate themselves and to know what kind of coverage they need in their state. Consumers should also be aware of what kind of variables go into calculating auto insurance quotes. The more educated and aware a consumer is, the more likely they are to receive low cost auto insurance quotes.

Changes to car ownership and the kinds of car ownership available to people in the last decade have produced many questions, especially for drivers who are leasing their vehicles or financing them over the long term. Due to the economic climate and value of vehicles, many consumers are choosing either to lease vehicles or finance them over a longer period of time. Either way, certain questions arise concerning the value of the car versus the time remaining on the lease or the financing agreement. Those questions may affect consumers’ auto insurance quotes.

Consumers who lease vehicles are essentially paying for the vehicle for the length of time that they use it. In other words, instead of buying the “entire” car, a person who leases a car is only buying the car for the amount of time indicated in the lease. At the end of the lease, the buyer is often given the option of returning the car to the dealer or purchasing the car outright. Consumers who purchase vehicles often do so these days with longer term financing; this means that the loan on the car is spread out for a longer period of time.

All drivers and vehicles are obligated to carry auto insurance. Coverage requirements vary from state to state. But even for leased vehicles or long term financed vehicles, coverage is required. But, because many of those vehicles end up “upside down” in terms of equity (the car is worth less than the amount left on the lease or finance agreement), more and more insurance companies are offering GAP coverage. GAP coverage protects drivers against having to owe large amounts of money in case the vehicle is destroyed or damaged in an accident.

It is important to find out from an insurance carrier if a leased or financed car can lower your auto insurance quotes. Also be sure to ask about GAP coverage and if it could save you money.

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.

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