November 18, 2010

How To Find Affordable Auto Insurance For Leased Vehicles

Before beginning to seek auto insurance online or offline for leased vehicles, it is important to understand the primary differences between a leased vehicle and a vehicle that is purchased to own outright. With a vehicle that is purchased to own, the owner assumes full responsibility for the use, financing, and payments of the vehicle until such time as the owner may wish to sell the vehicle or trade it in for a new one, starting the cycle all over again. In the case of a leased vehicle, however, the set up is much more similar to that of a longer term vehicle rental. A leased vehicle is never the owner's permanently; rather it is leased to the owner from the auto company for a specific period of time. The mileage is usually restricted on an annual basis, with the opportunity to purchase the option to use additional miles for an extra fee. At the end of the lease period, the individual returns the vehicle to the leasing company. However, whether the vehicle being used is being driven under a lease agreement or as a result of financing or an outright purchase, the need for auto insurance remains the same.

When seeking affordable auto insurance for a lease vehicle, it is important to understand that premium costs may not be apples for apples with an automobile that is financed or owned. Often premiums cost are actually higher, and this is because technically the driver is not the owner of the car, but rather is leasing it from the owner but has responsibility for maintaining the insurance for the vehicle. There can often be as much as a 20 percent rate increase to insure a leased vehicle, and the vehicle operator should be aware of this. Additionally, it is important to thoroughly review the lease agreement to discover exactly what level of auto insurance coverage is required before beginning a search for auto insurance online or offline. Many auto insurance policies for leased vehicles must include gap coverage, in case the car is destroyed with a wide difference between what is still owed and what the lease company will reimburse for.

Finally, when seeking affordable auto insurance online for a lease vehicle, it can be helpful to use the many services that are now available to compare and contrast different policies on the same page and decide on the top potential carriers to contact for more information. Once the carriers of interest have been determined, following up with a phone call will provide clarity into what level of coverage is needed and pricing, and further comparison can be done to find the most affordable plan for the budget.