Insurance and Car Leasing

Do you need vehicle insurance if you’re leasing a car instead of buying one? If you’ve never leased a vehicle before, this might be one of the first questions you have and the answer is yes. Even if you lease your next vehicle, you still need to have car insurance. This is the only way the leasing company has to protect their investment but it also protects you. In the event of an accident, the car insurance will pay for the damage just like it would if you were buying the car. The pay-off will go to the leasing company but you don’t have to worry about out-of-pocket expenses.

You will need to have liability, collision and comprehensive coverage on the vehicle that you lease. This may seem like a lot of coverage but it is necessary in order to be fully protected. Consider the alternative. Suppose you get into an accident, that is your fault, and the vehicle is a write off. Without proper insurance coverage, you will be responsible for paying for that vehicle. This would be much more expensive than carrying the proper insurance coverage.

When leasing a vehicle, you may also be responsible for getting Gap insurance. This is insurance that covers the difference between the amount of money that you owe the leasing company and the amount that will be paid in the event the vehicle is written off. This is necessary due to the depreciating of all vehicles, which can occur very quickly in some cases.

Normally, the cost for this insurance will be included in your monthly payments. This is because you’re not actually buying a Gap insurance policy. Instead, the leasing company usually has all of their vehicles covered with this type of insurance. You will only pay a “gap waiver”, which is added to your payments that will protect you in the event something happens to the car you’re leasing. Proper insurance is needed so you can relax and enjoy all the advantages associated with leasing a vehicle.