When I lease a car, who pays for insurance?

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Things to Remember...

  • Leases on vehicles may or may not come with car insurance
  • The most common type of car insurance included on a lease is GAP
  • You are always responsible for purchasing full coverage car insurance
  • An insurance comparison tool can help you find affordable insurance for your leased vehicle

When you lease a vehicle from a dealership, you are responsible for maintaining a certain amount of auto insurance coverage on the vehicle. This is because the vehicle is still owned by the dealership.

In simple terms, the individual leasing the vehicle is under contract to rent the vehicle from the dealership.

If you are leasing a vehicle and get into a car crash or the car becomes damaged, the dealership wants you to carry enough insurance to fix the car to its pre-crash state.

For most leases, this means carrying full coverage. Start comparing auto insurance rates now by using our FREE quote tool above!

Car Insurance and Leased Vehicles

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If you are leasing a vehicle, it is important to read your lease agreement. Some dealerships may write GAP insurance into your lease and add it to your monthly payment. Other dealerships may not.

If you are leasing a vehicle where the dealership does not have GAP insurance written into the leasing contract, you will need to purchase it on your own, along with your regular car insurance policy.

GAP Insurance

GAP insurance covers the gap between what you still owe on your lease and the current market value of your car at the time of the collision.

For example, if you get into an accident and your leased vehicle is considered a total loss, your insurance company will determine what your car was worth just prior to the accident.

If the insurance company determine your car was worth $10,000 at the time of the accident, and you still owed $13,000 on your lease, you’d be responsible for paying $3,000 to the car dealer plus your deductible if you do not have GAP insurance.

If you do have GAP insurance, your GAP coverage pays any remaining money between your car’s worth and your lease payoff amount.

  • GAP insurance covers the GAP between what your car is worth and the remainder of your lease amount
  • Without GAP insurance, you could be financially liable for thousands of dollars
  • To find the right GAP insurance, use a comparison tool

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Full Coverage Car Insurance

Full coverage car insurance is almost always required on leased vehicles. Full coverage car insurance refers to a policy that includes, liability, comprehensive and collision.

Liability insurance covers the other driver’s medical expenses and car repairs if you are found to be the at-fault driver.

Collision insurance covers your medical expenses and car repairs in the event you are in an accident, and the accident is deemed to be your fault.

If the accident is deemed to be the other driver’s fault, their liability insurance covers your accident-related expenses.

Comprehensive car insurance pays for damage to your car that was not caused by a car accident. Typical items covered by comprehensive insurance include certain types of weather damage, objects falling on your car and theft.

  • Liability insurance covers the driver that did not cause the accident
  • Collision insurance covers you if you caused the accident
  • Comprehensive insurance pays for damage that is not related to a car accident

Additional Insurance Coverage Options

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In addition to full coverage insurance and GAP insurance, you may want to consider additional coverage options to make sure you have enough insurance coverage on your leased vehicle.

  • Roadside assistance
  • Rental car reimbursement
  • Under and Uninsured
  • Personal injury protection

Finding Affordable Car Insurance for Your Leased Vehicle

When you lease a vehicle, you will need to find affordable auto insurance coverage. In most cases, this will mean finding a full coverage policy and a GAP insurance policy. Both of these insurance policies can be found by using a comparison tool.

These online tools are designed to sort through various insurance carriers, looking for the coverage that best matches your listed needs. When the tool finished, you will be given a list of various policies.

It is your job to read through each policy and look at the premium amounts to determine which one best meets your needs.

Once you find a policy that meets your needs and your budget, you can usually purchase that policy online and print your temporary insurance cards. The insurance company should send you your permanent cards after a few days.

When you lease a vehicle, it is up to you to read the lease agreement to determine if any insurance is listed on the lease.

Usually, the car insurance for your vehicle is your responsibility, which means you will need to purchase a full coverage policy and a GAP insurance policy in order to fully protect yourself against financial loss if you get into an accident.

The easiest way to find car insurance for your newly leased vehicle is to use a comparison tool. Start comparing auto insurance rates now by entering your zip code in our FREE quote tool below!

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