Do you love that new car smell, but hate the price tag? If so, you probably prefer to lease your cars rather than buy them. After all, a leased vehicle offers low monthly payments with no permanent commitment. You can drive your car off the lot and then bring it back after a couple of years – no strings attached. As convenient as leasing can be, there are still some steps you have to take to protect the vehicle you drive. The dealership may own your car, but you are the one responsible for insuring it. Continue reading to learn about the best car insurance for drivers who lease.
Collision and Comprehensive Insurance
When it comes to leasing, purchasing full liability, collision and comprehensive coverage may not be an option. The State of Wisconsin requires drivers to purchase liability insurance, and your leasing company will require you to purchase collision, comprehensive and gap protection for leased vehicles to help prevent losses.
Take note that the company you’re leasing from has the final say on how much coverage you must purchase. You can purchase more coverage, but not less. In addition, your dealer may require that you carry a lower deductible than you might normally carry. Since a higher deductible can lower the cost of your premiums, talk with your lease dealer about raising your deductible with proof that you have enough cash reserves to cover the bill in the event of a claim.
Another important consideration is that your lease company may require you to replace any damaged parts with original equipment manufacturer (OEM) parts rather than after-market parts. OEM parts tend to be more expensive, so make sure your collision and comprehensive insurance has you covered.
Gap Insurance
Imagine driving your brand new car off the lot and putting the first miles on your new vehicle. In the very first week, you hydroplane during a torrential downpour. Your car skids off the road, rolls over, and is deemed a total loss. You are completely safe thanks to your new car’s advanced safety mechanisms, but you get an ugly surprise when the time comes to file a claim. It turns out that your collision insurance only covers the actual cash value of your leased vehicle. Since it depreciated the moment you drove it off the lot, you are responsible for paying the difference of the loss to the dealership.
With gap insurance, you can trust that your leased vehicle is covered for its full replacement cost. Gap coverage helps pay the difference between the actual cash value of your vehicle and the amount you owe your dealer. Since a car can depreciate thousands of dollars within the first year, gap insurance could save a lot of money if you are in an accident. In fact, many dealers purchase gap insurance on the vehicles they lease and pass the costs onto customers. If you lease a vehicle that does not have gap insurance included in the payment, talk with your agent to find out if you can add it to your collision policy. Unfortunately, gap insurance is not available in all states.
Save Money on Wisconsin Car insurance
Although leasing requires more insurance protection than buying, there are still ways to save money on coverage. Start by shopping with an independent agency like Heinen Insurance here in Sheboygan. An independent agent can help you determine how much liability, collision and comprehensive coverage you need and then compare rates on coverage from several of the state’s leading insurers. By shopping around, you may find that one company offers more discounts or better rates than another – especially if you have a clean driving record, a vehicle with enhanced safety features, or if you bundle your car insurance with another type of coverage, such as your homeowners insurance.
