Do Leased Cars Come with Insurance?
Leasing a car can be a great deal. You can drive a nicer vehicle with lower payments. But there are many differences between buying a car and leasing a car. Let’s look at how car insurance works with leased cars. Do leased cars come with insurance?
Who Pays For The Insurance When A Car Is Leased?
Typically, the person leasing the car provides the insurance, just like when you buy a car. There can be a few differences.
When you buy a car, you are required to have liability insurance equal to the minimum required by your state of residence. If your car is not paid for in full yet, you will also be required to have collision insurance and comprehensive insurance up to at least the amount of money that you still owe on the car. That way, if you get into an accident that totals the car, your creditor will get the remainder of the loan paid off.
Leasing a car is similar, but it is important to read the fine print in the lease agreement. The details will be in this agreement, and you will need to show proof of insurance to be able to lease the vehicle. The lessor may well require the following:
- Liability insurance, but this could be in much higher amounts than the state minimum.
- Collision insurance to cover the car, often with a deductible of $500 or $1000.
- Comprehensive fire and theft insurance, often with a deductible of $500 or $1000.
In addition to reading the lease agreement fully before signing it, educate yourself about how leasing works. The federal reserve has a publication entitled “Keys to Vehicle Leasing,” which is a good place to start. The bottom line is that leasing a car is a different process than buying a car, and you will want to make an informed decision.
If I Lease A Used Car, Does It Come With A Warranty?
Perhaps. If you lease a “newer” used car, it may still be under the original manufacturer’s warranty. For example, if you lease a two-year-old car that originally had a three-year warranty, you will still have one year left on that warranty (assuming that no issues have taken place to break the warranty like excessive mileage). Some lessors will provide a warranty when you lease a used car. Warranty rights can also vary by state, so it is a good idea to learn what applies in your state of residence.
Be sure and keep up with your regular car maintenance. Failing to do so could cost you big bucks if your car has a problem.
What Happens If You Get Into An Accident In A Leased Car?
If you get into an accident that is someone else’s fault in your leased car, their insurance should cover any damage up to the limits of their policy. If the other driver is uninsured, then the uninsured driver portion of your insurance policy would go into effect to provide you with at least some protection.
If you get into an accident that is your fault, you will have to pay the deductible on your insurance and then your insurance policy would to paying for the other drivers damages up to the dollar limits of the policy.
Just like if you get into an accident that is your fault in a car that you own, if you get into an accident that is your fault in a car that you are leasing, your insurance rates will more than likely increase.
If I Drive Less, Will The Insurance For My Leased Car Cost Less?
Probably not. The mileage you drive is unlikely to impact the cost of the car insurance that you will need to provide to lease the vehicle. If you have a lifestyle that requires low mileage, make sure and speak to your insurance advisor about this when you are looking at what car insurance policy will be right for you for your leased car.
Also, make sure to read the details of the lease agreement, including whether there are mileage limits on the lease. Often you will need to pay additional fees at the end of the lease if you exceed the expected mileage.
Do Leased Cars Come With Roadside Assistance?
As a rule, no, but it doesn’t hurt to ask. Roadside assistance can be helpful, and sometimes insurance companies will offer it as an add-on to a regular insurance policy for a small fee. Typically, the person who pays for the car insurance would also need to decide if they wanted roadside assistance and then pay for it accordingly.
Although roadside assistance can help in any minor (or not so minor) emergency, especially if you anticipate vacationing by car or using your leased car for business-related road trips, it can give you real peace of mind. A flat tire or a strange hissing sound is usually easier (or at least less stressful) to deal with if you know someone is coming to help.
What Happens If I Get A DUI In A Leased Car?
The situation will be about the same as you getting a DUI in a car that you own. You are likely to be arrested, may lose your driver’s license (at least temporarily), and you could go to jail or have expensive fines and court costs. The courts could require you to install an ignition interlock device in your car. A DUI will also make it more difficult (but not impossible) to get car insurance in the future.
If you get a DUI, seek advice from an attorney, take care of all legal and financial responsibilities to the best of your ability, document that you have done this, and never drive impaired again. A second DUI is even more costly. Many potential employers and landlords will do background checks that could identify a DUI on your record.
You want to make it a one-time mistake and be able to demonstrate that is what it was. If you or a loved one is concerned about your drinking or chemical use, consider talking with a counselor. Help is available, and it may even be covered by your health insurance.
Get the Best Car Insurance Available for Your Leased Vehicle
At Bluefire Insurance, we are committed to providing the best coverage at the best price to consumers. Are you interested in how we might be able to help your auto insurance customers? Feel free to reach us by filling out this contact form or give us a call at (866) 424-9511!
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