Leased Cars and Car Insurance
So you’ve gone back and forth on deciding whether to purchase a new car or to lease one. After finally deciding to lease a car, do you know how to properly protect it with car insurance coverage? While insuring your leased car will be a lot like insuring a car you bought, there are a few differences you need to be aware of.
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GAP Insurance for Your Leased Car
Let’s say you’re driving around in your newly leased car when another driver runs a red light and plows into your car. You and the other driver are ok but your car is totaled. You have only had the car for a couple of months and still owe $20,000 on it, but your insurance company is only going to cover the current value of the vehicle--$15,000. GAP insurance coverage will “fill the gap” between the two amounts. If you don’t get GAP insurance, then you will be held financially responsible to come up with $5,000.
Comprehensive and Collision Coverage
The company that you are leasing the car from will more than likely require you to carry both comprehensive and collision coverage. Comprehensive coverage will protect your leased car in case of damages caused by a tree falling on it, fire, theft or vandalism.
Collision coverage will protect your leased car in case of an accident. If you collide with another vehicle or a stationary object, your collision coverage will protect your car. Both your comprehensive and collision coverage both come with a deductible. The deductible is the amount that you need to pay out of pocket before your insurance starts to kick in.
Deductibles for Your Leased Car
With car insurance, the higher your deductible the lower your car insurance premium will be. While everyone wants to save money on their car insurance rate, not everyone can afford to pay $1,000 if they get into an accident. To choose your deductibles, find an amount that you are comfortable paying; you never know when an accident will happen.
If you decide to lease a car, make sure you still have the right amount of car insurance to financially protect it. Use InsuranceRates.com to compare multiple car insurance quotes to help save you money.
