As a responsible driver, you understand the importance of buying a good auto insurance policy when you purchase a vehicle. However, for many people, owning a car outright is not always the best option. Just like a car you own, a leased vehicle needs a good policy in place to protect it on the road. Here are a few of the most commonly asked questions about car insurance and leased vehicles so you’ll know what to expect.
4 Common Questions About Auto Insurance & Leased Vehicles
Do I really need coverage?
When you lease a vehicle, most dealerships require that you purchase an auto insurance policy as a condition of the lease agreement. Failure to maintain coverage or refusal to acquire coverage in the first place could cause them to revoke the lease and repossess the vehicle. Furthermore, car insurance is required by law in order to register the car. Even if you don’t own the vehicle, the car still needs to be registered under your name.
Can the dealership really require specific coverage types and limits?
Yes. While every state sets a minimum amount of liability coverage required for registration, the dealership is free to require additional coverage. Before purchasing coverage, check with the dealership or leasing agency to make sure the policy you intend to purchase meets or exceeds their required coverage limits.
Will I still be able to qualify for discounts on coverage if I don’t own the car?
The coverage is in your name, not the leasing agency or car dealership. This means if you bundle your car insurance with your homeowners or renters insurance policy, you’ll likely qualify for a discount. Ask your insurance agent about any available discounts when you get your quote.
Will my insurance policy cover the full cost of repairs?
When you own the car, you’re free to choose aftermarket parts for any necessary repairs. However, when you lease the vehicle, the lease may require that any broken parts be replaced with original equipment manufacturer (OEM) parts. Often, these cost more than aftermarket counterparts, but your auto insurance provider may offer an additional policy specifically for leased vehicles to help offset the cost of those parts.
Getting ready to lease a vehicle? Make sure you have the right auto insurance policy in place before driving off the lot. Contact the experienced agents at Allstar Insurance in Lincoln, NE, and let them help you find the best coverage for your needs. Whether you’re looking to save money on premiums by bundling homeowners insurance with your new car policy or simply want to update coverage on an existing vehicle, they’re ready to help. Learn more online and call (402) 477-0900 for a free quote.