So you decide it’s time to get a new car. A big question you may ask yourself is should I buy or lease? There are many different factors to look at when making this decision, but one thing you might wonder is what effect buying versus leasing has on car insurance. The real answer is that it depends. Technically, leasing a car requires higher insurance, but that doesn’t mean everyone will have to pay for higher coverage than they already have.
All states have minimum car insurance requirements. These are based on the average cost of a vehicle and the average liability cost in the case of an accident. However, it is highly suggested that you buy more than the minimum coverage because that coverage will actually make you very underinsured.
So that leads into the difference between insurance for leasing and buying a car. When you choose to buy a car you can choose how much car insurance you want. That means if you wished you could only purchase the minimum amount. However, if you lease a car then the leasing company gets to choose the minimum amount of insurance you carry because they technically still own the car. That being said this amount of insurance is going to be higher than the state minimum. The big question is how much insurance you currently carry. For a lot of people, the leasing company minimum does not affect the leaser because they already carry more insurance than required. On the other hand, some people might have to add more insurance to their coverage. The leasing contract also prevents you from being able to decrease your coverage at any point. The best way to figure out what option works for you is to look at different insurance quotes and compare to what the minimums may be.
“Are Leased Vehicles More Expensive to Insure?”AutoInsuranceNowcom Are Leased Vehicles More Expensive to Insure Comments. AutoNow, 10 Apr. 2012. Web. 16 July 2015.