Leasing a vehicle is a great way to have a new vehicle if you do not have enough credit to purchase one on your own. It is important to keep in mind that there are special rules for insuring a leased car that are slightly different than normal.
When leasing a car, you do not own the car, the auto dealership or bank that is providing the loan does. Whoever is leasing the car to you will require that you invest in comprehensive and collision coverage with your auto insurance policy. Comprehensive coverage will provide protection in case the vehicle is damaged or destroyed by something other than a car accident, such as a theft, or a fire. Collision coverage will provide protection in case the vehicle is ever in an accident with another car or object.
It is not uncommon for the leasing company to require you to have “gap” insurance. If you total the vehicle, chances are that you will owe more money on the vehicle than what you will get from the insurance company. “Gap” insurance will provide the extra coverage needed to pay for the cost. Typically, the cost of a “gap” insurance policy is included in the lease payment, so you do not actually have to purchase a policy. Most auto dealers will buy a master policy from an insurance provider to provide coverage for all the cars they lease, and will add an extra charge when you sign a “gap waiver.” A “gap waiver” means that you will not have to pay the dealership for the cost of a car if it is totaled during the lease.
For all of your auto insurance needs when leasing your next vehicle, contact Phocus Companies in Phoenix, Arizona. We will work with you to ensure that you have the right amount of coverage for your new vehicle.
