An automobile is a significant investment. In addition to the sticker price, consumers must consider all the other costs associated with car ownership.
With this in mind, you may wonder whether you are better off buying or leasing a car.
When it comes to insurance, your total premium is not typically affected by your decision to buy or lease. For the same car, your insurance will cost the same whether you own it or lease it.
Why? The rates are based on your driving record and the car itself, not how you purchase the car.
However, your ownership arrangement may affect how the insurance is set up. If you lease a car, the lender has an interest in the vehicle. Because of this, they will require that you add them to your insurance policy. If their name is on the coverage, and a claim is made, they will be able to receive payment for the portion they are still owed on the vehicle.
Other than this stipulation, obtaining insurance on a leased car follows the same procedures as an owned vehicle. Your coverage and insurance options should remain the same.
Where you will see a difference in premium quotes is among various vehicle options. If you want to lease a brand-new car, your premiums will probably be higher than if you purchase an older model. Keep in mind that the difference in premium has to do with the condition of the car and the cost to make repairs, rather than the lease option.
Because premiums can vary greatly based on the car, it’s a good idea to get a quote from your insurance agent before purchasing or leasing any vehicle. You don’t want to be surprised by any costs after you’ve already completed the paperwork to buy or lease your new ride.
To ensure the car is within your budget, consult with your insurance agent before you sign on the dotted line. Your insurance provider can answer any questions you have about coverage for a specific car you might be considering for purchase or lease. Contact them for details.