Insurance for Leased Vehicles

While some financial advisers suggest that their customers avoid leased vehicles at all costs, other people find them to be a good choice. If you have the money to pay monthly, you want a car that is covered under an extensive warranty, you wish to have a new automobile every three years or so, and you do not expect to exceed the milage limits placed by your leasing agent, you may feel that this is the best option for you right now. We are happy to work with clients who have obtained their cars, trucks, and SUVs this way, but we want to let you know up front how you can expect this different financial arrangement to impact your premiums.

Special Requirements

  • Collision Coverage to provide for repairs and replacements if you are at fault in a collision.
  • A Comprehensive Policy to reimburse you for other damages to your vehicle.
  • Gap Insurance to make up for the difference between the remaining lease value and the book value of your car or truck.


When you lease a car, truck, or SUV, you are of course obligated to carry liability. However, these agreements also include provisions that the driver have a collision policy, too. One of these is designed to reimburse you for loss or damages if your vehicle is involved in an accident for which you are at fault. Without such coverage, you would be responsible for the costs to repair or replace it on your own, and so the leasing company needs to make sure that they will not lose money - or a car - should you opt not to accept collision. You will have to show proof of coverage before taking your new baby home.


This is another policy that you will need in order to lease a new car or truck. It will reimburse you for any damages to your auto for the following reasons: theft, fire, flood, hurricane, tornado, vandalism, earthquake, and numerous other natural disasters. Comprehensive coverage is important for the same reasons as collision. The leasing agent needs to know that his or her investment is protected in the event that something bad happens to your automobile.


Put on your mathematical hat for a moment. When you lease a car and drive it off the lot, it's book value - the amount which you would be reimbursed by your insurance should it be totaled - drops dramatically right away. The amount that you owe on the lease, however, has not fallen enough to match the vehicle's new value. Until that happens, you will be required to maintain a gap rider. In some cases, your leasing company will offer to add it to your monthly payment. However, you can often get a better rate by using your own insurance carrier.

As always, before you sign any agreements, make sure you know what all the charges will be upfront. A smart consumer can find numerous ways to save!

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