There are two options when it comes to car ownership. A consumer may decide to purchase the vehicle, going through all the steps of down payments, loans, and having full control over the fate of the vehicle. On the other hand, a consumer may also elect to lease a vehicle. The consumer places him or herself under specific conditions determined in a lease agreement. These conditions can range from what the driver is allowed to do with the vehicle to what kind of insurance the consumer is required to purchase before driving.
As most states have made auto insurance a legal requirement to drive, dealerships naturally expect car insurance to be a part of the lease agreement. However, although not expected by some, a leasing agreement does not necessarily contain a standard car insurance policy. In most cases, the consumer will be asked to obtain the proper policy prior to being given the vehicle, and a third-party insurer must be contacted.
Although standard insurance is rarely, if ever, covered by a dealership in a lease agreement, the dealership will usually include a form of insurance that protects their best interests. Gap insurance, which covers the difference between what an insurer will pay for a totaled vehicle and the cost to replace the vehicle, is generally a part of a leasing agreement. On average, lease payments will include gap insurance already factored in.
Consumers need to have a basic understanding of how their leasing agreement works before signing on to make regular payments for a vehicle. To search for a third-party insurer to help you stay insured with a policy that meets legal requirements while matching your finances, try starting with a local car insurance company.
