An alternative way to obtain a new vehicle to drive is leasing a car, and this is both similar to and different than buying a car. If you have never leased a car before, it is important to find out exactly how a lease works before you go through with this method. It is also important to understand the car insurance requirements you will have if you decide to lease a vehicle.
The Key Difference Between Buying and Leasing a Car
If you have never researched what leasing a car is, you might have no clue how a lease works. So, it is important to know this as you prepare to lease a car and buy insurance for it. Leasing is similar to renting. When you lease a car, you really never own that car. Instead, you are just renting it from the dealer for a certain amount of time. You might sign a lease for 36 months, which means you are renting it for 3 years, or it could be longer than this. When the lease expires after paying the last payment, you give the car to the dealer where you leased it. When you buy a car, you keep the car after making the last payment, as it is now your car.
The Types of Auto Insurance You Will Probably Need
When leasing a car, you must still purchase auto insurance for it, even though you are just renting the car. In fact, you will probably need extra insurance for the car, as lease agreements generally stipulate this. This means that you will need collision coverage, comprehensive coverage, and almost any other type of coverage you can get. You might also need to have higher dollar amounts of coverage for each type you have. You will need to look at the lease agreement to find out what you agreed to carry, in terms of auto coverage, and you will have to purchase a policy that gives you all these coverage types.
The Importance of Having the Right Insurance
Having the right type of car insurance is important for anyone, whether you lease or buy a car. The difference when you are leasing, though, is that the car is not really yours. You will have to return it after the lease, and this is one of the reasons you will probably need more coverage for it than you would for a car you buy. If you are not sure what type of auto insurance plan you should purchase when buying or leasing a car, talk to an insurance agent.
