When purchasing a vehicle, there are many options to consider, including whether you want to buy or lease a car. This decision requires you to weigh the pros and cons of every expense associated with driving away in your brand-new vehicle—including insurance.
While shopping for auto insurance is not the most exciting part of the process, it’s essential to account for your monthly premiums and percentage of the overall cost of your vehicle. When weighing your options, you may think, “Is insurance more expensive on leased cars?” To help you make the best financial decisions, our team is here to answer your questions about auto insurance on leased vehicles.
What Insurance Is Required for Leased Vehicles?
In California, whether you lease or purchase a car, you must obtain auto insurance. Leasing companies typically require that you have collision, comprehensive, and liability coverage. These coverages will help protect you financially and cover the expenses associated with injuries caused to another individual or their property.
However, some leasing companies also need you to have gap coverage. This will help pay off the borrowed amount you owe on the vehicle. Gap coverages are especially helpful for those who get in damaging car accidents and owe more than the vehicle is initially worth.
What Factors Affect the Overall Cost?
Insurance requirements for leased vehicles are typically more expensive since it can cost more to cover a leased car than a financed one. However, leased vehicle insurance premiums are sometimes cheaper and a better financial option overall. When searching for coverage, knowing which elements factor into the overall cost is important. Auto insurance companies consider the following when calculating your monthly premium:
- Where you live
- Your driving record
- How much coverage you request
- Your credit score
- The mileage on your vehicle
- Your age and driving experience
- The vehicle’s type and model
- The vehicle's safety features
Are Leased Car Insurance More Expensive
Answering the question of whether insurance is more expensive on leased cars depends solely on the coverages required and the factors considered. However, leasing companies typically need you to purchase more coverage on an auto insurance policy than a financed or owned vehicle. There are many ways to decrease your monthly premium, such as taking safety driving courses or adding safety modifications to your car.
We understand how expensive auto insurance can be. That’s why we offer cheap car insurance in Los Angeles and surrounding cities in California. Saferoad Insurance protects you from accidents, theft, vandalism, and other unforeseen incidents. For more information, be sure to contact our team of agents.