Auto Insurance and Leasing - idnnews
Auto Insurance and Leasing

Auto Insurance and Leasing

Auto Insurance and Leasing
Auto Insurance and Leasing

When leasing a car, it’s easier to stick with the same company for your auto insurance. What you don’t know, however, is that you may end up  paying too much for your coverage and it’s better to look elsewhere for  lower rates. 

When you lease, the vehicle that you will drive belongs to the leasing  company. They want to make sure that their investment is covered in the  event the vehicle gets damaged, totalled or stolen. They typically want  to get covered for the difference between what your auto-insurer pays and your outstanding leasing obligations at the time of the accident or  damage. 

This is called GAP, short for Guaranteed Auto Protection, and is  usually included in the leasing contract.  If your leasing company is called BMW Financial Services, Chrysler  Financial or any other finance division of an automaker, then chances are your GAP insurance will be offered by the same lease company.    

You are under no obligation to accept GAP insurance included as part of  your lease agreement. Why pay an insurance premium if you could get the  same coverage for a lower price?  Invest some time shopping by comparing quotes from other insurance  companies, including your existing one. Ask for discounts that you already  qualify for and adjust your coverage accordingly.

Benefits of leasing

Despite aggressive low-interest financing, cash-back offers and other  purchasing incentives offered by leading auto-makers to buyers, leasing  numbers keep increasing steadily over the years. Leasing is not only an attractive financial proposition to most auto-consumers, but also a  lifestyle and preference choice. 

Benefit Number 1: Keeping up with the latest trends

Leasing is sometimes more of a personal and lifestyle choice than a  financial one. Many people are not comfortable with the idea of owning a  vehicle over a long period of time. They’d rather keep up with the latest trends of the industry and drive the latest models every two to three  years. 

Leasing a car gives you the convenience of having the latest technology  and safety innovation, such as an electronic stability system, DVD  entertainment systems and advanced stereo equipment. If you are willing to  forego ownership for the latest set of wheels, than leasing is your best  option.

Benefit Number 2: Purchasing Flexibility

Leasing also offers purchasing flexibility: it allows you to defer the  purchasing decision while using the car. You don’t have to haggle with your  mechanic over repair expenses, deal with hefty maintenance bills or worry  about a depreciating asset. Provided you can keep the vehicle in good  condition and stay within the contracted mileage allowance, you’re  effectively getting a test drive for the length of your lease.  At the end of your lease, you can purchase the vehicle or simply turn in  the keys and walk away. No questions asked.  

Benefit Number 3: Cash Flow

Leasing offers many short-term benefits. It reduces your initial cash  outlay as you do not have to pay the large down payment required for car  ownership. You only pay for the depreciation on the car - only the part you will use during your lease, not the entire vehicle. This results in lower  monthly payments and frees even more cash. This cash can be put to use more intelligently elsewhere than the questionable investment of owning a  depreciating asset. If you are self-employed or use your car for your job,  then you can write off your leasing payment as a business expense. 

Benefit Number 4: Negotiating Leverage

Although it may seem a little unorthodox in this industry, almost  everything about leasing is negotiable. If you know all the fees involved,  you can lower your monthly payments, negotiate the purchase price of the  vehicle at the end of the lease and contract additional miles on top of  your mileage limit. You can also do some shopping around and compare deals  from different auto-insurers to get the cheapest GAP insurance for your  lease. 

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