Leased Car Insurance Tips

How can you find cheap car insurance for your leased car? When you are leasing a car, it's easy to stick with the same insurance company for your car 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. Why? Let's take a look at how car insurance works for leased cars.

When you lease a car, 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, totaled 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. This is another method for the financing companies to make more money from you.

If you have to purchase car insurance for your leased car from the same company that finances your lease, this is acceptable. This is a method that is often used by the leasing companies to ensure that there is coverage on the leased car, something that they can't easily do if you are insured with another 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? This is where cheap car insurance quotes online can come in handy and allow you to find the best deal on car insurance.

One key factor is to remember that you are already paying a premium for your car lease. Most companies are leasing cars with the hopes that you will go over on mileage, damage the car or sign for another lease when the existing lease is over. By offering, or requiring, that you insure your leased car with their company, they are garnering more money from you.

Invest some time shopping by comparing cheap car insurance quotes from other insurance companies, including your existing one. Ask for discounts that you already qualify for and adjust your coverage accordingly. If you are able to insure your leased car with another company, chances are that the insurance rate will be lower, there will be lower fees and you can save more money.

By: Steve Rodgers

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