How to Get Cheap Car Insurance When You Lease

Considering leasing a car, rather than buying? If so, LeaseTrader.com, an online auto lease transfer marketplace, says you’re not alone. With the economy in the tank and everyone searching for ways to conserve money, many are opting to forego car purchases in favor of leasing these days.

There’s only one problem with this philosophy: Getting cheap car insurance isn’t quite as easy when leasing as when purchasing—leaving many people who have carefully budgeted monthly expenses shaking their heads and wondering why their car insurance rates are suddenly soaring.

Cheaper Insurance: a Leasing Challenge

Here’s the low-down: When you lease a vehicle, your leasing company requires you to carry certain types of auto insurance coverage at certain levels. This protects your finance company from loss if you’re involved in an accident while it owns your car. Drop below those levels—or change the coverage you’re carrying—in an effort to save money, and you may find your lease cancelled and, in time, your car repossessed.

According to LeaseTrader Spokesman John Sternal, “A lot of people don’t fully understand how leasing works. They don’t understand that they aren’t driving their own car. It’s the bank’s car.”

For the first time in a decade, leases made up more than 20 percent of all new car purchases in 2010, according to Edmunds.com. Following that leasing decision, little did many shoppers know that their car insurance rates were likely to increase with this change of direction, leading to a big surprise when car insurance premiums started coming due.

As a result, those who failed to budget for the change in insurance coverage found themselves beyond their means—and looking for a way out.

A Wise Solution

If you’re one of thousands of Americans considering leasing and you’re looking for cheap car insurance, get the facts up front before you sign those papers at the local dealership.

First, get prepared by calling your insurance company, letting your agent know what vehicle type and model you’re considering, and finding out what your car insurance rates will be if you decide to proceed. Then add that expense to the cost of the vehicle. If you find that amount more than you can handle, readjust, then lease or buy a cheaper car.

Remember, the goal of leasing is to save money by cutting expenses, not acquire the nicest car with the most options available.

Follow this timely advice and you could get car insurance cheap—while planning for the coming years just a little more wisely.

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