My sister has a leased vehicle. I woul like to know what is the required minimum liability on that car. We live in Texas.

John

Houston TX

In Texas the minimum liability insurance is $25,000 for each injured person, up to a total of $50,000 per accident, and $25,000 for property damage. This basic coverage is referred to as 25/50/25.

Since your sister has a leased car she will be required to purchase more insurance than what the Texas requires. She may be required to get the physical damage coverage. Physical damage coverage consists of collision and comprehensive coverage. Usually, collision insurance covers damage to your car caused by collision with another car or object. Comprehensive insurance covers damage to your car from vandalism, theft or glass breakage. Most lien holders require physical damage coverage if you are leasing your car.

If your sister is leasing a car she will need to insure it. You may ask the lien holder to know if she is required to obtain the physical damage coverage of collision and comprehensive on the car.

I have a leased car in Texas and I would like to know what is the minimum liability auto insurance that is required for leased vehicles.

Pat

Houston TX

Since you are leasing a vehicle you will be be required to buy more insurance than what your state mandates. They will likely require that you get the physical damage coverage of collision and comprehensive coverage. Generally, collision insurance coverage covers damage to your vehicle caused by collision with another car or object. Comprehensive insurance on the other hand covers damage to your car from vandalism, glass breakage or theft. Most leasing company require physical damage coverage if you are leasing your automobile. You may also be required to carry a large limits of bodily injury liability and large limits of property damage liability.

My father and I just leased a vehicle. The problem is that I have a revoked drivers license and the dealership wants to exclude me and the auto insurance company will not exclude me. Can you tell me what to do?

Brian

Dallas TX

Most car insurance providers will not exclude you if the policy is under your name – meaning you are the named insured. The auto insurance policy will probably need to be in your father’s name – if they exclude you to the auto insurance policy. However, you will not going be covered to operate the automobile if you will be excluded to the car insurance policy. I suggest that you get your drivers license restored as soon as possible. Even though the dealership would want you to be excluded, you will have to verify with the car company to be certain it is ok for you to be excluded.

Does lease company pay for auto insurance of the leased automobile?

Amanda

Los Angeles CA

I do not think so. What I know is that you are still responsible obtaining car insurance on the leased car. It is true that the lease car company technically owns the vehicle but normally if you check the leasing documents not only you will be required to have the minimum liability insurance in your state but you will also be required the collision and comprehensive car insurance coverage.

If you fail to maintain the required car insurance on the vehicle that you are leasing and the car company finds out, what could happen is that they will take out forced auto insurance on the leased car and will be charged to you. I heard that it is more expensive that way.

When the car insurance company or the financial institute that owns the vehicle gets the “forced” auto insurance for you, the car insurance premiums will be costly than if you bought the leased car insurance yourself. This car insurance typically provides protection to lessor, not to you, for their interest in the automobile.

I was leasing a new Ford Mustang for 2 years, but now they say the price of the Mustang is soo low that I lost value, or something like that….I think he said its residual value was lower than market value? Help…I think I am getting screwed on this car lease “deal”.

Anne,

Houston, TX

Example 1 Residual Value: What the vehicle will be worth at the end of the lease. It may or may not match true estimates of the used car value at that point. Residuals are determined by lenders. You are unlikely to be able to negotiate residual value, but you can comparison shop for the highest available.

Example 2 Residual Value: The value of the means of transportation at the finish of the lease. Now, let us work out a sample rent imbursement based on a vehicle with an MSRP (sticky label price) worth of $25,000 and a currency factor of 0.0034 (this is usually quoted as 3.4%). So this is how it will look to you

The scheduled lease is over three years and the predictable outstanding proportion is fifty-five.

The first step is to compute the left over value of the car. You reproduce the MSRP by the outstanding proportion:

That is $20,000 X .55 = $11,000.

The vehicle will be significance $13,750 at the closing stages of the lease, so you will be by means of:

That is $20,000 – $11,000 = $9,000

This quantity of $9,000 will be use over a 36 month lease epoch giving us aMonthly payment of:

That is $9,000 / 36 = $250.

best of luck to you, you really can not negociate the lease AFTER the lease is up…..but you might be able to find a sucker to buy the vehicle from you for more than the residual price…..maybe post it on Craigslist.com?

Rose,

NYC NY

Hey Rose, I was shocked to find out that approximately 75% of luxury cars are leased. After a temporary slowdown during the last few years because of aggressive zero-percent loan programs, leasing is once again growing in popularity.

Approximately 75% of luxury cars are leased. After a temporary slowdown during the last few years because of aggressive zero-percent loan programs, leasing is once again growing in popularity.

You might want to talk to your tax adviser about weather leasing or buying is in your best interest…but leasing is not a bad idea for the type of high end vehicle you are looking into. Best of luck

Don,

San Jose, CA

Shirley,

Houston, TX

Hi Shirley, does this help explain their programs to you?

SmartLease Plus expands the lease to help you avoid monthly payments (contact GMAC for more information). And the Low Mileage Lease benefits those who drive under 12,000 miles per year with lower lease payments.

Smart Buy is also a program that allows you to eventually own your vehicle, however monthly payments are typically lower than those of traditional retail financing.

Auto leasing is gaining popularity among consumers in the US because it offers them a chance to drive the cars they want, often better cars than they can afford to buy.

Low monthly payments are a big attraction of auto leasing. Auto leasing is more popular than ever – leasing has grown ten times since the mid-eighties. In fact, 29-36% of the 15 million-plus cars sold in the United States are leased.

Auto leasing is increasingly popular among money conscious consumers. While only 12 percent of total passenger cars delivered in 1986 were leased, 24 percent of 1992 deliveries were leased, and 28 percent of 1997 deliveries are expected to be leased. That number is expected to double in the next 5 years in the U.S. alone.