]]> http://www.cheapleasecar.com/automobile-insurance-for-leased-cars-louisiana-la.html/feed http://www.cheapleasecar.com/leased-automobile-insurance-texas-tx.html http://www.cheapleasecar.com/leased-automobile-insurance-texas-tx.html#comments Thu, 20 Nov 2008 14:24:59 +0000 author http://www.cheapleasecar.com/leased-automobile-insurance-texas-tx.html Reader’s Question:

I don’t own a car. What if I lease a car? Will I still need auto insurance?

Frances

Austin, TX

Leasing is fast catching up. A lot of people are into it. It is the advisable thing to do if you want lower monthly payments, a new car every couple of years and the benefits that go with a new car, like the latest safety features and high-tech automobile gadgets.

However, even if you don’t own a car and you go ahead and just lease one, you would still need to have auto insurance. It’s not legal to drive around the state of Texas without auto insurance coverage. You can not legally drive around Austin, TX, without insurance. Besides, the auto dealer or bank that will be financing the car lease will require you to have collision and comprehensive coverage. Collision insurance coverage takes care of the damages to your car if you collide with another car or object. Comprehensive insurance, on the other hand, pays for the damages to your vehicle caused by anything other than collision. This would include vandalism, natural disasters and even theft. You have to understand that when you lease, the car belongs to the company. They would want to make sure that their property will be properly covered and taken care of while you’re using it. You need to have these policies required by the car company and also liability insurance as this is required by the state.

Tags: auto insurance, car insurance, leased car insurance

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?

I want to lease a new Toyota Prius…..damn gas prices are out of sight! The dealership wants to charge me a bunch of smaller “Fees” in addition to the lease fee, what should I do….go to a bank for a lease?

Tom,

Detroit, MI

Dealerships value your business and are ready to negotiate. Mention important options before you seal the deal. Dealers know that some people like to swap cars often and want the flexibility to get out of a particular car when they choose.

What the dealer doesn’t tell you is that leasing is designed in a way that makes it both difficult and expensive to terminate before the normal end date. Dealers also try to sell you on leases by doing a comparison between the payments for a lease and the payments for the same car on a conventional loan. Invariably, the comparisons show the lease payment to be the winner. Most banks will not offer a car lease, but there are a few aftermarket companies that will…so shop around.

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

Jerry,

Dallas,TX

Perhaps as recently as 8 years ago, most auto consumers had never really heard nor considered leasing a viable options for their auto financing.

Today, leasing accounts for nearly 35% of total auto sales in America (that?s more than double that of the previous decade)! Perhaps, the most important thing to keep in mind is experience. In fact, that may be why you are seeking professional help instead of trying to restore your own muscle car.

Perhaps more importantly, this angle helps to solve the incentive mess that manufacturers dug for themselves with 0% financing and ever-spiraling rebate deals. They started in the 1980s with Lee Iacocca’s “buy a car, get a check” $50 rebate campaign.

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.