The car lease business is a common thing done in the UK. In case you don’t have an idea of what a car lease is, it is an act of renting a car for utilization by an individual.
You can’t own a leased car, you are required to drive for a certain period of time (depending on the contract you signed with the manufacturer or owner of the car) and return back.
Most individuals who lease cars have the intention of avoiding the monthly bill payment that is attached to owning a car. If you are considering staying in a place for a short period and you need a car, leasing is a good option for you compared to buying a car as it will ease the stress of moving your vehicle through ships or airways.
Does car lease include insurance? Keep your mind relaxed as you are just in the right place to find out.
Does Leasing Include Insurance?
Usually, car leasing doesn’t require vehicle insurance as you are only renting out a car for a certain period of time. In this case, you will have to get a carrier to get you and your leased vehicle insured.
The basic insurance policy to go for as a car owner or a lease is the liability insurance policy. The policy helps to cover for damages incurred by you to another driver when driving.
Liability insurance is considered as the basic insurance policy every driver should purchase but you should know that there is other insurance coverage you can add to liability insurance which includes comprehensive and collision coverage.
Leased Car Insurance Requirements
As indicated above, there is other car insurance coverage to add up to your liability insurance which is the comprehensive and collision insurance coverage and they are explained below:
Collision Insurance
As the word “collision” entails, it basically provides coverage for your car if the damage was incurred during a collision with the other party car.
Comprehensive Insurance
This insurance policy offers coverage on your vehicle if your vehicle solely got involved in an accident without another party involvement. Comprehensive insurance covers accidents like running your car into a pit, bumping your car on a tree etc.
Gap Insurance
The owner of the car you leased can require you to buy gap insurance for their car which would provide coverage for the difference in your car’s value after an accident and your remaining leased debt.
Uninsured Motorists Coverage
This mainly covers cases of an uninsured or underinsured driver causing damages to your vehicle when driving or a hit and run driver.
Original Equipment Manufacturer (OEM) Insurance
The owner of the car you lease may require you to get OEM insurance coverage. This insurance protects your vehicle on issues of expenses on repairs and other charges that pertains to fixing in the original parts to the leased car as the insurance policy entails your leased car gets to the owner to its actual state.
Advantages of Leasing a Car
The advantages of leasing a car can be seen below:
- Ability of driving latest cars in town.
- Less car maintenance compared to older or outdated cars.
- Less worries on selling your car when you need a new car.
- You can easily get rid of the car for another car when your lease contract is over.
- You’ll get a lower monthly payments compared to a financed car.
- A fixed warranty is given (it doesn’t expire) on a leased car.
Disadvantages of Leasing a Car
It is assumed that everything that has an advantage equally has a disadvantage. The case of leasing a car is no exception as seen below:
- There is no equity for a leased car as you do not own it
- You are required to remove any customization on the vehicle on the expiration of the deal.
- All leased cars are limited to mileage.
- Overstepping the limitations of mileage can cost a great deal of money.
- Leasing is more expensive compared to buying a car.
- Trying to end the lease before the deadline can be expensive and difficult.
Conclusion
Does car lease include insurance? If you have been following this article you must have known the answer by now. The answer is yes. Every car driven on the road needs to have insurance coverage whether you own it or not.
Car leasing has its advantages and disadvantages. If you intend to lease a car ensure you go through the T&C to know if it is favourable to you or not.
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