Why Leasing a Car Requires Expensive Insurance
Leasing a car involves an extra cost that most consumers fail to take into account - expensive car insurance.
Leasing companies require that you get a high level of insurance coverage.
This typically means you will need liability coverage of $100,000 per person / $300,000 per occurrence and property liability coverage of at least $50,000.
That's significantly higher than legal state minimums, which usually require $30,000 in total liability coverage and $5,000 for property damages.
So why do leasing companies care what kind of insurance you have? It's mainly due to state laws that place liability on not only the driver, but also the owner of the vehicle.
When you lease, the vehicle is actually owned by the leasing company. If you were to cause an accident that injured someone, that person could sue your leasing company, which is usually what happens since they have deeper pockets.
If you're the type of person that gets a higher level of coverage anyway, then this won't be an extra cost to you. However, many people opt for minimum coverage, so leasing will potentially add a few hundred dollars to their typical insurance cost.
It's smart to take into account the insurance costs of any vehicle you're considering. Here are some of the least expensive and most expensive cars to insure to give you an idea.
Least Expensive Cars to Insure
- Mazda Tribute
- Honda Odyssey
- Chrysler Town & Country
- Dodge Grand Caravan
- Toyota Sienna
- Hyundai Tucson
- Kia Sportage
- Hyundai Santa Fe
- Jeep Patriot
- Honda CR-V
- Dodge Grand Caravan
- Toyota Sienna
- Dodge Journey
- Ford Escape
- GMC Canyon
- Ford Escape
- Porsche 911 GT2
- Mercedes S65 AMG
- Dodge Viper
- Porsche Panamera
- Dodge Viper
- Mercedes CL600
- Audi R8
- Mercedes SL600
- Mercedes CL65
- BMW M6
- Mercedes S600
- Mercedes SL65
- BMW 760Li
- Jaguar XKR
The good news: You can save a lot of money on car insurance by doing a little comparison shopping. Insurance rates change all the time - it's a good idea to get some competitive quotes every couple of years. This small effort can save you hundreds of dollars per year.
Here's a pull-down menu that shows you what major insurance providers are currently charging in your state:
3 Steps Every Car Buyer Needs to Take to Save Maximum Money
The key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:Step 1 Get Prices From My Trusted Network
Select the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).Step 2 Get Prices From TrueCar / CarsDirect
TrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.Step 3 Complete my Checklist
Follow this up with my checklist to make sure you squeeze out every last bit of savings.- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid
About The Author
Gregg Fidan is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate
the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.
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