Leasing A Car: Caveats For Non-Ownership Driving Privileges
Posted on: 1 July 2018
When you lease a car, it is not technically yours. You make monthly payments on it, and you even have to carry full coverage insurance on it, but it is not yours. Of course, there are benefits to leasing a vehicle, but the caveats for non-ownership driving privileges are very different.
You Agree to Overhead Costs
Some dealerships have overhead costs with allowing drivers to lease vehicles. These costs are typically passed on to drivers. Before the process of leasing begins, you have to agree to these added costs.
You Must Carry Full Insurance at All Times
All dealerships require that you carry full coverage insurance on all leased vehicles. In the event of an accident, their property (i.e, the car) is covered. The insurance company restores the vehicle to its full glory, or pays most of the remaining value on a "totaled" vehicle. You have to pay the deductible, and any remaining value on the vehicle that is not covered by your insurance, which is why you are required to carry the maximum coverage for collision, liability, etc.
You Cannot Get Insurance Without Registration
With a leased vehicle, the title remains the property of the dealership. The registration is made in your name because you are the driver of the vehicle during the lease period. Before you can drive the leased vehicle off the lot, you have to take a copy of the title from the dealership, and a copy of your registration from the DOT/DMV, to the insurance agent. Get the insurance card as proof that you have acquired insurance for the leased vehicle. This is often very confusing to most consumers, as the process seems a little backwards, but that is how it is done.
Leasing to Own
If you lease for "x" number of years then decide you want to convert your lease to a buy contract, you can. At this point, everything changes again because the car is officially yours going forward. Now you can change the amount of insurance on the vehicle, but only after you have converted the lease papers to ownership papers and you have registered the new title in your name.
Liability insurance is the least amount of insurance allowed by law in most states on vehicles you own. The lease requirement of full coverage ends. You are now in charge of the amount of insurance you want to carry.
For more information, contact a company like R L Jones Insurance Services Inc.
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