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Buying vs. Leasing a Car: How It Affects Auto Insurance Quotes

Many may wonder how their auto insurance quotes will be affected based on whether they opt to buy or to lease a vehicle. The truth is that there is not really a difference between the two options when it comes to auto insurance quotes. Insurers are concerned, primarily, with the state of your driving record and the specific type of vehicle you want to insure. Rates are based on what risk you pose to them as a driver and the amount they may have to pay out if you are in an accident. They are not concerned with whether you have leased or purchased the vehicle, as they will have to insure it the same way, regardless of ownership status.

Something to consider, however, when leasing a vehicle, is that the leasing company will likely require you to carry "full coverage" insurance on your vehicle. If you are taking out a car loan in order to purchase a vehicle, they, too, may require this; however, if you are buying a car outright, without a loan, and the vehicle title will be in your name, you may opt to carry less coverage, making your auto insurance rates cheaper than if you were leasing. You may want to consider your options, however, when it comes to buying versus leasing.

There are some advantages to leasing. These include lower monthly payments (up to 60% lower than buying), the recurrent excitement of getting to drive a new car every two to three years, never having to worry about trading or selling your used vehicles, always having the latest safety features on your vehicle, and always having a warranty to fall back on.

There are also some disadvantages to leasing. You must have a stable predictable lifestyle in order to lease a vehicle as it is harder to get out of a lease agreement if your finances become unstable, where, with a purchased vehicle, you could sell it and recoup some of your loss. Another disadvantage is that you must drive a set number of miles and maintain the vehicle properly. Because lease terms can be strict, driving too many miles or waiting too long to complete routine maintenance may mean incurring fees. Also, many leases require that you carry gap insurance, which may increase your cost and, with all of these restrictions you may end up paying more long-term to reap the benefits of leasing.

Buying has some advantages as well. The best of these is that you own your vehicle and may drive as many miles as you want and customize the car any way that you choose. Because of this, you may be able to build up some of the vehicle's trade in or resale value. You may also have the option of continuing to drive your vehicle for many years, which will help lengthen the ownership time verses cost. When buying you may be more prepared for unexpected changes in your lifestyle once your car is paid off and you may even choose to remain payment-free for a while. You also will not have to worry about the risks of possible end-of-lease charges.

On the other hand, buying also has disadvantages. You will likely encounter higher monthly payments and eventually you will be selling or trading your used car at depreciated value. You will also incur the cost of repairs and maintenance once warranties have expired. These disadvantages are minimal. Whatever you choose, know that it will have little effect on your auto insurance quotes!

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Words such as "premium" and "deductible" may be foreign to some people. Many of us do not really understand the terminology thrown at us by big insurance companies. So how do you effectively compare and receive the best rates if you do not understand the language? Understanding all involved factors when it comes to auto insurance coverage is the first and most important step to ensuring that you have the correct coverage for your individual needs.

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Many may wonder how their auto insurance quotes will be affected based on whether they opt to buy or to lease a vehicle. The truth is that there is not really a difference between the two options when it comes to auto insurance quotes. Insurers are concerned, primarily, with the state of your driving record and the specific type of vehicle you want to insure. Rates are based on what risk you pose to them as a driver and the amount they may have to pay out if you are in an accident. They are not concerned with whether you have leased or purchased the vehicle, as they will have to insure it the same way, regardless of ownership status.

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