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What To Know When Renting And Leasing Vehicles

Renting and leasing vehicles are common practice by individuals nowadays, lease a nicer car to save on car payments, and be able to put les money down. Renting a car is done by millions of people every day for one reason or another. The important thing is to know you have adequate insurance coverage or you are not wasting money by purchasing redundant, duplicate coverage, and know what the bottom line costs will be.

Leasing deals are attractive, you can have a $40,000 car for the payment of a $20,000 car, but of course you don’t own it. Leasing a vehicle over buying it outright can come with certain insurance requirements, well as different registration procedures. When you lease a car you don’t own it, the leasing company is the owner, of course at the end of the lease you have the option to buy, but in this scenario the car still belongs to the lessor. Since it is still their car and in the majority of cases will be returned to them, they want to protect their interest. When registering a leased vehicle the care is registered to the leasing interest. If you plan on keeping your 30 year old license plate, you can’t, new owner requires a new plate. Excise tax is also important. The contract will stipulate who is responsible for excise tax, your or the leasing company, normally under a standard car loan, or if you own the car outright you are always responsible for excise tax. Remember, expensive vehicle, expensive excise tax. Insurance will be different as well; again you don’t really own the car, so they are protecting their vehicle. Since they want the automobile returned in re-saleable condition, they want adequate insurance to protect it. You may be required to carry lower physical damage deductibles, since the lessor will want to make sure their vehicle is repaired in an accident. They also may make you carry higher liability limits, again, protecting their interests. Since the car is new, maybe more costly, you are required to carry higher limits and lower deductibles, your new insurance premium may skyrocket. Don’t forget to take care of your leased vehicle, when the lease is up you are responsible for anything beyond normal wear and tear.   

When you rent a vehicle it may be short term, but it also comes with its own costs and liabilities. If you don’t have your own insurance the renting company will make you purchase insurance, they are of course protecting their vehicle and their liability. If you do have you own insurance the renting company may try to sell you added coverage that may not be necessary, you may be covered by your own policy or even your credit card may provide supplemental damage coverage. Check the terms with your credit card company, and review your insurance policy or contact your agent.  

Go into any leasing or rental deal prepared. Know what you need for coverage and have an idea of what all the final costs will be. What looks like a money saving deal may add up in the long run.