A car leasing contract corresponds to a vehicle rental at the end of which you have, or not, a purchase option. However, to be able to drive legally, you must choose auto leasing insurance . What are the risks to be covered? Who to go to? What is the minimum guarantee to subscribe for auto leasing insurance ? So many questions that we answer you.
How to choose your auto leasing insurance?
What is auto leasing?
The car leasing is to rent a car from a rental company for a specified period , usually two to five years. The two parties define in advance the amount of the monthly payments. This rental contract comes in two forms:
- The first, called LOA (rental with option to buy) , allows the driver to have an option to buy at the end of his rental contract. This means that he will be able to acquire the car for an amount equivalent to the value of the new car less the monthly payments paid throughout the LOA contract.
- The second form, called LLD (long-term rental) , requires the driver to return the car at the end of the contract.
What are the advantages and disadvantages of auto leasing?
This type of rental contract has several advantages. It allows access to a new car or a used car whose condition is close to new without having to make a car loan or provide a contribution. Often, the monthly payments are relatively affordable, much more so than if you bought the car directly on credit. In addition, the driver frees himself from all the administrative formalities related to the contraction of a car loan, which can be very heavy.
In addition, you usually have certain guarantees. For example, the rental agreement may provide for regular maintenance of the car. For LLD contracts, this allows the driver to change vehicles very regularly, without worrying about taking back his old car.
However, the number of kilometers you can travel per year is usually set in advance, and if you exceed this planned number of kilometers you have to pay a penalty, which is usually quite large. It is therefore necessary to be rigorous in monitoring your mileage . Under an LOA leasing contract, if you do not wish to acquire the vehicle, you will have to pay a car reconditioning tax, which can make the concept of leasing less attractive in the long run.
As you can see, with these LOA or LLD leasing contracts, the driver does not legally own the vehicle. Nevertheless, he must put the registration card in his name and insure the vehicle, as if it were his own. In addition, in the event of a claim, the car excess remains the responsibility of the driver .
Rental vehicle: how to find your auto leasing insurance?
When you take out an auto leasing contract, you must take out an auto insurance contract on your behalf. And this, even if you do not own the vehicle! ? Insurance for rental with option to purchase or long-term rental can be taken out in several ways.
Car insurance can be taken out directly through the organization with which you signed your LOA (rental with option to purchase) or LLD (long-term rental) contract. In this case, you will not have the choice of your insurer and may miss out on a contract with similar guarantees cheaper. Know that you can also take out auto insurance on your side., which will allow you to get the best price by choosing from a wide choice of insurance offers.
As with a car that you own, you can freely choose the auto insurance plan of your choice. However, you must still respect the minimum level of protection required by the lessor. This is often a third party insurance supplemented with a theft and fire guarantee. Let’s see what guarantees to take out to best protect your vehicle.
Which formula to choose for your LOA or LLD auto leasing insurance?
Vehicles rented under an LOA or LLD leasing contract are new or almost new. So these are very expensive cars. In order to reduce your car budget, you can take out the cheapest car insurance with Third Party insurance. However, third-party insurance offers the minimum of guarantees, including civil liability coverage. It therefore does not cover damage caused to a third party. This means that in the event of a claim, your brand new leased car will not be covered.
In this context, we therefore advise you to opt for All Risks insurance , which will optimally protect your car and offer you enhanced assistance. Indeed, the subscription to this auto insurance formula allows you to be covered in the event of damage caused to a third party or to his vehicle, but also to obtain compensation in the event of damage caused to your car or to you. even. You are also covered in the event of theft or fire of the vehicle. It is therefore also in your interest to take out All Risks insurance . Thus, you will not have to pay a large sum in the event of an accident.
Good to know: with many insurers, there are special LOA or LLD auto leasing insurances . These are products designed specifically for rental vehicles. Thus, the guarantees adapted to the situation are already included.
What guarantees should you add for your auto leasing insurance?
When you lease an LOA or LLD car, it is worth adding an increased value guarantee . This allows you, in the event of total loss of your vehicle, to be compensated for an additional amount to that declared by the expert. Thus, thanks to this guarantee, the financial loss is relatively amortized. In addition, other guarantees may be offered to you depending on the insurers. We advise you to consider them at length before making your decision. Indeed, if certain repairs were to be at your expense, your budget would take a big hit.
Whether it has a purchase option or not, an auto leasing contract allows you to lease a new car over a long period of time and therefore requires that you choose your auto insurance with particular attention. You now know how to choose your auto leasing insurance. ?