What You Need to Know about Leasing & Car Insurance

Getting a new car can be a new lease on life.

If you’re considering leasing a car in Ontario, understanding the ins and outs of the process is key. Leasing offers a flexible alternative to ownership, allowing you to drive a new vehicle without committing to long-term ownership. But, navigating the world of auto insurance is equally important, and it ensures that you’re adequately protected while driving your new car.

Understanding car leasing in Ontario

What does it mean to lease a car?

Car leasing is like renting a car for an extended period, typically two to four years. Instead of paying for the entire vehicle, you pay for its depreciation during your lease term. This usually means lower monthly payments compared to financing a purchase. Leasing provides is an option for those who enjoy driving a new car every few years without the long-term commitment.

Key factors to consider

When leasing, it’s essential to pay attention to key factors to avoid surprises down the road. Mileage limits are one such factor, dictating how many kilometres you can drive each year. Going beyond those limits could result in additional charges. Also, take into account the anticipated wear and tear on a leased vehicle. Familiarize yourself with the acceptable levels and potential charges for excessive damage.

What Onlia provides

When getting a quote with us, indicate that your vehicle is leased, and we'll automatically include the necessary coverages on your policy.

The role of car insurance in leasing

Legal requirements for car insurance

Car insurance is mandatory in Ontario. Basic coverage includes Third-Party Liability, Accident Benefits, Uninsured Automobile Coverage. Direct Compensation - Property Damage is no longer mandatory. However, we recommend you make sure that your insurance meets the minimum coverage limits required by law. This safeguards you in the event you face any further complications. 

Insurance considerations specific to leasing

When leasing a car, there are specific insurance considerations to keep mind. Comprehensive and Collision Coverage are also essential. They provide additional protection for your leased vehicle, and may be required depending on your agreement. 

Comprehensive coverage protects against non-collision events like theft or natural disasters, while collision coverage kicks in if you’re involved in an accident. It will help pay to repair or replace your car in the event you collide with another car or object. 

Common pitfalls to avoid when leasing 

Underestimating mileage needs

It’s easy to underestimate how much you drive, but exceeding your mileage limit can lead to hefty penalties. Be realistic about your driving habits and choose a mileage allowance that suits your needs.

Ignoring wear and tear responsibilities

Normal wear and tear is expected, but having your car look like a hotel room after a rock band’s stay may result in additional charges upon return. Regular maintenance and quick repairs can help you avoid these unexpected costs.

Not exploring multiple insurance options

While you’re legally required to have insurance, that doesn’t mean you should settle for the first policy you find. Explore different companies to make certain you’re getting the best coverage at the most reasonable rates.

Common concerns when insuring leased vehicles

What happens if I exceed my mileage limit?

Exceeding your mileage limit usually results in additional fees. Keep track of your mileage allowance and consider purchasing extra kilometres upfront if you expect going over the limit.

Can I customize my leased vehicle?

Not to play spoiler to your plans, but most leasing companies have restrictions on vehicle customization. Check your lease agreement or consult with the leasing company to understand what modifications are allowed.

What happens if I get into a collision while leasing?

If you’re involved in a collision while leasing, your insurance coverage will come into play. Notify your insurance provider right way and follow the proper claim procedures they have in place. Having Comprehensive and Collision Coverage keeps your leased vehicle protected.

Hitting the road with a leased car and new coverage

Leasing a car in Ontario combines the flexibility you need with the joy of driving a new vehicle without the commitment of ownership. Understanding the nuances between the two, and the importance of car insurance is necessary for a smooth and worry-free experience. Be mindful of your mileage, take care of your leased vehicle and ensure that you have the required insurance coverage.