Can one purchase the insurance plan after leasing a car?

Ask the Hackrs
1

Sorry this may sound a stupid question.
I don’t own any vehicle yet and carry no vehicle insurance plan. Is it mandatory required to have an insurance plan before visiting a dealer to lease a car?

Since the insurance plan quota will depend on the vehicle (maker, model, and year), and I haven’t decided to purchase a 2016 or 2017 model yet, how to find the best deal on insurance plan at this point?

Any tips would be greatly appreciated!

2

You may not require insurance to visit a dealer and test drive cars. But (in most states, if not all) you’ll be required to provide evidence of the required insurance before taking delivery of the car and driving away.

For a lease, minimum liability will not be enough for the leasing company. They will require collision/comprehensive since they continue to own the car throughout the lease (you are essentially renting it from them).

3

You don’t need insurance for an exact VIN the day you drive away, as long as you have a current auto insurance policy covering other cars. Some insurers offer a grace period of a few days for you to actually get coverage on a new car.

However, you need some kind of auto insurance already in place. If you have no insurance, you’ll need to arrange it before you drive away from the dealership.

4

@bro1999 @max_g Great thanks.

I’m a newbie in SF bay area. Any tool or website that we can find the best insurance deal to lease a car among different insurance agencies?

5

The dealer will want to see proof of insurance before they actually release the paperwork (so will DMV). So no, you cannot buy insurance after the lease.

Get online quotes from progressive or geico. It takes a few minutes (need driver license, DOB) and a rough model [like 2017 BMW 528i]. YOu can save the quote and then firm it up once you have a sales agreement for an actual vehicle.

6

Or even get the VIN for the car with your selected options from dealer’s website.

7

Auto insurance, much like auto leasing, is a still very opaque marketplace that is crying out for better transparency in order for consumers to be able to shop around. I’d try the following:

  1. A personal finance forum, such as Bogleheads.
  2. A direct insurer that doesn’t’ advertise heavily on expensive media like TV, such as 21st Century. IME the ones that do spend heavily on marketing (Progressive, Liberty Mutual and Geico) are unlikely to have the lowest rates, since that huge ad budget needs to be recouped somehow. Of course, YMMV.
  3. This goes against my personal intuition, since cutting out the middleman should theoretically save money, but an insurance broker can sometimes save you money by finding better rates from non-direct insurers.
8

USAA if you qualify.

9

Check out Amica Mutual. That’s who my insurance provider is.

I have no idea how they do it, but their rates are literally 50% less than anyone else I have received quotes from (USAA, GEICO, Nationwide, Progressive…doesn’t matter).

10

There are only 2 ways an insurer can consistently underbid others by 50%
a) It means they only pay out 50% of their claims compared with others. For example, your totaled chevy Cruze that was just sitting in the driveway but got hit by a falling tree could be assessed as a 11k payoff whereas Geico would pay 16k?

b) they only insure the top 50% of drivers compared with others, and they will either drop you after a claim or jack up the premium 200%

1 Like
11

I’ve had a couple of claims with them over the years, and both times the service was top-notch. They also seem to win a bunch of J.D. Power awards (whatever stock you put in those), so they seem to be doing something right.

I’ve heard they are more strict with who they insure, so your b) explanation may be closer to the truth. Over 4 years now, and the premiums have more or less remained the same.

12

You live in Silicon Valley, the disruptors of the world :slight_smile:

Lots of startups in your city for this type of thing like Coverhound and more here: https://letstalkpayments.com/15-startups-disrupting-the-car-insurance-industry/

There is also Metromile but I am assuming that dealers don’t like anything exotic like this (yet).

Some of these companies are VC funded so might as well use some VC money to subsidize your insurance :slight_smile:

13

Metromile and similar insurers are a good suggestion, since the OP lives in a place where he may not drive a lot (in terms of miles…in terms of hours & minutes that’s another story)

The dealer has no say in the matter of which insurer you choose, all he can do is ask for proof of insurance, period.