2 reasons why you should pay for the insurance of a leased vehicle (LOA)
Are you wondering why the owner of the vehicle you have leased forces you to insure the vehicle yourself? If so, then read the article here to get a better understanding of why it is your responsibility to do the insurance for the vehicle you have leased if leased.
Explanation of the leasing contract
Certainly, according to the contract, the lessee can exercise the option to purchase only at the end of the lease period, but this does not exempt him from the obligation to carry out the insurance of his vehicle. You must understand that when you sign the contract, during the whole period of validity of the contract, the vehicle belongs to you. This is why your name is written on the vehicle registration document for the entire period of validity. This obliges you to take responsibility for the vehicle. The one who lent you the vehicle becomes by law the financial institution that grants the LOA contract and must therefore also face these responsibilities.
Recommended insurance contracts for these vehicles
When you end up with a vehicle under a leasing contract, it is always best to comply with the various recommended insurance policies. Generally, there are three types. Firstly, it is highly recommended that you take out third-party insurance. In fact, all vehicles must be covered by this insurance, whether or not they are under a leasing contract. Secondly, in addition to third-party liability insurance, the hirer must take out additional insurance known as comprehensive insurance. Thirdly, it is always better to take out a "buy-back value" or "total loss" guarantee which corresponds to a "replacement value" guarantee. For advice, it is always better to ask your financial institution for advice. This makes it easier for you.