When you lease a car in a Canadian province, you are typically required to carry car insurance to protect both yourself and the lessor. Here are some key points to keep in mind regarding car insurance for leased cars in Canadian provinces:

1. Required coverage: Most lease agreements require you to carry at least the minimum amount of liability coverage required by law in your province. This coverage typically includes third-party liability insurance, which covers damages or injuries you cause to other drivers, passengers, and property.
2. Optional coverage: You may also choose to carry additional coverage, such as collision and comprehensive insurance, to protect your leased vehicle in the event of an accident or theft.
3. Deductible: If you choose to carry collision or comprehensive insurance, you’ll need to pay a deductible in the event of a claim. The amount of the deductible is determined by the insurance company and can vary depending on the type and amount of coverage you have.
4. Who pays in case of an accident: If you have an accident while driving a leased car, the insurance policy typically covers the cost of repairs or replacement of the vehicle. However, the amount of coverage may depend on the type and amount of insurance you have, as well as the deductible you have chosen.
5. Cost: The cost of car insurance for a leased car can vary depending on a number of factors, including your driving record, the type of vehicle you’re leasing, and the type and amount of insurance you choose to carry.

Here are some example rates for car insurance on leased cars in major Canadian cities:

1. Toronto, Ontario:

• A 2019 Honda Civic lease with $1,000 deductible, $2 million liability, and $500 collision and comprehensive coverage could cost around $190 per month.
• A 2019 Toyota RAV4 lease with $1,000 deductible, $2 million liability, and $500 collision and comprehensive coverage could cost around $200 per month.

2. Vancouver, British Columbia:

• A 2020 Kia Sportage lease with $1,000 deductible, $2 million liability, and $500 collision and comprehensive coverage could cost around $160 per month.
• A 2019 Hyundai Tucson lease with $1,000 deductible, $2 million liability, and $500 collision and comprehensive coverage could cost around $180 per month.

3. Calgary, Alberta:

• A 2019 Subaru Crosstrek lease with $1,000 deductible, $2 million liability, and $500 collision and comprehensive coverage could cost around $150 per month.
• A 2020 Mazda CX-5 lease with $1,000 deductible, $2 million liability, and $500 collision and comprehensive coverage could cost around $180 per month.

4. Montreal, Quebec:

• A 2019 Honda CR-V lease with $1,000 deductible, $2 million liability, and $500 collision and comprehensive coverage could cost around $170 per month.
• A 2019 Toyota Camry lease with $1,000 deductible, $2 million liability, and $500 collision and comprehensive coverage could cost around $190 per month.

5. Halifax, Nova Scotia:

• A 2020 Nissan Rogue lease with $1,000 deductible, $2 million liability, and $500 collision and comprehensive coverage could cost around $150 per month.
• A 2019 Kia Sorento lease with $1,000 deductible, $2 million liability, and $500 collision and comprehensive coverage could cost around $170 per month.

Note that these are just example rates and your actual cost for car insurance on a leased car will depend on several factors, including your driving record, age, and location, as well as the make and model of the car, and the specific terms of your lease agreement.

Benefits of Leasing a Vehicle

There are several benefits of leasing a vehicle in Ontario, including:

1. Lower monthly payments: Leasing a vehicle typically results in lower monthly payments compared to financing a car with a loan. This is because you are only paying for the depreciation of the vehicle during the term of the lease, not the full purchase price.
2. Access to new vehicles: Leasing allows you to drive a new vehicle more frequently, as you can trade in your lease for a new one after a few years.
3. Predictable expenses: Leasing can help you budget your monthly expenses more effectively, as you know exactly what your monthly payment will be for the term of the lease.
4. Lower maintenance costs: Leased vehicles are often still under warranty, which means that you won’t have to pay for many repairs or maintenance costs during the term of the lease.
5. No need to worry about selling: When the lease is up, you simply return the vehicle to the dealer or finance company. You don’t have to worry about selling the car or finding a buyer.
6. Fewer up-front costs: When you lease a vehicle, you typically only need to pay a security deposit and first month’s payment, which can be lower compared to the down payment required when financing a car.
7. Tax benefits: In some cases, the monthly payments for a leased vehicle may be tax-deductible, depending on how you use the vehicle and your tax situation.

Cons of Leasing a Vehicle

Here are some of the cons of leasing a vehicle:

1. Higher total costs: Over the long term, leasing can be more expensive than owning a car, as you never build equity in the vehicle and continually have to make monthly payments.
2. Restrictions on use: Leased vehicles often come with restrictions on how many miles you can drive, which can be a problem if you put a lot of miles on your car. If you exceed the mileage limit, you’ll have to pay additional fees.
3. No customization: You can’t make significant modifications to a leased vehicle, as you don’t own it. You may also be responsible for paying for any damage that you cause to the vehicle while it’s in your possession.
4. No ownership: When the lease is up, you’ll have to return the vehicle and either start a new lease or purchase a new car. This can be a drawback if you’ve grown attached to the vehicle.
5. Higher insurance costs: Leased vehicles may require higher insurance coverage, as you’ll need to carry collision and comprehensive coverage to protect the car.
6. No end-of-term value: When you lease a car, you don’t get to keep any value from the vehicle when the lease is up. With ownership, you can sell your car or trade it in for a new one.
7. Early termination penalties: If you need to end your lease early, you may have to pay early termination fees.

Making an Insurance Claim When Leasing a Vehicle

If you have an accident or other covered event while leasing a vehicle in Canada, you will need to file a claim with your insurance company. Here are a few steps to help guide you through the process:

1. Report the accident: If you’re involved in an accident, it’s important to report it to the police and your insurance company as soon as possible. Make sure to exchange information with the other driver(s) involved, including their name, address, phone number, and insurance information.
2. Contact your insurance company: Notify your insurance company of the accident and provide them with the details of what happened. They will provide you with a claim number and instructions on what to do next.
3. Provide documentation: Your insurance company will likely ask for documentation such as a police report, photos of the damage to the vehicle, and any medical bills related to the accident. Make sure to keep copies of all documentation for your records.
4. Repairs: Your insurance company will either arrange for the repairs to be done, or provide you with an estimate of the cost of repairs. If you have comprehensive and collision coverage, your insurance company will typically pay for the repairs, minus your deductible.
5. Rental car: If you need a rental car while your vehicle is being repaired, your insurance company may provide you with a rental car, or offer a rental car allowance.

Remember, it’s important to read and understand your car insurance policy before you file a claim. This will help you know what is covered, what isn’t covered, and what your deductible is.

FAQs

Here are some frequently asked questions about car insurance for leased cars:

1. Do I need special insurance for a leased car? No, you don’t need special insurance for a leased car. However, most leasing companies will require you to have collision and comprehensive coverage with a specific deductible amount, as well as a certain amount of liability coverage. It’s important to check with your leasing company to see what insurance requirements they have.
2. Can I get a discount on car insurance for a leased car? Yes, you may be able to receive discounts on car insurance for a leased car, such as for having a clean driving record, installing an anti-theft device, or taking a defensive driving course. It’s also a good idea to shop around and compare rates from multiple insurance providers to ensure you’re getting the best possible price.
3. What happens if I get into an accident in a leased car? If you get into an accident in a leased car, you will need to file a claim with your insurance provider. The insurance company will then determine whether the damages are covered under your policy and will work with the leasing company to settle the claim. You may also be responsible for paying any deductibles or fees associated with the claim.
4. What happens if I total a leased car? If you total a leased car, you will need to file a claim with your insurance provider. The insurance company will then determine the value of the car and whether the damages are covered under your policy. If the car is deemed a total loss, the insurance company will pay out the value of the car to the leasing company, and you may be responsible for paying any remaining fees or penalties associated with the lease agreement.
5. Can I cancel my car insurance if I return a leased car early? If you return a leased car early, you may be able to cancel your car insurance policy or reduce your coverage. However, you should check with your insurance provider and leasing company to see what options are available and whether there are any penalties or fees associated with cancelling your policy.
6. What happens if I miss a car insurance payment on a leased car? If you miss a car insurance payment on a leased car, your insurance policy may be cancelled, and your leasing company may be notified. This can result in additional fees and penalties from both your insurance provider and the leasing company. It’s important to make sure you keep up with your insurance payments to avoid any issues.
7. Can I use my personal car insurance for a leased car? Yes, you can use your personal car insurance for a leased car, as long as it meets the minimum insurance requirements of your leasing company. However, you may want to consider purchasing additional coverage or increasing your liability limits to ensure you’re fully protected.
8. What factors affect the cost of car insurance for a leased car? The cost of car insurance for a leased car will depend on several factors, including your driving record, age, location, and the make and model of the car. It may also be affected by the terms of your lease agreement, such as the required coverage amounts and deductibles. To get the best possible rate, it’s important to shop around and compare rates from multiple insurance providers.
9. What is gap insurance, and do I need it for a leased car? Gap insurance is an additional type of coverage that can help cover the difference between the value of your car and what you owe on your lease agreement in the event of a total loss. It’s often recommended for leased cars, as the value of the car may depreciate more quickly than the amount owed on the lease. However, it’s important to check with your leasing company to see whether they require gap insurance and what options are available.
10. How do I choose the right car insurance for my leased car? To choose the right car insurance for your leased car, it’s important to consider the insurance requirements of your leasing company and any additional coverage options you may want to add. You should also shop around and compare rates from multiple insurance providers to ensure you’re getting the best possible price. It’s also a good idea to read reviews and ask for recommendations from friends and family to find a reputable insurance provider.
11. Can I change car insurance providers during my lease agreement? Yes, you can change car insurance providers during your lease agreement, as long as your new policy meets the insurance requirements of your leasing company. However, it’s important to check with your leasing company to see if there are any specific requirements for changing insurance providers and to make sure there are no fees or penalties associated with doing so.
12. What should I do if my leased car is stolen? If your leased car is stolen, you should immediately contact the police and file a report. You should also notify your leasing company and insurance provider, who will help you file a claim and determine the value of the car. If your car is recovered, it’s important to have it inspected for any damages before returning it to the leasing company.
13. What is lease gap coverage, and do I need it? Lease gap coverage is a type of insurance that can help cover the difference between the value of your car and what you owe on your lease agreement in the event of a total loss. It’s often recommended for leased cars, as the value of the car may depreciate more quickly than the amount owed on the lease. However, it’s important to check with your leasing company to see whether they require lease gap coverage and what options are available.
14. What is excess wear and tear insurance, and do I need it for my leased car? Excess wear and tear insurance is a type of coverage that can help cover the cost of excessive wear and tear on your leased car. It may include coverage for things like dents, scratches, and interior damage. Whether or not you need this type of coverage will depend on your individual driving habits and the terms of your lease agreement. Some leasing companies may require it, while others may not offer it at all.
15. What should I do if I want to terminate my lease early? If you want to terminate your lease early, you will need to check the terms of your lease agreement to see if there are any penalties or fees associated with doing so. You may also need to provide advanced notice to your leasing company and pay any outstanding fees or charges. In some cases, you may be able to transfer your lease to someone else, or negotiate a buyout with your leasing company.
16. How can I get the best car insurance rates for my leased car? To get the best car insurance rates for your leased car, it’s important to shop around and compare rates from multiple insurance providers. You should also consider the insurance requirements of your leasing company and any additional coverage options you may want to add. It’s also a good idea to read reviews and ask for recommendations from friends and family to find a reputable insurance provider.
17. How is the value of a leased car determined for insurance purposes? The value of a leased car is determined by the current market value of the car, as well as any additional factors that may affect its value, such as mileage and condition. In some cases, the leasing company may provide an estimated value for insurance purposes. It’s important to make sure you have adequate insurance coverage to protect the full value of your leased car in the event of an accident or other loss.
18. What happens if I get into an accident in a leased car? If you get into an accident in a leased car, you should immediately contact your insurance provider and the leasing company to report the incident. You may also need to file a police report and provide documentation of the accident. Your insurance provider and leasing company will work together to determine the value of the damage and the appropriate next steps, which may include repairs or a total loss settlement.
19. Can I customize my leased car, and how does this affect my insurance? In most cases, you can customize your leased car as long as the modifications are not permanent and can be removed at the end of the lease term. However, it’s important to notify your leasing company and insurance provider of any modifications, as they may affect the value of the car and your insurance coverage. Some modifications may also require additional coverage or specific types of coverage, such as liability insurance for aftermarket parts.
20. How can I make sure I’m fully protected with car insurance for my leased car? To make sure you’re fully protected with car insurance for your leased car, it’s important to review the insurance requirements of your leasing company and consider any additional coverage options that may be available. This may include gap insurance, excess wear and tear insurance, and liability insurance for aftermarket parts. You should also make sure you have adequate liability coverage and collision coverage to protect the full value of your leased car in the event of an accident or other loss.