For many Canadians having a vehicle in the household is more than just a necessity. It provides the freedom that none of the other means of transportation can offer nowadays. Depending on the budget and a number of personal circumstances, one can either lease, finance, or purchase the vehicle outright. Though, regardless of how you decide to go with the purchase, you must have car insurance at all times across the country. Choosing to lease or finance the vehicle likely won’t have any impact on your premium, but the types of coverage may differ depending on the situation:
- Third-Party Liability: protects you in case you are held legally responsible for injuries and / or damages to one’s property in case of an accident
- Accident Benefit Coverage: plays an important role in helping you recover after an accident as it might cover the costs of rehabilitation or provide for the loss of income
- Uninsured Motorist Coverage: protects you and your vehicle in case you are involved in a collision caused by an uninsured driver
- Collision Coverage: covers the costs associated with repairing or replacing your vehicle in case of an accident
- Comprehensive Coverage: covers a vast range of damages that are not caused by collision including fire and theft of the vehicle
- Additional Optional Coverages: might include rental vehicle costs, roadside assistance and other
It is important to note that if you own the vehicle, you are not legally required to have comprehensive and collision coverage; however, on a leased / financed vehicle it is unquestionably mandatory since the lessor / lienholder needs to make sure that the vehicle is protected at all times.
Further, even though leasing or financing the vehicle might not affect the cost of insurance itself, it could have an impact on how the claims are handled and paid out. Even if the vehicle is written-off, you will still be required to make regular car payments up until the moment your leasing / financing company receives a settlement cheque – an open claim does not mean that the contract is void.
Car insurance is not just security for the vehicle, it is vital protection for the health and financial liability of you, your family, your passengers, and other drivers. At Capital Trust Financial we put the safety of our customers as a top priority and are always here to help and resolve any car-related issues. Whether you are shopping for a new ride or decided to review your existing policy and came up with certain questions, reach out to our Customer Service Team at Capital Trust Financial, we will be happy to assist you with any concerns you have.