Insurance is the only method with which one can ‘reclaim’ some of the expenses incurred in obtaining & using a car. It is adviseable to have complete car insurance even when the car is not leased but in case of leased car the owner of the asset (bank) makes it mandatory for its customers to get complete car insurance. So what does complete car insurance mean?
Complete or ‘full’ insurance as it is sometimes called covers all expenses of repair using original parts for any number of accidents but offcourse there is a catch. The amount for which the vehicle is ‘covered’ reduces due to ‘depreciation’ of car’s value.
Who determines the depreciated value you ask? The insurance companies have a ‘fixed’ 10% annual depreciation as a ‘standard. Meaning your car is assumed to be worth only 70% of its listed price by the time 4th year of lease starts.(Doesn’t matter how well it is maintained it is just all mathematical (not good commonsense but great ‘business’ sense for the insurer).
I recently had to ‘pay’ 30% value for parts repalced after an accident but still thought it was a good deal so GET IT INSURED.
PS: Some people have even started ‘conning’ the insurers by ‘staging’ fake accidents to claim more than actual but that should be the subject of another post which I’ll write some other time.