Car Loans and Insurance - Essay Example

The paper "Car Loans and Insurance" is a worthy example of a business essay. The advantages of leasing a car include lower monthly payments with no or low down payments. The client also experiences no depreciation concerns since the car is owned by the bank or financial institution. The cons of leasing a vehicle are that it attracts huge monthly premiums and miles dictated by the bank or financial institution. The advantages of purchasing a car include the eventual ownership of the vehicle once the payments are complete. The client has the authority to customize the vehicle and modify accessories and never worry about the mileage. The disadvantages of purchasing a car include higher monthly installments, and the client has to consider the depreciation and repair costs than when buying a car. Deciding between purchasing and leasing an automobile would depend on the intended usage and the prevailing financial status (Delbridge, 2015). 

Lease companies in Hawaii require that lease buyers acquire gap insurance on their automobiles. The insurance provider issues the total amount relating to the value of the leased vehicle at the time of the total loss in case of a comprehensive or the collision coverage. Where the car has been purchased, the owner can acquire a lower rate of insurance cover from an insurance provider of choice. Mostly, the lease insurance premiums in Hawaii are higher than those of a purchased vehicle. The difference occurs due to the requirements placed by the leasing organization (Carlozo, 2015).
Other variables that affect the insurance premiums include the car model with some regarded as safer than others by the insurance companies. The other factor is the client’s driving record and credit history. A driver likely to cause more accidents and has a poor credit rating is required to pay higher premiums. The age and marital status are also considered by most, but not all insurance companies when determining the premium rates. To ensure lower premiums, one should maintain a clean record, take a defensive driving course, improve the credit rating, and ensure there is no unnecessary coverage (Carlozo, 2015). Read More