As I’ve discussed in previous articles about leasing and financing your new car, once you finalize your deal you’ll be introduced to the Finance & Insurance (F&I) office. Here, you’ll complete paperwork and explore various vehicle and contract protection options.
While many products offered in the F&I office can be beneficial, their appeal varies from person to person. Beyond the financing and leasing services, these products are optional. Here are the top four F&I office products to consider if you’re leasing your next new car:
Excess Wear and Tear Insurance: This product, known by different names depending on the leasing company, protects you from paying hundreds or thousands of dollars when returning your leased vehicle. Lessees must return vehicles in the same condition they received them, minus normal wear and tear. Damage such as windshield cracks, bald tires, interior upholstery or carpet damage, parking lot scratches or dents are all chargeable. This insurance covers these costs, protecting both the leasing company and the lessee from expenses. However, be aware that many policies have exceptions (like alloy wheel protection) and are capped at certain amounts, such as $2,000 or $3,000. While the price has increased over the years, it’s included in the lease’s monthly payment and is often worth the premium.
Walkaway Insurance: Offered by Insurance Insight, this policy covers the lessee for any lease deficiency (also known as negative equity) if they have an insurable claim and can no longer afford to make lease payments. In such cases, the lessee surrenders the vehicle to the dealership, and Walkaway Insurance pays the dealer the difference between the vehicle’s wholesale value and the lease payout. Additionally, Walkaway Insurance covers the LeaseBusters registration fee if the lessee needs to exit their lease without an insurable claim. Ultimately, Walkaway Insurance provides lessees with effective options to exit their lease if needed.
Tire & Wheel Protection: This insurance policy shields the lessee from costs related to damage or loss of the tires or wheels during the lease period. It is particularly valuable as tires can easily be ruined by road hazards, often resulting in damage to the alloy rims. The policy also covers the cost of tire and wheel replacement if they are stolen or accidentally damaged. Importantly, Excess Wear & Tear Insurance usually does not cover tires and wheels at the end of the lease, making this policy even more valuable.
Theft Protection: In the past three to four years, Canadian vehicle owners have faced record-breaking car thefts. Previously, theft deterrent policies sold at dealerships were often dismissed by buyers and lessees, but today the situation has changed.
The rising demand for theft deterrent products has driven companies to develop innovative solutions to gain approval from dealership F&I offices. One common deterrent is glass etching, which makes the vehicle’s glass traceable by authorities and renders the vehicle less valuable on the black market due to the high cost of replacing all the glass.
Other methods are also used, with some companies so confident in their products they offer $5,000 to the vehicle owner/lessee to reduce the cost of their next vehicle, provided the money is used at the same dealership where the car was bought or leased. This substantial sum helps to mitigate the financial impact of having a car stolen.
In conclusion, while it’s important to consider the four products we’ve discussed, remember that these are optional purchases, and you should always stay within your budget. Becoming a CarCostCanada member can help ensure you get the best available deal on a new car, and exploring the leasing and lease-take-over inventory on LeaseBusters can assist you in understanding the monthly payment values of most vehicles on the market today.
James Matthews is the President, General Manager and Co-Founder of LeaseBusters. James launched LeaseBusters in 1990 and is considered one of Canada’s leading experts on new vehicle leases, lease-take-overs and vehicle lease (re)marketing. James can be reached directly at jmatthews at leasebusters.com
