Does car leasing include insurance?

If you are planning to lease a car, you may be wondering if insurance is included in the car lease. Perhaps you are also asking yourself if it is expensive to insure a leased car in the UK. This Carwow guide to car leasing and insurance will put you in the picture.

Does car leasing include insurance?

No, car leasing does not include insurance. At least that’s true of most UK car leasing deals. There are some car leasing packages that do include insurance cover.

Insured leases will cost more than an uninsured lease but you’ll enjoy the convenience of having the lease and insurance premium bundled together in one monthly payment.

What insurance policy do I need for a lease car?

In almost all cases you will need a fully comprehensive policy. If you owned the car you could opt for third party, or third party, fire and theft policies, but the lease company is very unlikely to be satisfied with this level of cover. The chances are the insurer will insist on a fully comprehensive policy.

You will also need to consider how you will be using the car. On a personal lease, cover for social, domestic, and pleasure may be enough. If you drive the car to and from work, then the policy will need to cover social, domestic, and pleasure including commuting. If you use the car while at work – for example, to visit clients – then the policy will need to include business use.

What does fully comprehensive car insurance cover?

Fully comprehensive insurance covers most eventualities. Here’s what’s usually included:

• Accidental damage to the car (or someone else’s).
• Personal injury to the policy holder and others involved in a collision.
• Damage to other people’s property.
• Damage to or loss of your own property.
• Damage caused by fire.
• Theft of the vehicle.
• Repairs to your windscreen.
• Replacement car keys.

What does fully comprehensive car insurance not cover?

Although fully comp insurance is very thorough, not every conceivable claim is covered. There will be some things that are not included, such as:

• Driving other cars regularly.
• Medical costs if injured driving another car or vehicle.

The best way to be sure of what’s included and excluded from any given policy is to check the wording carefully. It’s not a very interesting way to spend your time but fully comprehensive insurance is not identical from one insurer to another – there will be some differences.

Do I need GAP insurance on a lease?

It’s not a necessity, but GAP insurance on a lease is worth considering.

GAP stands for Guaranteed Asset Protection. If your lease car is stolen or written off and you don’t have GAP insurance, the insurer will only pay out the market value of the car. You will still have to pay the leasing company based on the terms of your contract. If the payout from your car insurance falls short of what the leasing company requires then you will need to cover the difference yourself, leaving you out of pocket.

By taking out GAP insurance, you’ll be covered in this eventuality. So, GAP insurance can offer lease car drivers added peace of mind.

How to insure a leased car?

When arranging insurance cover, you will need to inform the insurer that you are leasing the vehicle rather than owning it. Otherwise, the process for insuring the car is much the same as it would be if you were insuring a privately owned vehicle.

It makes sense to obtain quotes from several insurance companies, as annual premiums can vary considerably. Price comparison sites are the easiest way to do this quickly – just remember that some insurers are not on these websites.

As we’ve explained, most leasing companies will insist on fully comprehensive insurance. That’s generally the best option anyway.

Compare the level of cover, not just the annual price, and choose the policy which offers the best value for money – that’s not necessarily the cheapest.

Expect to send the leasing company proof of insurance cover so it’s on record that the car is properly insured.

Car lease and insurance FAQs

Is it more expensive to insure a leased car?

No, it’s not usually more expensive. There are many factors which influence the cost of cover, with the car, your driving record, and where you live being far more important than whether the car is owned or leased.

Can other people drive my lease car?

If someone is added as a named driver to the insurance policy, then they can drive your lease car. Alternatively, you could arrange short-term insurance for someone to drive the car as a one-off.

Do all insurance companies cover leased cars?

Almost all do. The only real difference to insuring a lease car and a privately owned car is the name on the registration documentation, so there’s no reason for the insurance company to turn down the business.

Car change? Carwow!

Looking for a new set of wheels? With Carwow you can sell your car quickly and for a fair price – as well as find great offers on your next one. Whether you’re looking to buy a car brand new, are after something used or you want to explore car leasing options, Carwow is your one stop shop for new car deals.

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