Do I need to insure a leased car?
Insuring a leased car is a lot like insuring any other vehicle, there are just a few key differences that are worth knowing. Our guide below explains everything you’ll need to know to make sure you get the cover you need.
Is insurance included with car leasing?
Car leasing is a great way to wrap your monthly motoring costs into one fixed monthly payment, but insurance is not usually included as part of your lease. This means it’s important to factor in this additional cost when choosing your next car lease. If you’ve already chosen your perfect vehicle, you can head here to get an insurance quote.
Driving any car without insurance is illegal, and if you’re caught you’ll receive a fine and points on your licence, perhaps even a driving ban.
Sometimes you’ll find lease deals that do include insurance, with the cost of the cover being added to your monthly rental payments, however, this is uncommon and not something we offer at Autotrader, so always check your contract to be sure. Driving any car without insurance is illegal, and if you’re caught you’ll receive a fine and points on your licence, perhaps even a driving ban.
What insurance policy do I need when leasing?
Fully comprehensive cover is something your lease finance company is likely to insist on because the vehicle belongs to them for the duration of your lease. In the event of an accident or damage to the car, they want to be as fully covered as possible.
When do I need to insure a leased car?
What’s included in fully comprehensive car insurance?
• Accidental damage to your vehicle or another person's vehicle. • Personal injury to you or others involved in an accident is also covered. • The policy also covers damage to other people's property resulting from an accident. • Your personal belongings that are damaged or stolen are covered. • Repairs to your windscreen are included in the policy. You’ll also be covered if the car is written off by major damage, or in cases of fire and theft so that you can drive with peace of mind. If you do claim, you’ll only be liable to pay your agreed excess while the insurance company handles the rest of any charges.
What’s not included in fully comprehensive cover?
If you’re caught driving without an up-to-date licence you’ll be liable for any fines, especially if the car is taken by the authorities and impounded. Standard wear and tear is also not covered by insurance, but some wear is expected during a lease and the BVRLA has guidelines explaining what’s acceptable - e.g. at the end of a typical 3-year lease, you’ve been driving a vehicle for 3 years, so it’s likely to have some minor bumps and scrapes. Find out more about car leasing fair wear and tear.
How do I insure my lease car?
This is because on a personal lease (on a PCH lease contract) you’ll be the named driver, and the leasing company will be the registered owner. If you’re leasing for a business (BCH) then the insurance should be under the name of the company's director.
What about GAP insurance?
Do I need GAP insurance for a leased car?
It's not a legal requirement to have GAP insurance.
However, most lease providers will offer or inform you about GAP insurance, and some may even offer fully comprehensive car insurance and help you arrange it before delivery. It is not a legal requirement to have GAP insurance, but it’s good peace of mind to be as covered as you can to avoid any unexpected costs down the road.
You should check to see potential charges if your leased vehicle is written off. To ensure that your Gap insurance is adequate, you will need to clearly assess how much you would be charged, as some companies charge between 50% and 100% of the outstanding rentals.
Is insurance more expensive for leased cars than owned ones?
Find out more about car leasing
Looking to lease a van? Find out how insurance works when leasing a van.