LeaseCar Insurance

What is lease car insurance?

Lease car insurance is the type of cover you need when you're using a vehicle under a lease agreement. You’re the one responsible for insuring a car from the moment it's delivered to you.

Most car insurance policies protect not only other people and their property, but also the car you drive, including in cases where you’re at fault for a collision or if the vehicle is stolen or written off. Leased car insurance typically functions the same way as standard policies in terms of how premiums are calculated and how claims are handled.

Do I need lease car insurance?

Yes, you need car insurance whenever you’re driving or keeping a vehicle on UK roads, and this includes leased cars. Most leasing companies will require you to have a policy in place before you take delivery of the vehicle. If you don’t have the right insurance, you could break your lease and be responsible for repair or replacement costs.

Insurance for a leased car is generally not included in the lease agreement, so it's your responsibility to arrange it. You can usually use a standard car insurance policy, but it's important to inform the insurer that the vehicle is leased to ensure your cover is valid.

Is it more expensive to insure a lease car in the UK?

Insuring a leased car is not necessarily more expensive than insuring a vehicle you own. The cost mainly depends on factors like the value of the car, the type of car, whether it’s a new car, and your personal driving history.

Because leased cars are often newer or higher-value vehicles, the premiums can sometimes be higher than for older, lower-value cars. However, this is not a direct result of the car being leased. It’s largely due to the vehicle’s characteristics and the insurer’s assessment of risk.

How much does car insurance cost for leased cars?

For most customers with a lease agreement or lease contract, the total cost of comprehensive insurance coverage is £643 on average. While this gives a general idea, your exact premium will vary depending on the extras you choose, how many drivers are added, and how the car is used.

Does a lease car come with insurance included??

In most cases, no. This means you’ll need to take the insurance policy out yourself before driving the vehicle. Some dealerships or lease providers offer optional insurance as part of a package, but it’s usually more expensive than arranging your own policy.

How long does a lease car insurance last?

The duration of lease insurance aligns with standard insurance policies, which are typically valid for one year. You must have a policy in place so that you are legally covered from the start.

Annual cover is the standard, but insurers may offer short-term policies, especially if you’re only leasing for a few months. If you end a policy early, you might incur an administration or cancellation fee. Similarly, if you switch to a new leased car, many insurers allow you to transfer your existing coverage.

In any case, having continuous insurance in place throughout the lease period is crucial, not only to comply with the law but also to protect you from financial liability for any damage or loss to the vehicle.

What details do I need to provide to get a car insurance quote?

When arranging car insurance for a leased vehicle, it only take a few minutes to get a quote, and basic details help you get an accurate price:

• Age
• Occupation
• Home address & where the car is parked overnight
• Car usage (social, commuting, business)
• Estimated annual mileage
• Driving licence number
• Car registration number
• Purchase date of the car
• Vehicle modifications
• Your No Claims Discount
• Accident/claims history (last 5 years)
• Convictions or penalties (last 5 years)
• Additional drivers

FAQ

Can I insure a leased car in someone else’s name?

Yes, but it depends on who the registered owner of the car is. For personal leases, the policyholder is usually the person taking out the lease, while business leases require the insurance to be in the company or director’s name. You may be added as a named driver, but the policy needs to reflect the correct ownership to be valid.

What happens if my leased car is written off?

If your leased car is declared a total loss after being involved in an accident, your insurer will pay out the market value of the vehicle. The car may still be owed to the lease company, so the payment goes directly to them.

You should make a claim as soon as possible following an accident to ensure the lease company receives the settlement. GAP insurance (guaranteed asset protection) can cover any shortfall between the payout and remaining lease payments.

Do I need business car insurance for a leased vehicle?

Yes, if you’re using the car for business purposes. A business car policy is required when your car is part of a business lease or business contract hire agreement, or if it’s a company car. You can’t use a personal policy as it would invalidate your cover.

Is short-term insurance available for leased cars?

It can be, but it depends on your terms and conditions and the specific lease agreement. Some insurers offer short-term policies for leased vehicles, but these are less common than standard annual cover.

Is self-employed business insurance relevant for me if I work from home?

Even if you work from home, it can still be useful. Even though your car may spend most of its time parked at your house, the insurance covers any business-related journeys and protects against damage that could happen on the road. It provides cover for both you and your work-related activities in case of an accident.

Can I add a learner driver to leased car insurance?

Yes, it's possible when getting insurance for a leased car. The learner driver must be added as a named driver and meet any insurer requirements, such as age or provisional licence restrictions.

What's the difference between insuring a leased car and a financed car?

A leased car is covered under a lease agreement, whereas a car bought via personal contract purchase or other finance means is owned by you, even if the finance company uses the vehicle as collateral against a loan. Insurance rules differ: leased cars tend to require fully comprehensive cover.

Can I transfer my no-claims bonus to a leased car policy?

Yes, if you already have an NCB, it can usually be applied when you insure a vehicle under a car leasing agreement. This can help reduce premiums on your lease car insurance.

Do lease cars come with black box (telematics) insurance?

Not automatically. Some leases offer insurance means that include telematics or black box policies, but in most cases, you arrange insurance yourself. Telematics devices track driving behaviour and can lower your premiums if you're a safe driver.