Guide to Car Leasing Insurance
Whether you lease, rent or own a vehicle, you must have the appropriate insurance in place to use your vehicle on UK roads. This guide breaks down everything you will need to know about securing insurance for your vehicle, the different types and what is included.
Do I Need Car Insurance for My Leased Car?
The simple answer is yes. It’s a legal requirement for anyone who leases a car to have valid insurance in place before the vehicle is driven. If you have an existing insurance policy in place you should check whether if it can be transferred to your new vehicle. Alternatively, you will need to source a new insurance policy. It’s worth checking out different providers within the market and utilising comparison sites. At Leasing Options, we have our own insured-vehicle product, Fuel & Go, so please speak to one of our account managers who will be provide you with further information.
How Do I Insure A Leased Car?
To insure a lease car, it’s important to note that most leasing companies require you to have fully comprehensive insurance.
You can use price-comparison sites and individual insurer’s websites to gain various quotes. Simply answer all the questions – honestly and accurately – on the quote forms to receive a quote. Compare the quotes and select the best option for you, that is within your budget.
For a simple solution, check out our Insured Leasing package – Fuel & Go. Fuel & Go is a unique way you can bring together all aspects of leasing a car into one easy to manage payment. It covers the lease of the vehicle, the road tax, maintenance and breakdown cover.
To find out more, get in touch with our team here
What Kind of Car Insurance Do I Need for A Leased Car?
When getting insurance for a leased car – most companies require you to have fully comprehensive insurance.
What Is Covered in Car Leasing Insurance?
It is a legal requirement for all vehicles on UK roads to be insured. This protects other road users, as well as you and your passengers. Various levels of cover and add-ons are available but when leasing a vehicle, at a minimum, you must take out fully comprehensive insurance.
Insurers offer a wide range of extras, which can be added to the cost of your policy, such as courtesy car-cover, possessions, personal injury, legal costs and roadside assistance. Whilst these extras come with an additional cost, you may find that they add peace of mind – particularly if you spend a lot of time out on the road.
Fully comprehensive offers the highest level of protection and means that you and other drivers are covered for injury compensation, as well as damage, fire and theft of both the vehicles, whether the accident is your fault or not.
This type of protection covers the cost of damages to others, but not yourself. Legally, all drivers have to have this level of cover as a minimum.
Third party, fire and theft
Third party, fire and theft means everything from a standard third-party policy, and it also protects you for fire damage and/or the theft of your vehicle.
(Fire damage includes both deliberate acts like arson, as well as accidental fires.)
Does My Lease Contract Include Car Insurance?
Not all lease companies offer the facility to lease an insured car. At Leasing Options, we offer Fuel & Go.
The vehicle is insured, meaning that you do not need to take out an insurance policy. The key benefits of the package include:
- Everything in one fixed payment
- Insured Lease Vehicle
- Third Party Liability
- Cover for Family/Spouse
- Write Off Shortfall Protection
- Glass Cover
- 48 Hour Total Loss Process
- Replacement Vehicle
- Recovery Service
- MID Updates
What Is Guaranteed Asset Protection (GAP) Insurance?
Guaranteed Asset Protection (GAP) Insurance is an optional car insurance product that helps pay off a finance agreement if your car is written-off in a car incident or stolen and you owe more than the car's depreciated value.
Gap insurance covers the difference between the amount you paid for your car and the amount an insurance company would give you if it was written off or stolen.
Find out more on GAP insurance in our guide here
How to Reduce the Cost of Insurance on A Lease Car?
There are a number of ways to reduce the cost of insuring a lease car.
Lower Insurance Groups
Cars are banded into insurance groups – premium/prestige cars are often in the more expensive insurance bracket versus the smaller, more economical cars, which are in the cheaper insurance groups. By choosing a car in a lower insurance group it will mean your premiums and insurance are cheaper.
Check vehicle value
Before purchasing any insurance policy, you should check online for cheaper options but also speak to the provider directly in case they are able to offer exclusive deals. Don’t just rely on insurance comparison sites.
If a more experienced driver will use your lease car, by adding them as a named main driver, it can reduce the cost. However, it is important to know that ‘fronting’ (when someone lists themselves as the main driver on a car that is actually used by someone at a different address), can invalidate your insurance and also cost you a significant fine and points on your license.
No Claims Bonus
Young drivers may be able to reduce the cost of their insurance policy by having a black box fitted to the car. This is a device that monitors how and when you drive the car, allowing the insurer to keep an eye on how safely you drive. If you drive safely, you can expect to benefit from a reduced premium when the time comes to renew. Before installing a black box, you should check with your Leasing Options Account Manager to find out whether you are allowed to do so under the terms of your lease agreement.
If you are able to pay for your insurance annually rather than monthly as you can often benefit from a discount by doing so.
Your insurance might cost less if you keep your leased vehicle on a secure drive or garage overnight.
What Happens If My Lease Car Is in An Accident?
If you are involved in an accident in your lease car, you should follow these simple steps:
Make sure you are safe
Firstly, you need to make sure you are safe and away from any immediate danger.
Notify your leasing company
You should notify your leasing company and insurer as soon as possible.
Car will be assessed
The car will need to be assessed to understand the scale of damage so your car leasing company will arrange this.
Costs to be agreed
Based on the outcome of the assessment of damage, it will then need to be agreed what costs will be covered by your car insurance.
If the car can be repaid, arrangements will be made for the car to be collected and repaired.
If your car is a ‘write off’ you will be issued a settlement figure that you need to pay.
IMPORTANT: Our teams are not able to discuss insurance requirements with you. If you have any questions or concerns regarding your cover, you should contact your preferred insurance provider in the first instance.