If you're new to leasing & want to learn about the process, Leasing Options' comprehensive guide has everything you need to know about first-time car leasing
Guide to car leasing insurance
All leased cars must be covered by a fully comprehensive insurance policy. But is this included in your car lease agreement?
Standard car leasing deals do not come with insurance cover. However, you have the option to choose an insured leasing package to take the hassle out of organising it.
Below, we cover everything you need to know about car leasing with insurance and what's covered in your contract.
Does my car lease include insurance?
Not all lease companies offer the facility to lease an insured car. This means you must arrange a policy separately to cover the vehicle. Leased cars must be covered by a fully comprehensive policy as this provides a complete level of protection should anything go wrong.
There is also the option to take out an insured leasing deal. At Leasing Options, we offer Fuel & Go which means you don't have to take out a separate policy – everything is included in your package.
Car leasing with insurance
Opting for a car lease with insurance removes the hassle of arranging cover for your leased vehicle. This handy package includes fully comprehensive cover and a range of benefits that offer great value for money.
At Leasing Options, our Fuel & Go package provides a unique leasing solution that fully protects your car and includes maintenance, breakdown cover and a range of other extras.
Below, we delve into everything you need to know about car leasing with insurance.
Can I lease an insured car?
Yes, leasing an insured car is simple as packages like Fuel & Go include fully comprehensive cover within your lease contract.
How does insurance work with a leased car?
When you take out a car lease with insurance, insurance is organised for you to start at the beginning of your lease period. This package covers both personal and business travel. So, there are no restrictions to the type of journeys you take.
Below offers an overview of what you get with a standard lease compared to an insured lease car.
|Standard lease||Fuel & Go|
|Fully comprehensive cover|
|Cover for family/spouse|
Who is eligible for insured leasing?
If you're interested in car leasing with insurance, you'll need to meet the eligibility criteria.
For example, Fuel & Go drivers must meet the below factors:
- Hold a full UK/EU Driving Licence for at least one year
- Drivers must be between the ages of 21 and 70
- Drivers must have no medical conditions, for which the DVLA has advised you to stop driving
- No more than six points on your licence in the last five years
- Have no more than two fault claims in the previous 24 months
- Drivers must not have been banned from driving within the last five years
- Have no insurance claims refused
Benefits of car leasing with insurance
Choosing an insured leased car comes with numerous benefits. These include:
Fixed costs leasing
Car leases with insurance provide a fixed cost for your vehicle. Plus, with Fuel & Go, maintenance is also included, so you have one payment that includes everything.
Additional family cover
Insured leasing deals cover other family members and your spouse – all within the cost.
Maintenance and servicing
An insured lease car agreement covers all servicing and maintenance intervals. So you don’t have to worry about unexpected repair bills.
Find out about lease car maintenance in our Leasing Options comprehensive guide.
What's covered with insured leasing?
Insured leasing protects your vehicle in several ways. As this policy is fully comprehensive, it covers the following:
- Accidental damage
- Third-party cover
- Breakdown cover
- Maintenance support
- Shortfall protection
- Glass protection
However, the Fuel & Go insured car lease option currently doesn't cover personal injury for the named driver. The insurance policy would cover passengers under 'third party'. The Fuel & Go insurance also doesn't protect your personal belongings.
What level of insurance is offered with the leasing with an insurance package?
The only insurance cover offered with insured leasing packages is fully comprehensive. This is slightly more expensive than other policies such as third-party, fire and theft. But you have higher protection for your leased vehicle in case of an accident, theft or damage.
Who is covered by the leasing insurance policy?
The named driver is covered by the insurance policy on an insured leased car contract. However, you also have the benefit of family cover. This means immediate family members and your spouse are covered to drive your lease vehicle.
Is it cheaper to take out an insured car lease?
The cost of choosing a car lease with insurance varies depending on a number of factors such as car model, annual mileage and personal driving history.
Weighing up the pros and cons for each option – either with or without insurance will give you a clearer idea of the cost differences.
However, it's also worth noting assessing value for money over lower costs can help you get the best deals with everything included.
Find car leasing with insurance deals
Looking for the best deals on cars with insurance? Browse our selection of insured leasing options with our Fuel & Go package.
Car leasing insurance
Whatever lease car you choose must be covered by fully comprehensive insurance.
You have a choice of taking out a standard lease where you need to arrange this separately. Alternatively, opting for an insured lease package includes the policy within your monthly payments.
Protecting your leased vehicle is essential, as accidents can happen. Plus, you'll need cover for damage and theft. The reason why fully comprehensive cover is required is that this type of policy offers complete protection compared to other options.
Do I need insurance for a lease 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. So, if you have an existing insurance policy in place, you should check whether it can be transferred to your new car.
Alternatively, you will need to source a new insurance policy. Again, 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 provide you with further information.
How does insurance work when leasing a car?
Insurance works in a similar way whether you choose a standard lease or an insured lease.
If you opt for an insured lease package, the costs will be added to your monthly payments. There are also specific criteria to meet to be eligible for this package.
In comparison, arranging your own insurance means a separate amount debited from your bank account each month. With this option, you also have the choice to pay in full for a year's cover. There is more flexibility with this cover as you may have a wider selection of insurers to choose from.
Eligible for personal leasing finance?
If you're thinking about contract or personal car leasing, it's important to check your eligibility for personal leasing finance. Our tool can determine if you're eligible before the finance company performs a credit check on you.Check your eligibility
How do I take out car leasing insurance?
To insure a leased 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 insurers' websites to gain various quotes. Simply answer all the questions – honestly and accurately – on the quote forms to receive a quote. Then, compare the quotes and select the best option within your budget.
For a simple solution, check out our Insured Leasing package – Fuel & Go. Fuel & Go is a unique way to combine 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.
When should I take out insurance?
Your insurance policy must start on the day your leased car is delivered to you. This ensures you are covered straight away.
If you choose an insured lease package, this will be arranged for you to begin when the car arrives.
What type of insurance do I need?
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 fees 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 on the road.
The types of insurance available include:
Fully comprehensive offers the highest level of protection. It means that you and other drivers are covered for injury compensation, as well as damage, fire and theft of both vehicles, whether the accident is your fault or not.
Third-party, fire and theft
Third-party fire and theft mean everything from a standard third-party policy, and it also protects you for fire damage and/or vehicle theft.
(Fire damage includes both deliberate acts like arson as well as accidental fires.)
This type of protection covers the cost of damages to others, but not yourself. Legally, all drivers must have this level of cover as a minimum.
Who is named on a lease car insurance policy?
The sole driver of the vehicle is named on the lease policy. You can also add named drivers, but this will affect the premium depending on the level of driving experience and history.
In an insured lease car agreement, family and spouse and automatically included in the policy.
How much is insurance on a lease car?
There's no fixed example of how much it costs to insure a lease vehicle because policies are decided on individual factors. But it's a common misconception that insuring a leased vehicle costs more than owning it outright.
When researching insurance deals, comparison websites offer a broad insight into premium costs. The amount considers factors such as car model, driving record, credit rating and the type of policy.
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 in the cheaper insurance groups. Choosing a vehicle in a lower insurance group will mean your premiums and insurance are cheaper.
Check the vehicle value
Before purchasing any insurance policy, you should check online for cheaper options and speak to the provider directly in case they can offer exclusive deals. Don't just rely on insurance comparison sites.
If a more experienced driver uses your lease car, adding them as a named main driver can reduce the cost. However, it is essential to know that 'fronting' (when someone lists themselves as the main driver on a car that someone at a different address actually uses) can invalidate your insurance and also cost you a significant fine and points on your licence.
Young drivers may be able to reduce the cost of their insurance policy by having a black box fitted to the car. This device monitors how and when you drive the vehicle, 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 renewing. However, 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.
You can often benefit from a discount if you pay for your insurance annually rather than monthly.
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, there are a few steps to take:
Make sure you are safe
Firstly, you must ensure you are safe and away from immediate danger.
Notify your leasing company
You should notify your leasing company and insurer as soon as possible.
The 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 damage assessment, it will then need to be agreed on what costs will be covered by your car insurance.
If the car can be repaid, arrangements will be made to collect and repair the vehicle.
If your car is a 'write-off,' you will be issued a settlement figure that you need to pay.
What is GAP insurance?
Guaranteed Asset Protection (GAP) insurance is another type of cover which provides you with extra protection. Quite fittingly, it covers the 'gap' between what insurers normally pay out for your car and how much you actually paid.
To put this into context, most insurers use your car's market value when calculating a payout for total loss claims. Because cars depreciate in value over time, that amount could be significantly less than what you paid (or what you're paying for a lease). That's especially true given that most lease cars are new, and new cars depreciate the quickest.
So, with normal comprehensive insurance, you would be left short of the amount you paid if your car is stolen or written off. That would leave you unable to replace the car with a similar model. Even worse, it could leave struggling to make the monthly payments if you've taken out an ongoing agreement like finance or a lease.
Back to GAP insurance, this would cover the difference in cost between your initial valuation of the vehicle and the current market value – so your asset's value is guaranteed, as the name suggests.