Car Lease Insurance: What You Need To Know

When you lease a car, the car lease insurance is not included with the leasing deal automatically and should be arranged separately, especially with long-term leases. Before you drive the car, you should make sure you have suitable comprehensive cover so the leased vehicle is covered for the whole term. 

Most leased vehicles are funded through a finance agreement and are subject to the terms and conditions of the leasing contract. 

The right car lease insurance for you on a car you don’t own should reflect the annual car leasing mileage limits you expect, where you will keep it during the day and overnight, and how often you’ll use the vehicle for business or pleasure. 

Is insurance included in a car lease? 

Like most vehicle rental companies, Leasys does not include the cost of insurance in the leasing agreement, and the monthly rental price is separate from the insurance. Find out about the different types of leasing.

You choose the vehicle you want from our range, agree the lease and the vehicle leasing terms, and arrange suitable insurance before driving away. You need to check your insurance status early as the car should be properly insured before handover. 

The main thing to remember is that the policy you take out should reflect the real use of the vehicle. A private driver might only need it for social activities and commuting, but a mobile tradesperson will need it insured for work use. If anything changes while you are leasing the car, be sure to update your insurance policy. 

Many insurers offer policies that combine social, domestic and pleasure use with business use. When you take out your insurance, make sure to note that you are not the legal owner, have the correct registration entered, and that you add any named drivers.

What type of policy do I need for a leased car?

To lease a vehicle through Leasys, we require comprehensive cover to offer broad protection. Policies that are only third party, or just for fire and theft, are not permitted to ensure the vehicle is properly covered. A good insurance policy will cover everything from repairs after an accident, to accidental damage, and theft. 

The right type of policy for you will depend on the driver and the purpose of use. If you will only use the vehicle on weekdays, then make sure to inform the insurance provider. You’ll need to give personal details about driving history and convictions, any previous claims, annual expected mileage, and many more factors which can affect the price of the insurance. 

A finance company will expect high-quality repairs by the insurer if you’re returning the car after an incident, and charges may be incurred if there is damage after inspection. 

What can affect the cost of car lease insurance?

The cost of insurance varies according to several main factors, including the value of the car, driver history, location, type of car, and the driver’s claim history. If you choose a new electric car model for business use, the price of insurance will differ from a small hatchback you only use for personal use. 

The total cost of insurance will depend on how you choose to pay and if you include any extras. Protection is not included in the Leasys monthly figures, and it can be cheaper if you pay annually rather than monthly. Before signing any finance documents, you should factor in the insurance to the monthly costs of leasing the vehicle. 

It’s easy to get a quote by entering the exact model of the lease vehicle, and we can provide the registration if that vehicle is available. 

How to handle accidents, damage, and claims on leased vehicles

If you have an accident in a leased vehicle, contact your insurer as soon as possible and notify Leasys. The vehicle damage will be assessed, and both sides should be kept informed, especially when it comes to finance arrangements on leased vehicles.

Charges can be added by Leasys if the car has suffered substantial damage and not been repaired properly by the insurer, so we will always work with you to resolve the issue as efficiently as possible. Read our guides on vehicle terms for more information. 

Should I consider GAP cover?

Guaranteed Asset Protection (GAP) cover is sometimes a good option as a settlement from the insurer might not clear the outstanding finance balance on the leased vehicle. After the damage has been assessed, you will be informed of your excess and where you can arrange the work to be carried out. 

GAP cover is an additional option, but it can help bridge the difference when there has been the total loss of the vehicle. GAP insurance is optional and may be worth considering depending on your circumstances. 

It gives an added peace of mind and can save you money in the long-run should anything happen with you driving the car. 

The best option for your UK insurance policy is to choose the type of contract that suits your personal situation. The right kind of car lease insurance will support all parties involved while your car is being leased. 

Discover more about the benefits, eligibility and process of our Business Leasing option or our Personal Leasing option.

FAQs

Is insurance cover included in the lease price?

No, we do not include insurance, and it needs to be arranged separately by the customer. You will need fully comprehensive car insurance to make sure it is fully insured before you drive it. 

Is leasing insurance different from buying insurance?

Even though the insurance policies might look similar, when you’re buying a car, the insurance is for your own asset. The insurance itself is similar, but you will need to declare that the vehicle is leased and that you are not the registered owner. 

Will leasing increase my insurance price?

Insurers mainly consider the driver, the type of car, the usage, and the claim record rather than whether or not you own the vehicle. You can always check for a suitable quote for the car you want to lease from us in advance to know the costs. 

What if the leased car is written off?

In the unfortunate event that your leased car is written off, you should inform the team here at Leasys and the insurer too. Your insurer will assess the claim in line with the policy you chose, so be sure to keep all of the paperwork. 

Do UK business users need special cover for leased vehicles?

Some standard policies may not cover a vehicle used primarily for business use. If you regularly travel to client meetings, sales visits, or travel between sites, let your insurer know which is the right kind of insurance you require in the UK. Claims should be made with all of the correct information for the driver and the vehicle. 

Who arranges insurance on a leased car?

With most lease agreements, it is the customer's responsibility to arrange and maintain fully comprehensive insurance for the duration of the contract. Insurance must usually be in place before the vehicle is delivered.