So, you’ve decided to lease a car and you need to start thinking about insurance. It can be one of the big expenses when driving, so it’s important that you have the right information.
One of the most common questions when it comes to lease cars and insurance has to be “Is insurance provided with my lease car?”.
Before we go further, we should say that we aren’t insurance experts. However, we know enough to give you the information you need.
So we’ve written an article explaining whether insurance is covered on a lease, what affects lease price, and what you can do to lower the price.
Is insurance provided when I get a lease car?
Unfortunately, the answer to this question is a definite no.
When you lease a car, paying for insurance is your responsibility. If you find a lease contract has insurance included in it, you have found that 1%. 99% of the time, you won’t find a lease contract that does. All this means is that you’ll have to get the insurance yourself.
There are some brokers that have relationships with insurance companies so you can insure your car through them. The biggest benefit to this is that if you go through a reputable broker you can be reassured the insurance company is reputable.
However, just because they are reputable doesn’t mean they are going to get you the best deal. Therefore, although you are saving hassle, you might not be saving money.
If your car broker says they do handle insurance, make sure you see confirmation of FCA compliance. This is because a majority of vehicle brokers will not have the necessary training or accreditations to handle your insurance effectively. If they can confirm their FCA compliance, then you can feel assured that they are qualified to talk about insurance.
Ultimately though, it’s up to you to organise your vehicle insurance.
It should be noted here that insurance can be pricey, and the price can differ greatly depending on the insurance company you are talking to and the policy you are looking at.
Therefore it’s vital that you take the cost of the insurance into consideration before you agree to anything. This is due to the fact that the cost of the insurance could take your monthly payments up and over the budget you have set for yourself.
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What affects the price of insurance?
There are a number of things that can affect the price of insurance. These include:
- How old you are
- What type of car you have
- Your location
- How much experience you have had driving
- Any criminal convictions
- Any driving convictions
- If you have any penalty points on your licence
- If you have any extra qualifications – for example, the Pass Plus scheme
As you can see, there is a lot more to the cost of insurance than just the car you’re driving.
Does leasing affect insurance?
When you have a lease car it is necessary to get fully-comprehensive insurance as you don’t own the car and the financial interest in the vehicle doesn’t lie with you (it’s with the Finance House). This will, therefore have an impact on the price you pay for your insurance policy.
Naturally, a fully-comprehensive insurance policy (you will often hear it referred to as fully-comp) is more expensive than one that is third party-only or third party, fire and theft.
Fully-comprehensive insurance is exactly what it says on the tin. It’s one of the highest forms of insurance you can get for your car and covers pretty much everything.
Third party-only or third party, fire and theft policies only cover the damage you have done to other people’s cars. Any damage to your own car in the process of an accident/incident is your financial responsibility to repair.
With every lease contract (whether Personal or Business, Contract Hire or Operating Lease) you are required to get fully comprehensive insurance. This requirement will be stipulated in any contract from your Finance House.
How much does it cost to insure a lease car?
Honestly, we can’t give you a cost here. Every policy is different and depends on multiple qualifying factors including your driving history and the car you have leased.
How can I reduce the price of insurance for my lease car?
Truthfully, the only way to reduce the cost of your insurance premium is to lease a lower-priced car.
The smaller the investment the insurer has to cover, the less you will have to pay to make up the difference should you make a claim.
Looking for a new vehicle? Don’t forget to ask us about insurance when you call.
Can someone else be insured to drive my lease car?
Yes, they can.
It’s quite a common myth that you can be the only one to drive your lease car. But this isn’t the case. In fact, insuring someone else to drive your lease car is pretty straightforward.
The first thing you have to do is make sure you trust them.
We’re aware it sounds silly, but before you let your son/daughter/best friend/partner sit behind the wheel of your prize Jaguar you need to be sure that you can trust them to drive safely in your car.
Once you are reassured that you can trust this prospective driver, just let the insurance company know that you want to add them to your insurance policy. The insurance company will calculate the new cost of the insurance. Once you’ve paid the additional cost, the new driver will be good to go.
It’s not essential to let the Finance House know, but if you’re unsure, we would recommend you contact them and inform them of the amendment to your insurance policy.
What should I look for when checking insurance companies?
You should treat insurance companies like vehicle brokers. This means being careful when choosing who to insure your car from.
Some of the things you should look for are:
- That they are reputable
- That you are getting the right type of insurance coverage
- Sometimes insurance companies offer really cheap prices, however, when you look at them more closely, they’re not offering the right coverage
- That their terms and conditions are clear
- Sometimes terms and conditions can be so restrictive, you can’t claim for anything.
There are vehicle brokers that have relationships with insurance companies/brokers that you can go through. We would recommend you shop around before you decide on any particular policy. It’s also important that you take the cost of your insurance into consideration before you sign your lease contract.
