Leasing is becoming increasingly popular, but there is an assumption that there is a lot less flexibility in terms of who can drive the vehicle.
So, can someone else be insured to drive your car if you lease it?
Contrary to popular belief, yes they can. It’s very similar to bought car insurance. We’ll go into more detail in a little bit.
We advise people on this every day, so we’re going to debunk the myth by telling you everything you need to know about insuring someone else on your lease car.
Can I let someone else drive my lease car?
Yes, you can, as long as:
- The person has permission granted by the person or company named on the lease.
- They are on said person’s insurance.
- Or, they have their own comprehensive insurance to drive a lease car not in their name.
Firstly, make sure you trust the person driving it. Lease cars are a big investment so letting your newly passed eighteen year old drive your brand new Audi A4 probably isn’t a good idea.
Secondly, make sure you speak to the insurance company to let them know of the addition to your insurance.
Usually, they’ll let you add a person on a temporary or permanent basis.
The insurance company will then calculate the additional cost depending on their previous driving experience. Just the same as they would with any other car insurance.
Once that’s paid, they are free to drive the car.
Do I need to get permission from the finance company to insure someone else?
Though the finance house owns the car, it is not essential for them to be aware of every named driver insured on the car.
However, if you are unsure, it’s always best to mention that someone else will be driving the vehicle at the point of purchase/insurance.
Is insurance included in the lease price?
For the most part, probably 99% of the time, insurance isn’t included in the lease price.
There are some brokers that will have partnerships with insurance houses, which might help save you the hassle of insuring your car separately. Realistically though, this reduces your options significantly and you may not get the best deal.
Brokers themselves won’t have the necessary training or accreditations to be able to effectively handle your insurance. So, don’t trust them if they say they do without confirmation of FCA compliance. This ensures that they are qualified to talk about insurance. 99% of the time, when it comes to insuring your lease car, it’s up to you to be responsible for it.
It’s also important to note that sometimes, insurance cost can bring the monthly price up and over your original budget. We would always suggest you check insurance prior to signing any lease agreement.
That super cheap Mercedes you’ve had your eye on might end up being double the price once insurance is involved.
What happens when a named driver on a lease gets penalty points?
As with owned cars, penalty points are done individually. There are no differences.
If the driver is at fault then they will get the points on their licence. If the penalty is from a camera, then the letter will go to the lease company because they are the registered keeper. They will then advise the authorities of the name of the person or company who has the finance agreement. The authorities will then write to you. However, if you were not the one driving the vehicle at the time, you must alert them as to who it was so they can then write to the person driving. This is why it’s important you know exactly who is driving your vehicle and when.
At the end of your policy and the start of a renewal or a new policy, those points will be accounted for. This means that the price will most likely rise. Points don’t get loaded onto the policy mid-term, so it will only affect the renewal or the new policy price.
You should keep in mind that if you’re paying monthly instalments with your insurance and you make a claim, the full premium has to be paid upfront and in full before they’ll activate the claim. This is usually in the event of a ‘fault claim’ where there will be a claim against your insurance policy.
Can my named driver take my lease car abroad?
In general, the same rules apply to lease cars as they do with owned cars.
You will need to call your lease company a few weeks prior to taking the vehicle abroad, call up your insurer and let them know when and where you’ll be going. A lot of the time, insurers will be okay with it and will probably only have a few restrictions.
However, it’s always worth making the call because if anything was to go wrong and a claim had to be made, your insurance will be invalid.
Can I finance a car for someone else without being on the insurance?
At this time, the person who is financing the lease would usually need to be the policyholder, as the person who has the financial interest in the vehicle. Some insurers may allow someone else to be policy holder, but that’s something you will have to ask for and not all of them will allow it.
However, you don’t have to be the main driver. If your daughter, son, spouse, friend or employee will be driving the car 100% of the time but you’re footing the bill, you will have to be the one on the insurance. But, you won’t have to be the main driver.
In terms of no claims bonus, it’s the policyholder which builds the no claims. However, there are some insurers that will take into account someone being the main driver on someone else’s policy, so they will still be in with a chance of a discount even without being the policyholder. Again, that’s up to the discretion of the insurer and not every company will do that.
While we’re on the subject of talking to your insurer, you absolutely must talk to your insurer before signing anything. There are so many people who get caught out with main driver/nominated driver confusion with lease insurance. You aren’t the owner of the vehicle, which means the only way you can guarantee that you and your named drivers are completely covered and your insurance is valid, is to talk to an insurance professional and get it all in writing.
What is a married/spouse no claims bonus?
Now, not every insurer offers this and it’s generally something you ask for. But, it’s worth looking into if your spouse is going to be on the insurance.
This is how it works; either you or your spouse has gone five years without making a claim. And now, the name driver wants a new car. Their no claims discount can be transferred to the policy despite not having the no claims bonus in their name.
After one year, they can keep the discount on their policy but they will then only have one year no claims.
Again, it’s something you have to ask for and not every insurer will offer it so it’s something you’ll have to ask for.
How much will the insurance on my lease car cost?
When you lease a car, the financial interest doesn’t lie with you. In general, that means you’re unlikely to take quite as good care of it as you would if you invested £30k+ in it. Because of this, it increases the risk of damage.
Due to this added risk, insurance on a lease car may be more expensive than an owned car. However, there are ways to make it cheaper.
Is there a cheaper lease option for car insurance?
At the point of writing, it doesn’t make any difference whether you have a lease that gives you the option to own your car at the end, or whether you have to hand it back. The risk to the insurer is still the same.
This is because at the end of the day, you don’t physically own the car and you haven’t guaranteed you will buy it at the end. So, you’re a high risk for treating the car poorly. Of course, we know that you will treat your car with love and respect, but the insurers don’t.
Can I reduce the cost of my insurance on my lease car?
The quickest and easiest way to get a reduction in your insurance cost is to go for a cheaper car. I know, sorry.
The truth is, the smaller the investment the insurer has to cover, the less they’ll expect you to pay to make up the difference should you ever need to claim. So, if you don’t want to fork out that much money for insurance (and use that money to go on holiday) then go for a cheaper vehicle.
Can I transfer my no claims bonus from my company car?
If you’re going from a company car to a personal one, you can sometimes transfer the no claims bonus you’ve built on the company car. So long as you have a letter from the business to say you’ve had no claims.
This doesn’t necessarily mean you’ll get the full discount but some insurers will take it into account, so it’s worth mentioning.
So, to answer your original question; yes, you can insure someone else to drive your lease car. Hopefully this article has cleared some things up, and provided you with more information on the way. However, if there is anything that you are unsure about, we recommend speaking to either your insurance company, or your broker or dealership.
- What are hydrogen fuel cars? Are they are real possibility? - 22nd January 2018
- Six secrets to know when renting a car - 19th January 2018
- What are the safest cars in Europe? - 13th January 2018