How does leasing affect car insurance?

If you’re looking at leasing a vehicle, then you need to think about how this could affect car insurance.

Insuring your leased car is one of the biggest extra costs when it comes to cars, whether you are leasing or buying.

But, does leasing affect car insurance? And if it does, how?

Before we begin, we should note that we are not insurance brokers. Therefore we are not experts. If you are in any doubt about insurance we recommend going to an insurance broker.

We can, however, give our opinion. And, we inform our customers of that opinion every day. This is why we’ve decided to answer the ultimate question; “How does leasing affect car insurance?”.

How does leasing affect car insurance?

The only way leasing affects insurance is that you have to get a certain type of insurance.

When you lease a car, you have to get fully comprehensive insurance. You can’t get third-party or third-party fire and theft; it has to be fully comprehensive.

Car insurance

Fully comprehensive insurance covers your car for pretty much everything. It’s one of the highest forms of cover for your vehicle. Third-party or third-party fire and theft only cover damage to others as a result of damage that was your fault. Any damage to your car is your problem. However, fully comprehensive covers the damage done to your car as well.

This is the case for every lease contract. In your contract, the finance house should stipulate that you need to have fully comprehensive insurance, as does everyone else driving your lease car.

What affects the price of car insurance?

What affects insurance prices in general? There are loads of things that can affect the price of insurance. Some of the things that affect the price are;

  • The type of car
  • Where you live
  • Your age
  • The amount of driving experience you have had
  • Extra qualifications – such as the pass plus scheme
  • Criminal convictions
  • Driving convictions
  • Penalty points

As you can see, there are a lot of things insurance companies take into consideration before they determine the cost of your insurance.

Can someone else be insured to drive my leased car?

Yes, they can. There are some conditions, however. They must;

  • Have permission from the person or company named on the lease
  • They are on that person’s insurance
  • Or, they have their own fully comprehensive insurance that enables them to drive a lease car that is not in their name.

If you want to add the person to your insurance, then let your insurance company know.

They will then add them on either a temporary or permanent basis.

Can I lease a car without being insured on it?

If you are financing a car for someone else, do you have to be insured on it?

Yes, you do, but you don’t have to be the main driver. For example; if you are financing a lease car for your spouse and they will be driving it 100% of the time, you will still have to be insured on it. But, you can have them as the main driver.

Is insurance included in a lease contract?

Generally, no it isn’t. Around 99% of the time, you won’t get a lease contract that includes insurance. Read our article and find out who pays insurance on a leased car in more detail.

Vehicle brokers themselves do not have the training or the accreditations to handle your insurance or advise you on it. Unless they are FCA-regulated, then they can do so. But, brokers don’t tend to handle insurance.

Some of them do, however, have relationships with insurance brokers. This may save you the hassle of having to do it all yourself. But, you are not obliged to go through that insurance house. You might not be getting the best deal for your situation.

However, a benefit of this is that you know that the insurance company is reputable and trustworthy.

There will be some manufacturers that offer free insurance for the first year, but that won’t be built into the agreement. It will still be separate. But, dealerships and manufacturers do offer insurance. However, you will be paying a premium for it.

Don’t forget that as insurance isn’t included in the price of your lease, this will bump up your payments. Sometimes, this can bring you over your monthly budget.

So, that cheap Audi might not be so cheap once you consider insurance. Therefore, we recommend looking at the insurance before you agree to anything.

What should I look for when choosing an insurance company?

What sort of things should you be looking for when deciding which insurance company to use?

  • Check to see if they are reputable
  • Make sure their terms and conditions aren’t so strict you can never claim
  • Check you’re getting the right type of coverage
  • There are a lot of cheap insurance companies out there, but they don’t always offer you the right type of insurance.

Where can I find the cheapest insurance?

No company can guarantee they are providing you with the cheapest insurance. This is because each insurance company evaluates and prices risks differently.

It’s not a one-size-fits-all process, insurance companies are bespoke. Experience and customer stories have taught us that going for the cheapest is not always the best. So, compare the different insurance companies with your broker.

The only thing we can recommend is having a look around to see what sort of deal you can get.
So, as you can see, leasing does affect insurance. However, it only affects what type of insurance you get. There are a whole load of other things that affect the price.

While fully comprehensive may be more expensive, it is a condition of leasing a car. And while it’s not included in the lease contract, you can get your insurance through a broker if you wish.

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