Insurance is one of the biggest extra costs when it comes to cars, regardless of whether you are leasing or buying.
But insurance on a lease car can be confusing. You don’t actually own the car, so who’s responsible for the insurance?
In this article we’ll look at who is responsible for the insurance, whether lease price affects insurance and how you can lower the price.
Before we start, it should be noted that we are not insurance brokers, and we are certainly not insurance experts. However, we talk this through with customers every day, and we know enough to educate you on the basics. If you are in any doubt about anything, we recommend talking to your insurance company.
Who pays for my insurance on my lease car?
Although you don’t own the car on a lease, you are the one responsible for insuring it and therefore the one who is responsible for paying for it. The insurance has to be fully comprehensive, and 99% of the time, insurance isn’t included in your lease contract.
So you’ll have to find the insurance yourself. There will be some brokers that have relationships with insurance companies so you can insure your car through them. This saves you shopping around to try and find an insurance company. Also, if you are going through a reputable broker then you can be reassured that you will be insuring your car through a reputable company.
However, a downside to this is that you can’t be sure whether you are getting the best deal. Saving hassle doesn’t always equate to saving money. So, it might be worth shopping around to see what sort of insurance deal you can get before committing to anything.
Also, if your car broker says they do handle insurance, it would be wise to ask for confirmation of FCA compliance. A majority of brokers will not have the necessary accreditations or training to be able to handle insurance effectively. If you see confirmation of FCA compliance, then you know that your insurance is in safe hands.
So you are the one who pays for your insurance. Remember, insurance can be expensive, especially fully comprehensive. Therefore, it’s important that you take this into consideration when budgeting for your lease car. There may be times where insurance costs will take you up and over your budget. That cheap lease deal might not be so cheap when you include the fully comprehensive insurance.
Does leasing affect insurance?
It does. But, the only way it does affect it is due to the fact that you have to get fully comprehensive insurance. This is because you don’t own the car, the finance house does. And, the finance house will stipulate that you need fully comprehensive insurance.
Fully comprehensive is the highest forms of cover for your car. Any damage to your car is covered by fully comprehensive. This differs to third party or third party fire and theft, where the only damage the insurance covers is the damage to others.
What affects insurance price?
However, there are other things that do affect insurance other than leasing.
These factors are the same regardless of whether you own the car or are leasing, but they’re worth noting anyway;
- Where you live
- Your age
- The amount of driving experience you have had
- Criminal convictions
- Driving convictions
- Any penalty points
- The type of car
- And any extra qualifications such as the pass plus scheme
These are the sorts of things that insurance companies will look at while determining the cost of your insurance.
Where can I get the cheapest insurance?
There’s no specific place you can get cheap insurance. Each insurance company evaluates risks differently and prices them differently as well. Insurance isn’t really ‘one size fits all’ unfortunately. But, experience and customer stories have led us to believe that going for the cheapest insurance isn’t always the best. So, compare the different insurance companies with your broker.
How do I find a good insurance company?
When researching for an insurance company, it’s important you find a good one. Like when looking for a vehicle broker, it’s important that they are reputable and are offering the best choice for you. Some of the things you should be checking for are;
- That they are reputable
- That their terms and conditions aren’t so strict you can never claim
- And double check that you are getting the right type of insurance
- There are a lot of cheap insurance companies out there, but they don’t always offer you the right type of coverage.
Ultimately, you are the one in charge of the insurance on a lease car. You have to provide the insurance yourself, whether that be from the vehicle broker or from elsewhere, and you are the one that has to pay for it. Insurance is not included in the lease price, so it’s important that you take this into consideration while you are thinking about your budget. If you are in doubt about anything insurance related, speak to your insurance company.
Martin loves to challenge the team to make sure every aspect of the leasing process is clear and fully compliant, but that doesn't mean he doesn't love to joke around as well. He's always smiling, even on the busiest days in the office.