When you're choosing a car, you should look at all the associated costs. One of the biggest (and yet most overlooked) is insurance. And while leasing doesn’t specifically affect the cost of insuring a vehicle, there are some small ways that it can have an impact on the overall cost of your insurance. So, to help you create an accurate car budget, here are some of key considerations.
Comprehensive insurance cover
Most (if not all) leasing companies will insist that you take out fully comprehensive insurance on your lease car. This will cover you against the cost of damage to another car in an accident, possible injuries the other driver may receive and also the cost of your own repairs. It will also protect you against the cost of theft, fire and damage caused by some types of weather conditions.
Whilst comprehensive cover is amazing, it is the most expensive type of coverage that you can get so you’ll need to make sure that your budget can stretch to allow this.
The type of car you’re insuring
One of the main influences on the cost of your car insurance is the insurance category that the vehicle actually falls into. There’s 50 of these and the higher the number, the more expensive the car is to insure. When you’re thinking about leasing a car make sure to pay attention to what insurance category it’s in so that you can take account of the cost of insurance.
Generally, the less a car is worth, the smaller the insurance cost. This isn’t always the case but it’s normally true.
As one of the main draws of lease contracts is the fact that you get hold of of new, high-spec cars, you should expect to pay more expensive insurance premiums than if you were just driving any old banger.
General car insurance factors
As well as things specific to the lease itself, there are obviously a range of other factors that can affect how much you pay for your insurance policy. These generally include:
- Your age
- How long you’ve been driving for
- Where in the country you live
- Any extra driving qualifications you have
- If you have a no-claims bonus
Guaranteed Asset Protection is a type of extra insurance that most finance companies will require you to arrange for all lease cars. It’s essentially a type of extra insurance that protects against the gap in value between what the car was worth when you first bought it and how many payments you have made on its lease at the time of claiming.
It can be useful if you want to be certain that you’d get enough money to buy a completely new car, of the exact specification, make and model in the event of an accident.
It’s better suited to higher value cars that are new, rather than those lower in value or second hand.