When Leasing A Car How Does Insurance Work?

2 minutes Published: 16/12/2019

What's Covered

With so many great things already included in the monthly payments of your leasing contract, you might be wondering what the score is when it comes to insurance. Is it included, and what kind of insurance do you need? We’ll talk you through it below.

Is insurance included when leasing a car?

Insurance is not included as standard in your monthly lease payments. It is the responsibility of the lessee to arrange insurance for their vehicle. Because you do not own the leased car, you must ensure that the insurance plan meets the requirements of the leasing company.

What type of insurance do I need on a lease car?

You must take out a fully comprehensive insurance policy for your leased car. 

With personal contract hire agreements, the person signing the lease agreement must also be either the main policy holder or a named driver on the insurance certificate. 

In a business contract hire agreement, the company name or director’s name should be on the insurance certificate. 

For extra protection, you may want to invest in GAP insurance, which will make up the shortfall if your car is written off. We’ve written extensively about this type of insurance coverage elsewhere. Want to find out more about the different types of GAP coverage? We’ll help you decide if GAP insurance is worth it for you!

How do I set up insurance for my lease car?

Because the finance company is the registered owner of the vehicle in a contract hire agreement, you will need to make sure that your insurance company is made aware. It shouldn’t make a difference to the price, but it is important that they know from the start of your lease contract. The vehicle must be insured from the day it is delivered until the day it is returned to the lease company. Again, you will need to ensure that you have fully comprehensive car insurance, as stipulated in the lease agreement.

Check out the links to the left for more information of the different types of insurance, or read about what's already included in your manufacturer's warranty.