Getting Car Insurance For A Lease Car
Many of our customers have questions about insurance policies and who is responsible for insuring their leased car. This quick and easy guide will help clear things up and hopefully answer any questions you might have.
Does car leasing have insurance included?
As standard insurance is not included in the monthly payments for a car leasing contract, it is the responsibility of the individual or business leasing the vehicle to arrange insurance - a similar process to purchasing a car on finance.
What type of insurance do I need?
You must take out a fully comprehensive insurance policy for your leased vehicle.
For personal contract hire agreements, the person taking out the agreement must be the main policy holder or a named driver on the insurance certificate.
For business contract hire agreements, the insurance certificate should be in the company name or the director's name.
How do I go about setting up insurance for my leased car?
For business contract hire and personal contract hire, the finance company is the registered owner of the vehicle, not you. So, when applying for insurance for your new lease car you simply need to inform your insurer of this fact. If you don't, it can cause confusion with some insurance providers as their system is set up on the assumption that you own the car you’re getting a quote on. It shouldn't make a difference to the price but make sure they know from the start.
Your vehicle needs to be insured from the day it is delivered to you, and your vehicle must stay insured until the day it is returned to the finance provider.
Tips for lowering your insurance premiums
Car insurance premiums can be costly and are something that almost everybody begrudges paying. However, with a little know-how you can make considerable savings on your insurance payments and smash that standard first quote out of the park. See some helpful tips below:
Be mindful of a car's insurance group. Generally, as a rule of thumb, the less valuable a vehicle is the lower it's insurance premium will be. However, don't assume that just because one model is cheaper or more expensive, that its insurance premium will follow the same pattern. Each car is assigned an insurance group number (the lowest being 1 and highest being 50) which depicts the cost of insuring the vehicle. Every car lease deal on our website has its insurance group listed as shown below, so you can get a quick idea of insurance costs when comparing models.
Put an additional driver on the policy. It may seem strange but adding an additional driver (or drivers) can often bring down the cost of your policy. Additional drivers can spread the risk of the policy in the eyes of insurers; and if the additional driver is seen as lower risk than you, then the price will almost certainly drop. Things like age, endorsements on licence, job and driving experience all play a part in how insurers evaluate the risk of an individual so keep this in mind.
Don’t just stick to comparison sites. Insurance comparison sites are great for quickly comparing quotes but not all insurance providers are listed on these sites. Some companies only operate via their own channels and so you could be missing out on the best deal if you don’t check these independent companies.
Try different parking locations. Where your car is parked makes a big difference to the cost of your insurance as this directly correlates with the risk of vandalism and theft. In most cases, cars parked in a garage or driveway will have the cheapest insurance price, but there are rare circumstances where street parking will turn out cheaper. Therefore, it’s worth checking the price for multiple parking locations on your quote requests.
Don’t make claims for minor incidents. The no claims bonus is one of the most powerful influences when it comes to lowering your car insurance premiums. Therefore, making a claim for minor damages which cost only marginally more than your excess will do more damage than good in the long run. Only claim on your insurance for major damages and your monthly payments should keep getting lower over time.
Pay yearly if possible. Paying for your insurance in 12-month blocks can cut a large chunk off of the overall cost of your plan. Therefore, if you’ve got the cash to pay your insurance in a lump sum it will usually save you money overall.
Third-party insurance isn’t always cheaper. Although logic would conclude that third-party insurance is always cheaper this isn’t necessarily the case. Some sources suggest that this is due to the risk associated with those who choose third-party insurance. Other sources claim it is due to the fact that a third-party can cause unexpected costs for the insurance company, due to the belief that the policy holder will usually wait for the other party to claim via their insurance, rather than inform their own insurers of a crash or incident. Either way, it's best to not assume that third-party insurance is automatically the cheapest.
Take a higher excess amount. The amount you’re willing to pay in the event of a claim can also have a noticeable impact on your monthly repayments. The higher the excess you’re willing to outlay in the event of making a claim, the lower your monthly price will be. It’s a bit of a balancing act so finding a good in between point is probably best for most drivers.
Have a black box fitted. Certain insurers give discounts to those who drive more carefully; this can be monitored via a telematics device. Such a device measures the speed at which you travel, vehicle handling and how aggressively you drive. Over time, reliable drivers can see large reductions in their premiums with a black box insurance policy.
Still have questions?
If you still have any questions about the car leasing process, or would simply like additional clarification on car leasing insurance, don't hesitate to get in touch. One of our helpful advisors will be more than happy to offer assistance.