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Car Leasing Insurance

You may not own your lease car but that does not mean that you don't need to insure it.

Insurance is not usually included in car lease agreements and it is your responsibility to make sure that you have the right insurance cover until your leasing contract expires. 

Private car leasing is also known as PCH or personal contract hire and is an increasingly popular choice for drivers who do not want to own their own vehicle. There are several benefits to leasing a vehicle. These can include making a wider range of vehicles available to you, even if your budget is limited, and not having to be concerned about resale when you opt to change your car. Of course, there are also limitations, such as being tied into the term of a contract and not having actual ownership of the car. 

Insurance is rarely included 

It is rare to find car leasing agreements that include insurance and, whilst you may not be the legal owner of a leased vehicle, the law states that you must have appropriate insurance cover. 

Even if you do find a car leasing deal that includes insurance, it is often worth looking into alternatives to make sure that you are getting the right cover for you at the best possible price. You may also be offered insurance as an add-on when you sign up for your car leasing deal but, again, it can pay to look at alternatives rather than accepting the first policy you are offered. 

You should also make sure that the insurance policy you finally choose only covers you for what you need, or you could end up paying more for nothing. This may be the case when it comes to breakdown cover, which may well be included in your lease agreement. 

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Your questions answered

What types of insurance are there for leased cars?

Fully comprehensive insurance is required for almost all leased vehicles. This will ensure that the cost of the lease car is covered if it is stolen or written off and any damage to the lease car or someone else's vehicle is also covered. If you have a personal contract hire agreement for your leased vehicle, you must either be a named driver or the main policyholder for the insurance cover to be compliant. If you have a business contract hire, or BCH, agreement, then the insurance certificate will have to be in the name of the company or the business' director.

How do I set up insurance for a leased car?

You should inform your insurer that your vehicle is officially owned by a finance company rather than yourself. You also need to plan ahead as your car will need to have insurance from its delivery date until you hand it back to its registered owner.

How much will my lease car insurance cost?

Your insurance shouldn't cost more for a lease car than it does for a vehicle that you own. It is worth factoring in insurance costs when considering the type of car you want to lease, however.