Insuring a lease car: Everything you need to know

Back to 'Expert guides'

Whether you’re a personal or business customer, leasing is one of the most cost-effective ways of getting behind the wheel of a brand-new car. At, we want to make insurance just as attainable and easy as leasing itself.

Do lease cars include insurance? Who is the policy holder? How can I lower my insurance costs?

These are just some of the common queries we get here at We’ve put together this guide that answers some of the most pressing questions on this subject.

Insuring a lease car guide

Hopefully you’ll find the answer you’re looking for below.


Is insurance included with a lease car?

While your monthly leasing payment usually includes VED, warranty and the car itself, it does not typically include car insurance.

This means that in the majority of cases, it is still your responsibility to ensure you car is insured, just like you would if you took out another form of car finance.

While there are an increasing amount of lease companies that provide complete packages that do include insurance, this is still the exception rather than the rule.


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

Most leasing companies will require you to take out a fully comprehensive insurance policy. This is because during a lease, they are the legal owners and require full protection against their asset. By taking out a fully comprehensive insurance policy, you not only cover the damage that may be done to other vehicles, but also your lease car. Here’s a quick rundown of what’s included with a fully comprehensive policy:

  • Cover for damage to other vehicles
  • Cover for yourself and any other parties’ injuries
  • Cover for damage when fault can’t be proven

Most filly comprehensive policies also cover things like:

  • Windscreen repair
  • Courtesy car
  • Breakdown cover

It’s always best to check the ins and outs of what’s actually included with your policy though, as this varies significantly between insurers.

While fully comprehensive insurance might be slightly more expensive than a third party policy, it’s the best option for everyone. It means that if you are involved in an accident, you won’t be liable for any big bills. You will only be liable to pay the excess, no matter the cost of the repairs.

Who does the policy holder need to be?

When it comes to personal lease agreements, the main policy holder on the insurance certificate must be the person who took out the agreement (known as the hirer).

If it’s a business lease, then the main policy holder should be the company itself, or a director of the company. The company must then supply a letter to employees who are authorized to drive the vehicle.


Can other people drive my lease car?

Aside from the fact the main policy holder must be the person who is on the lease agreement certificate, it’s just like any other insurance policy. This means you can add named drivers, which will allow them to drive on your fully comprehensive policy.

If drivers haven’t been named on the policy and don’t have their own fully comprehensive policy that includes other vehicles, they will not be covered. So it’s always worth adding named drivers, even if they have their own insurance.

How do I pay for my lease car insurance?

Just like any other insurance policy, you can choose to pay for your premium up front for 12 months, or pay monthly. Paying monthly for your insurance can lead to slightly higher prices though, because the company will add interest to the original total. This means you’re likely to save a little bit on your premium if you can pay it all up front. However, you might decide that paying a lower amount every month is the most affordable option for you.


Do all insurance companies cover lease cars?

Yes – for the most part, all the usual car insurance companies will cover a leased car. The only difference between a policy on a lease vehicle and one on a privately owned vehicle is the name on the V5 registration document.

Can I accrue no claims with my lease car?

Of course! If you already have a no claims bonus, you can carry this over to your lease car insurance policy. If you want to build up no claims while driving your lease car, then you can do this too.

Does my lease company need to know my insurance details?

For the most part, leasing companies will ask for proof of fully comprehensive insurance ahead of the delivery of your vehicle. This means it’s important to tally up your dates to ensure you are covered from the moment your lease car arrives.

People checking car damages after car accident

Is it more expensive to insure a lease car?

No. There are so many variables when it comes to insurance, the fact you are insuring a leased car makes little to no difference at all to the average car insurance cost. The only reason you may find premiums to be higher is the fact you must have a fully comprehensive policy. This is sometimes more than a third party policy, but some drivers might even find it’s cheaper to go for a fully comprehensive policy. It really is that variable!

What can I do to lower my insurance costs?

With the above in mind, here’s a few top tips to keep your lease car insurance costs in check.

Increase your excess

If you increase your excess voluntarily, it means you’ll reduce the overall costs of your policy. However, it’s worth considering if you’ll be able to afford this payment should the worst happen.

Consider your mileage

Just like leasing, the higher the mileage agreement, the more you’re likely to pay for insurance. With more people working from home and travelling less, it might be worth considering your mileage requirements.

Add more drivers

Adding more named drivers can really help reduce your premium, especially if you’re not the most experienced driver or have little to no no claims bonus. The age, experience and driving history of your named drivers should always factor in to your decision though.

Install a black box

If you’re really looking to lower your premium, fitting a telematics device could be the best way to do it. These devices keep tabs of your speed, the distance you travel and many other factors – even the time of day you drive. This helps the insurer see how you use your vehicle, and means lower (or higher) premiums, depending on the result.

Pay annually

As we mentioned above, if you’re able to pay annually for your insurance rather than monthly, it can help keep costs in check over the course of a two-to-four year lease. This is because you won’t be paying interest on monthly payments.

Not sure what car you want?
  • Easy-to-use tool
  • Save time and money
  • Meet your match
Find your dream car

Get the most out of

Create an account. It's simple and easy to do, so you can:

  • Receive tailored deals by email
  • View your search history
  • Make faster enquiries
  • Chat online to leasing experts

Already have an account?
Sign in here

Create an account
Step-by-step guide to leasing

Step-by-step guide to leasing

A quick guide to walk you through the six simple steps of car leasing - from start to finish

View the step-by-step guide
Need some help deciding?

Need some help deciding?

Our Top Picks articles can help you choose the right vehicle for your budget. Explore the latest recommendations straight from our team of in-house experts.

View all Top Picks
Frequently asked questions

Frequently asked questions

Got a question - someone may have already asked it! Head on over to our FAQs page for a list of the most commonly asked car leasing questions.

View all FAQs