Car leasing is a great alternative to purchasing a new car that’s too expensive; leasing allows you to pay for the car on a monthly basis over a set period. Once your leasing period is up, you can either choose to renew the lease, or to exchange it for a new car which will then work in the same way.
However, one question that’s always on people’s minds when it comes to leasing a car is ‘does car leasing include insurance?’.
This guide will tell you everything about car leasing, and its relationship with regards to insurance.
Simply put, standard insurance isn’t typically included in the monthly payments of leasing a car. It is the sole responsibility of the person leasing the car to arrange the insurance for it.
When it comes to purchasing insurance for a leased car, it’s important that you let your insurance provider know that you don’t own the car, but that it is in fact a leased car. While it shouldn’t affect the price of your insurance premiums too much, it’s still important to make the insurer aware.
There are some car leasing companies who may include insurance when you lease a car from them, but it’s likely that they’ll charge you a higher premium than if you were to sort it out yourself.
When taking out a lease for a car, make sure you’re fully aware of the terms and conditions, especially if you need to be responsible for making sure you have the right level of car insurance.
There are two main types of car leasing – personal contract hire (PCH) and personal contract purchase (PCP). The below will show you the different types of leasing and the types of insurance you’ll require for each.
With personal contract hire, the monthly payments that you make to the leasing company are based on the estimated depreciation of the car. A car that is expected to hold its value for a long time, would typically have lower costs of monthly payments.
With PCH car leasing, you will be required to have fully comprehensive car insurance and the person who is leasing the car must be the main insurance policy holder, or a named driver on the insurance.
With personal contract purchase, you have the option to purchase your car outright when your leasing agreement comes to an end. You will pay regular monthly instalments as with PCH, but you can then choose to pay an additional sum of money at the end of your leasing period in order to purchase the car as your own.
Insuring a car that’s been leased as personal contract purchase is the responsibility of the driver and the company that you’re leasing it from will have no input whatsoever; it’s up to you to arrange all the necessary insurance details.
Car insurance is quite costly anyway, but when you think about leasing costs for the car, as well as petrol costs as well, insuring a leased car can prove to be a costly experience. Thankfully, there are a few things you can do to try and lower your car insurance costs.
One of the main factors determining the price of insurance is which insurance group the car belongs to.
Therefore, if you lease a car that’s in a lower insurance group, the cost of insurance is also likely to be cheaper.
Blackbox insurance policies are considered to help you to significantly reduce car insurance costs as they work by assessing how well you drive, as well as your mileage and safety.
When leasing a car, you may want to opt for a Blackbox insurance policy to help keep the costs of insurance down as much as possible.
Unfortunately, many car leasing companies don’t include insurance as standard; you will be expected to sort it out for yourself.
It’s important that you make sure you purchase the right insurance policy for the type of leasing contract that you have, otherwise you could find yourself not being full covered if you need to make a claim.
It’s a good idea to shop around to find the best leasing deal, as well as the best car insurance policy in order to save you as much money as possible.