Lease Car Insurance

Why Choose Leased Car Insurance from Keith Michaels?

Leasing is one of the easiest ways for both business and private users to drive a new car with a lower upfront cost, and we believe insuring your lease car should be just as straightforward. Mainstream insurers often struggle to provide suitable policies when the owner and keeper of the vehicle differ, as is often the case with personal contract purchase (PCP) or personal contract hire (PCH).

At Keith Michaels, we use our in-depth market knowledge to secure the right policy for your unique requirements, whether personal or business, at the best possible price. We’ll carefully consider the details of your lease contract and your personal preferences to ensure you’re fully covered. Get in touch today for a tailored lease car insurance quote.

What Insurance do I need for a Lease Car?

In most cases you will require fully comprehensive insurance to cover your leased vehicle. This protects you against damage to other drivers and your own property. You may find taking out insurance on a leased vehicle is more expensive than insuring your own vehicle – especially as some car leasing agreements require you take out Guaranteed Asset Protection (GAP) insurance as well. GAP provides enhanced protection for the dealer against damage or theft.

Insuring a lease car is slightly more complex than insuring a private one. This is because, when it comes to returning the vehicle you may be required to fork over a hefty sum for any damage deemed to be beyond normal wear and tear. Plus if the vehicle is written off, you risk having to pay the difference between what the car was worth new and its value now. At Keith Michaels we are able to provide Guaranteed Asset Protection (GAP) with our lease car insurance policies, whether it’s a requirement or personal preference, we can get you the quality leased car insurance you deserve.

What does Lease Car Insurance cover?

Lease car insurance typically requires a comprehensive policy, offering the highest level of cover for both the leased vehicle and third parties.

What’s covered:

• Injury to other people or damage to their property resulting from an accident.
• Theft of your lease car, plus damage from attempted theft or fire.
• Accidental damage to your car and injuries you sustain in a collision, regardless of fault.
• Cover for personal belongings in the car that are damaged or stolen, when specified in your policy.

What’s not covered:

• Expected wear and tear to the vehicle, such as tyres and brakes.
• Mechanical or electrical faults not resulting from an insured incident.
• Driving other cars (DOC): cover is often not included, so always check your policy.
• Optional extras, like courtesy cars or windscreen repair, may not be included as standard; these are often additional add-ons.

Comprehensive insurance is usually mandatory for car leasing, offering broad protection but with some exclusions – always review individual policy details carefully.

Understanding Business Lease Car Insurance

Business Contract Hire (BCH) allows businesses to purchase their vehicles with a minimum down payment and an agreed mileage. Insuring leased business cars is a simple process; at Keith Michaels we accurately tailor our policies to your businesses requirements either through our company car insurance or fleet car insurance policies.

Understanding Personal Lease Car Insurance

Car leasing is recognised as the best strategy if you plan to upgrade your vehicle every couple of years and would usually consider purchasing a car that doesn’t retain its value. That way, the costs associated with the vehicles depreciation are held by the financing company rather than you. The correct insurance policy can save you money at the end of your lease agreement.

Do car leases include insurance?

Insurance is not included as part of your monthly lease payments. It is an individual or business’s responsibility to make sure the appropriate full cover is in place when leasing a vehicle.

How can I lower my car leasing insurance costs?

Ensuring maximum safety for your vehicle is one of the best ways to reduce the cost of your car leasing insurance. If you install safety devices such as an alarm system or steering wheel lock, this will show your insurer that you are taking measures to avoid the risk of theft. Parking your car in safe locations, particularly overnight, will also help.

Driving a low insurance group vehicle, that is low in value and performance, will further help to reduce the cost of your premium.

How long does lease car insurance last?

Lease car insurance usually lasts for 12 months, as most insurers provide annual comprehensive policies. This is the standard requirement from many lease car providers.
If you are leasing a car short term (weeks or months), you can still get cover from many insurers. However, you may face cancellation fees if you end the policy early, or an admin charge if you transfer the policy to another car.

What happens if you write off a lease car?

Depending on the severity of the accident, you will need to speak to the finance company in charge of your lease to see whether repairs are viable or if it needs to be completely written off. If it is a write off, your finance company will end the agreement and decide on a settlement figure required to pay it off. This is why having the necessary lease car insurance protection in place is so important.

How to Set Up Lease Car Insurance

When applying for either personal or business lease car insurance, you need to inform your insurer of the following information so they can get a clear understanding of your leasing contract and the type of cover you need:

• The registered owner of the vehicle – this will be the finance company who you have signed a car leasing contract with
• The registered keeper – this will be you

Choosing a specialist insurer is advisable as most mainstream insurance companies may not have the necessary policies in place to cover motorists who do not own the car they are insuring.

Remember to be completely open and honest when providing your details to your insurer. Failure to do so could result in a policy that does not fully cover you for your specific needs and any claim you make would therefore be refused.

What is the difference between leasing and financing a car?

The main difference between leasing and financing a car is that you will completely own your car at the end of a financing contract. With a leased car, it is not yours to own (unless you have the option to put a balloon payment down at the end of your term). With financing, you will take out a loan to pay for the car, along with interest, whilst you are purely paying to lease the car in a lease contract. There are typically terms in place with leasing that mean you cannot exceed a certain number of miles during the lease term, which you do not have with financing.

What are the benefits of a leased car over a purchased car?

The obvious benefit is that you can drive a nicer car for a cheaper upfront cost. If you’re a business in particular, making a good first impression is important, and luxury, sophisticated cars can be extremely costly to buy and run. With a lease, maintenance costs are lower, the monthly repayments are lower than loan repayments and a 3-year warranty is usually in place to cover the whole/majority of the length of an agreement.

For business leases, mileage expenses can be deducted the same way as a purchased car, however there are agreed mileage limits for leased cars, so you will need to make sure these aren’t exceeded. Whilst wear and tear will affect a purchased car’s resale value, for a leased car, you can land yourself an extra charge when handing it back – so make sure it’s being looked after.

What happens at the end of a car lease?

What happens at the end of your lease depends on the type of lease. Typically, you will have the option to hand the car back and take out a lease on a new car. Alternatively, you can agree on a price to buy the car which will be in the form of a balloon payment. Sometimes you can also extend your lease on your current car if you wish to keep it for longer.

When handing your lease car back, it will be inspected for wear and tear and have its mileage checked. If wear and tear is not deemed acceptable for its age, you will be charged. Additionally, if you have gone over your agreed mileage you will be charged a pre-agreed amount.

How much is insurance on a leased car?

As mentioned above, you are usually required to take out a comprehensive policy when leasing a car and according to data from the ABI, the average comprehensive annual premium was £589 in the first quarter of 2025.

However, the cost lease car insurance very much depends on your individual circumstances, such as the type of car you drive, your age and your driving history.

Contact us today and we will use our expert industry knowledge to source you the best available quotes.