Seeking to lease a car rather than buy it? Get the right insurance

Depending on your needs and plans, you might find that you do not want to buy a car outright and deal with the costs of ownership, while still needing a vehicle. In this case a long-term lease of 2 to 5 years might be your perfect solution, allowing you to essentially rent a vehicle, with a full support package included. If you are going to lease a vehicle, you will need to consider the right form of insurance to buy to be certain that you are covered.


Whether you are buying or letting, driving without insurance is illegal. The question therefore is how does car insurance work when leasing a car? It is a legal requirement that if you drive, you need to have, at the very least, third-party insurance, the simplest of the three basic kinds of insurance: third party, fire and theft, and fully comprehensive. With a lease car, it can be tempting to choose a simpler insurance option as the car is not your own. However, your best option with a rental car is in fact fully comprehensive as, since you do not own the car, any damage caused to the vehicle that you are not insured to deal with could result in high fees and possibly, the loss of your vehicle.

If you are concerned that fully comprehensive cover will be substantially more expensive than third party insurance, don’t worry! The gap has been shrinking in recent years, as waves of new drivers choosing third party insurance has led to a raise in the premiums for third party car insurance. In 2017, fully comprehensive cover cost only 39% more than less expansive forms of insurance which left vehicles open to a lot more issues.

Short term lease options 

Leasing a car on a personal hire contract will give you access to the car for between 2 and 5 years and mean that you cannot use short term insurance contracts as you would if you were hiring a car for a short trip. The best insurance option if you have signed on to a personal hire contract is the standard yearly contract that you would have invested in as a car owner. It will match the years of your contract and keep you thinking of your car as a long-term asset. If you are going to opt for yearly insurance renewal, however, be sure to check the renewal rates which your insurance provider sends you when offering auto-renewal and be sure to look around for other options on the market, as you are bound to be able to make a saving.

Some insurance brokers will work as middlemen to find the best deals among the myriad of insurance providers and will do their best to match them to your specific needs. This can prove an incredibly useful service if you want to avoid an arduous process of looking around all the options. It is still a good idea to keep track of when your renewal paperwork is due and try valuing your car insurance online before it comes to see how the stated price compares to your findings. This will help ensure that you get the right insurance for your lease car.

Author Bio

Gavin Mcgee is a car dealer and enthusiast. Having been connected to cars since his childhood Gavin knows a lot about various cars, their makers, models, servicing and is willing to share his knowledge with others and help them solve any problems they might have related to automobiles and motorycles.