When planning to lease a vehicle, it’s vitally important that your vehicle is insured from the day your vehicle is delivered.
Leasing A Vehicle
Although leasing a vehicle is different to ownership, drivers are still required to take care of the insurance, otherwise they are in breach of UK automotive law.
There are a few different things you need to consider when choosing your car insurance, but the premiums can differ widely when you are attempting to insure a leased vehicle. Here are just a few helpful pointers for when you are taking lease insurance into account.
Leased vehicles require fully comprehensive cover
Because you don’t own the vehicle, it’s not possible to reduce your insurance costs by opting for third party drivers or other variables that usually help to lower such costs. Hence, fully comprehensive cover is the only route to go down when booking your car insurance, with the driver being named as the primary driver on the insurance certificate.
Fully comprehensive insurance will cover you in the event of a collision or damage to your leased vehicle when it was considered to be your fault. Although fully comp insurance has always been considered more expensive then third party insurance or fire and theft policy cover, this is simply a myth in the auto insurance world. So, how does car insurance work when leasing a car?
Third party insurance will only cover you for claims made against you from third parties. This means that any other road user or member of the public who makes a claim against you will be compensated by your insurance provider.
However, this does not protect you against claims from the first party (the leaser) or against any damages caused to the vehicle by the second party (the leasee). In essence, the presumed cheapness of third party insurance creates more risk to the driver in the event of a collision, with more expense added if they are deemed to be at fault.
Is fully comprehensive insurance more expensive than third party insurance?
When you consider the benefits of fully comprehensive car insurance over third party insurance, the answers are simple. Although you may experience smaller premiums at the beginning of your policy, this lack of expense initially adds more risk of you not receiving a payout in the event of an incident.
Fully comprehensive insurance covers you for all claims made against you by third parties or the company you’re leasing from, as well as any vehicular incidents that are deemed to be the fault of you, the driver. Therefore, the resulting expense if you are involved in an incident while holding a fully comprehensive insurance policy is significantly lower than with any other insurance package.
Do I need to take our GAP insurance?
GAP insurance (Guaranteed Asset Protection) is an unorthodox form of car insurance that covers you in the event of your vehicle being written off or stolen and can help you to fund a new leased vehicle. GAP insurance is deemed an add-on to your insurance policy and is a solid option when considering insuring a leased vehicle.