What Type of Insurance Do I Need When Leasing a Car or Van?
One of the great advantages of leasing a car or van is that feeling that someone else is doing all the hard work for you. There’s a brand-new vehicle, very unlikely to break down but, if it does, it comes with a warranty that basically says they’ll fix it for free!
There’s a maintenance agreement that, though it is optional, means you don’t have to worry about servicing or tyres and there’s even a level of breakdown cover that comes with most leases that stops you having to look elsewhere for additional assistance.
But what happens with car insurance?
When leasing a car, how does insurance work?
Third-party insurance, often the cheapest on the market, gives you a legal level of insurance for the road and makes sure that if you are in a crash, even if it is your fault, any damage to the other people involved is paid for.
Third-party insurance, however, doesn’t provide any money for fixing your car, and when you are leasing a car, it’s simply not suitable – and not something any leasing company is going to agree to!
Fully comprehensive insurance covers everyone, yourself included, in the case of a road traffic accident and is compulsory when taking out a lease. It’s a little more expensive than some third-party cover but is needed to make sure that if, anything does go wrong, the finance company isn’t left out of pocket or chasing you for damages.
And unlike those other bonuses, insurance is something you must sort out yourself. No lease car comes with insurance as part of the package.
For more information on comprehensive and third-party insurance, why not take a look at Bobatoo’s guide: What does third party and comprehensive car insurance actually mean?
The finer parts of insurance for a leased vehicle
Insuring a leased car can be as simple as getting standard fully comprehensive car insurance and getting on the road – especially if it is a personal contract hire used for domestic and social use only, but what other options are there?
Whether you need business lease car insurance or are insuring your personal lease vehicle for work use, if you use your car for work, you will need some level of business use insurance.
Business car insurance ranges from a basic level of commuting (which often comes as standard with your domestic and social insurance), through to comprehensive van insurance that covers you for using the vehicle as an integral part of the business.
Examples of situations where you are likely to need an increased level of business cover include:
- Using your car during work hours to visit clients
- Working on multiple sites
- Using your van or car to deliver to customers
- Leasing a van as a main work vehicle, to transport tools or equipment as part of your job
- Car leasing for use as a taxi
- Being a courier
If you use your vehicle for work, you may also need to get a level of contents insurance in case the car or van is broken into and the items stolen – for example tools, or packages meant for customers.
Vehicle contents insurance is an extra level of insurance on top of your standard leased car insurance.
Bobatoo is on hand to get you a quote on van tool insurance, simply tap below to find out more!
Guaranteed Asset Protection – GAP insurance
When looking at car insurance for a leased car, one extra level of insurance that comes highly recommended is GAP insurance.
GAP insurance is a one-off payment that provides extra insurance cover in the case of a car crash that results in a total loss.
In this case, your main insurance company will reimburse you the current market value of your vehicle, but due to the difference between this value and the amount you have paid in lease payments to the finance company, there will likely be a deficit – and that could run to thousands of pounds.
GAP insurance is there to pay for that difference, ensuring that no matter what happens, you aren’t left out of pocket or having to continue to make payments to the leasing company for a car you no longer have. GAP insurance makes sure you have a fresh start and can begin a new lease with no problems.
Car leasing insurance – FAQs
Getting the cheapest car insurance
We all want the best deal on car insurance, whether it’s for a leased car or otherwise. At Bobatoo we’re always on the lookout for the best deals and can offer great advice for you to get what you need.
Bobatoo’s tips and tricks on cutting your car insurance costs is full of helpful suggestions which can help you save money, such as considering a telematics (or black box) insurance policy!
You should also consider purchasing your insurance via cashback websites like Quidco, who will pay a percentage of your annual premium straight back to you.
Remember – there’s really not much difference between getting car insurance for a leased car than there is for your own vehicle, but do get GAP insurance to make sure that if you do have a crash that results in the destruction of your beloved lease car, you are not left owing the leasing company money.
For the best quote on car insurance, tap the green button below! For a quote on van insurance tap here - you are under no obligation, simply get in touch to see how much money you could save!