Car Insurance for Lease car Drivers

Car insurance comparison for lease car drivers

As all cars depreciate as soon as you drive them, leasing provides an alternative to paying to own something that is losing its value.

Leasing is usually more affordable with monthly payments typically 35- to 55 per cent below those of a car loan and only a small deposit is usually required. This means lease car drivers can access a brand new vehicle that might previously have been out of their price range. The car`s warranty will usually cover the period of the lease, while maintenance and road tax costs can also be included. Drivers also have the opportunity to change their vehicle for a brand new one every two-four years.

In terms of car insurance however, options are more limited. You must have comprehensive car insurance because you are driving somebody else`s vehicle i.e the vehicle belongs to the lease company. Generally you will be required to have an insurance policy in place that starts around five days before delivery.

Why leased car drivers should compare car insurance quotes

When leasing, your insurance options will be more limited than when you own the vehicle as many providers do not quote for leased vehicles. This is because you are not the registered owner of the car – that is the vehicle leasing company – you are only the registered keeper.

As such it makes sense to compare as many policies as you can rather than approaching one insurer. There are huge advantages to comparing car insurance policies if you`re looking to drive the price down. A comparison website can compare quotes from dozens of providers with one search helping you find the best deal for your needs.

For example, a 30-year-old leasing a BMW 116 with five years no-claims living in Bromley could pay just £354.89 a year for a comprehensive policy with Express Insurance that includes a courtesy car, personal accident cover and windscreen cover. By contrast, the same driver could pay £1,008.79 a year with Choice Quote Specialist Insurance clearly emphasising the need to shop around.

What should a leased car driver look for from a car insurance policy?

It`s not just about price, although that is an important consideration. Leased car drivers should also consider the cover options available from various companies. The following options are particularly important when leasing a car:

- Business use
Are you covered for business use of the car or commuting and social use only?

- Fixed cover
Will your policy offer fixed cover for the length of the lease term?

- Guarantee on repairs
Look for a guarantee on repairs for the length of the lease agreement in case the company you lease from spots any problems when you return the vehicle.

- No-claims bonus
Will you be able to build up a no-claims bonus despite not being the registered owner of the vehicle?

- Courtesy car
Most leased car drivers use the vehicle as part of their business which makes a courtesy car paramount in case it is sidelined temporarily.

- Overseas cover
Check to see what level of cover is available if you need to take the vehicle overseas.

Claims process for a leased car driver

- It is your responsibility to get details from third parties and call the insurance company.

- Call your lease company to see if it has any specific requirements – you may need to pass on its details to the insurer or police.

- In case of a write-off, you have to make the deductible payment to the leasing company if the market value is less than the balance – this will be covered if you take out gap insurance.

Ask a car insurance provider about its claims process for leased cars before you buy.

[Please note that the deals quoted were available at the time of writing, 14.02.09, and are subject to change]