Motor insurance is a legal requirement for any car owner and driver on UK roads. If you drive without insurance then you face a fine of up to £1,000 and the risk of having your car seized and destroyed by the government.
It can cover you in the event that the vehicle is stolen, vandalised, catches fire or is involved in an accident. Depending on the type of insurance you opt for it can also cover any injuries sustained if involved in an accident, legal costs and damage to any third-party property or persons.
When you lease a vehicle it will still be your responsibility to insure the vehicle though there are some differences between arranging insurance for a lease vehicle and arranging insurance for one you own outright. The insurance will not be included by the funder as part of the lease agreement.
Types of Insurance
As mentioned above there are different levels of insurance you can get for your car. There are three main levels:
Within the three levels there are a number of different kind of policies that you might consider, for example, there’s multi-car policies that allow households to claim a discount for insuring multiple vehicles, young driver insurance designed specifically for young drivers to help with the usual high costs associated with their higher risk and even short-term insurance.
Comprehensive Car Insurance
Comprehensive or fully comp insurance is the highest level of insurance that you can opt for.
It covers you, your car, your passengers and property as well as any third parties that are involved in an accident. It also protects the vehicle in the event of vandalism or theft.
Some comprehensive policies also cover you for driving other vehicles but not all of them so you should always check your policy before driving another vehicle.
Third Party, Fire and Theft
This is the middle level of insurance and covers any third parties involved in an accident as well as your car if it is stolen or damaged by fire. It will not cover any damage to your vehicle if you are involved in an accident or vandalised in any way.
Third-party insurance cover is the most basic car insurance you can have, and this only covers and injury to third parties or third-party property if you are involved in an accident.
This is the minimum level of insurance that is required when driving in the UK.
How to Insure a Lease Car
As mentioned above there are some differences between insuring a vehicle you purchase and insuring one you are leasing.
The first thing you need to be aware of is that a lease vehicle is not usually registered until the day of, or day before, delivery. This means that most insurance providers will not be able to locate the vehicle by searching the registration on the DVLA’s database as they can take a couple of days after registration to appear.
They will be able to provide you with an insurance quote and insure the vehicle based on other information on the vehicle specification which we can provide you with if you are leasing through Car Lease Special Offers.
If you are leasing a vehicle that is pre-registered then this should not be an issue for you as the vehicle will be showing on the DVLA’s database.
Who’s the Owner and Keeper of a Lease Vehicle?
As they own the vehicle your lease funder will be the registered owner of the vehicle. You will need to provide your insurance provider with their registered name and if you are unsure of the full business name please get in touch with us on 01722 322 888 or firstname.lastname@example.org and we can confirm this for you.
Although you will be driving the vehicle the registered keeper will also be the lease funder and you will need to advise your insurance provider of this as it may affect the policy they are able to offer you.
Will I Need to Provide You or the Funder with Proof of Insurance?
You will not need usually need to provide us with proof that the vehicle is insured.
The only exception for this will be if your vehicle is on a fleet insurance policy as some of our funders will ask for proof of insurance as they cannot find it on the DVLA’s system and need the vehicle to be insured before they can set it live on their system.
There may be circumstances when your lease provider will ask for proof of your vehicle insurance during the lease, for example if you plan on going abroad with the car but you will not need to provide it for most of the lease.
Do I Need GAP Insurance?
When you lease a vehicle you might be asked if you want to take out GAP insurance as well. This is separate to your usual insurance and is not necessary for you to have.
GAP insurance only comes into play if the vehicle is written off or stolen and unrecoverable and there is a difference between the amount your insurance company pays out and the amount that is remaining on your lease payments and expected by the funder.
For more information on GAP insurance have a look at this guide.
Private Registrations and Lease Car Insurance
You can add your personalised number plate to a lease vehicle however for most funders this cannot be done until after the vehicle has been delivered and on their system. This is to avoid complications and delays with delivery to you.
Because you will change the registration number you will need to insure the vehicle on the registration it is originally delivered on and then once your funder confirms the new registration has been updated you will need to amend this with your insurance provider.