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.
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 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.
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 damage 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.
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 Xcite Car Leasing.
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.
Another thing to be mindful of is that most funders will require you to have comprehensive cover, and it will usually be stated in the contract you sign. This means you must have fully comprehensive cover or you will be breaking the terms of your lease agreement.
As mentioned, it’s a legal requirement for any driver on UK roads to insure their car, but in addition to following the law there are also some more benefits to insuring your leased car, including:
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 0330 221 0000 or support@xcitecarleasing.co.uk and we can confirm this for you.
Although you will be driving the vehicle the registered keeper will usually 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.
You will not need usually need to provide us with proof that the vehicle is insured. The most common 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.
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 have a look at our GAP insurance guide.
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.
There are a few steps you can take to help you get the best deal on your car insurance, such as:
Yes, you will need to insure your new leased car. You’ll be required to have comprehensive insurance in place before we’re able to organise the delivery of the car to you.
The cost of insuring your new lease car will depend on the type of car that you have leased, as well as some personal information about you, such as your age, driving history, where you live and the type of insurance that you’ve gone for. We can’t give an exact figure on how much you can expect to pay, as it will depend on a combination of all the factors listed above.
As well as the aforementioned factors like your age, driving history, where you live and the type of insurance that you’ve gone for, the following can also affect how much you pay for insurance:
It is a legal requirement for drivers in the UK to insure their car, and not doing so means you could also be criminally charged for driving without insurance. There would also be the issue of the leasing company suing you for any damage to the car if you don’t have the correct insurance as per the agreement you sign.
The ability to transfer your existing insurance policy to a leased car varies depending on your insurance provider. Certain insurers permit policy transfer, allowing you to maintain your current coverage. However, other providers may necessitate modifications to your policy or the acquisition of a new one specifically tailored for the leased vehicle. To be certain of your situation, it is advisable to contact your insurance company and discuss your options.
In the event of an accident, it is important to follow the established protocols for reporting the incident to both the authorities and your insurance company. Furthermore, it is crucial to inform your leasing company about the accident as they may have specific guidelines and prerequisites concerning the repair process. By adhering to these steps, you can ensure that all necessary parties are informed and that the appropriate procedures are followed.
For more information, you can read our guide on what to do after an accident.
Check out one of our helpful guides or our explaination of leasing to get all your questions answered.
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