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Car leasing and insurance
When you lease a car, you pay a monthly fee to use a new or used car for a set period.
Although you don’t own the vehicle outright, you’re responsible for it until the end of your lease contract.
Car insurance isn’t typically included as part of your contract but the leasing company will usually require you to take out insurance to protect their asset.
They may insist on fully comprehensive cover to make sure any vehicle damage you cause is covered, not just damage caused by another driver.
Do I need lease car insurance?
Yes. If you drive a vehicle on the road, it’s a legal requirement to have at least third-party car insurance, and the leasing provider may require you to take out fully comprehensive cover.
You can still shop around for policies, but you must make sure you meet the lease agreement’s insurance requirements so read them carefully.
Top tip: As car insurance is annual and your lease agreement could be for more than a year (two and three year leases are the most popular) you’ll need to remember to renew it each year or find a new policy.
What kind of insurance do I need for a lease car?
Most leasing companies require fully comprehensive car insurance as a condition of the lease agreement, regardless of your preference.
This is the highest level of cover available so if you’re in an accident where you’re at fault it will cover any damage to your car, as well as damage caused by your car. And if your car is written off or stolen, it’ll cover the cost of replacing the car.
With lease cars, whether your car is a personal contract hire or business contract hire will also affect insurance:
Personal contract hire (PCH) agreement – the person taking out the agreement has to be the main policyholder or a named driver on the insurance document
Business contract hire agreement – the company or company director’s name will be on the insurance document
How do I get an insurance quote for a lease car?
Getting an insurance quote for a lease car is the same as getting one for your own car. It’s quick and easy to compare quotes with MoneySuperMarket. Some details you need to provide include:
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Personal details and driving licence
Including your job, age and your address, plus the same for named drivers. We'll also need to know the type of licence you have, how long you've had it, previous claims and driving history.
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Registered keeper of the car
If you've leased a car, the registered keeper will be the car leasing company. As the driver of the car you’ll still need to be the policyholder or named driver depending on the lease type.
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No-claims discount (NCD) history
Details of your no-claims discount will help lower the prices you get. Our no-claims discount tool shows you how many years no-claims discount your insurer will honour.
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What you'll use the car for
Social, commuting or business, and how many miles you’ll do in a year. You can use our annual mileage calculator to help you. You’ll also need to say where you’ll keep the car at night for security.
Will I be covered if I’m in an accident?
As long as you have car insurance, you should be covered. However, the level of cover you'll receive depends on your policy – for example, fully comprehensive cover offers more protection than third-party only.
If you're involved in an accident, get in touch with your insurer as soon as you can.
Our guide What to do after a car accident? has more information.
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Car insurance guides and expert tips
Is lease car insurance more expensive?
No, it shouldn’t be any more expensive to insure a lease car than one you own.
As with insuring your own car, there are several factors that affect the price of your insurance, including your age, your driving history, your job, your address and postcode, the car’s insurance group, and more.
Is insurance included in the leasing contract?
No. Typically, car insurance is not included in the leasing contract. You'll need to buy it separately.
If you have a personal contract hire (PCH) agreement, road tax should be included in the cost of your lease. But always confirm that with the leasing provider.
You usually have the option to add extras to your car lease agreement, including maintenance and servicing. Any add-ons you choose will be added as an extra charge to your monthly payments.
Can other people drive my lease car?
Yes, other people can drive your lease car – as long as they’ve been added as a named driver on your insurance policy and hold a valid UK driving licence.
If they've not been added as a named driver, they need to be insured to drive other cars.
Do I need to tell the insurer that my car is leased?
Yes, your insurer will need to know that your car is leased and they will need your leasing company’s details as it’s the registered keeper of the vehicle.
Do I need GAP insurance for a leased vehicle?
No, you don’t have to take out GAP insurance for a leased vehicle but it can be useful. If your car is written off then GAP, which stands for Guaranteed Asset Protection, pays out the difference between your insurance pay-out and the remaining balance on your lease agreement so you’re not out of pocket.
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Reviewed on 26 Dec 2025 by
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