Things to Consider When Insuring a Lease Vehicle
You might not be aware that although monthly car leasing costs do cover road tax, they don’t usually include car insurance.
It’s the letter of the law in the UK that those who lease a vehicle must have sufficient car leasing insurance in place, such as a fully comprehensive lease vehicle insurance policy.
You might be thinking, “but I don’t own the vehicle, so why should I have to insure it?” Nevertheless, under any personal contract leasing or personal contract purchase arrangement, you still need to be fully insured to drive it. It’s still illegal to get behind the wheel of your leased car without a valid policy.
Insuring your leased vehicle is the right thing to do to protect yourself financially at all times. Ultimately, the principles of insuring a leased car are the same as any other vehicle. You’ll still want to shop around for the best deal. However, there are various things to consider that can help you secure the right level of cover at the right price for you and your leased car:
Choose a lease car in the right car insurance group for your budget
You might not be aware that all road vehicles in the UK are now categorised into groups for car insurance purposes. There are 50 different groups, with the vehicles in the highest group (Group 50) deemed the most expensive to insure.
How is each lease vehicle model grouped? An independent panel of experts from the insurance industry come together to make a collective decision based on a range of factors, including the value of parts, the vehicle’s performance and its safety features.
It’s probably best to familiarise yourself with these car insurance groups first before setting your heart on a lease vehicle that might be out of your budget.
Here are some examples of cars with a low insurance group:
- MPG: 58.40
- Insurance Group: 1
- Number of doors: 5
- 0-62mph (secs): 9.50
Ford Fiesta Hatchback
- MPG: 55.40
- Insurance group: 5
- Number of doors: 3/5
- 0-62mph (secs): 13.80
Is it worth insuring an additional driver?
In some cases, it can save you money on your premiums just by adding another named driver to your policy. The addition of another experienced driver without a history of insurance claims can help spread the risk in the eyes of insurers.
Just be careful when you’re adding younger drivers or those with professions that may be deemed riskier in the eyes of insurers, as this could incur a rise in your lease vehicle insurance, as opposed to a decline.
Weighing up the need for Guaranteed Asset Protection (GAP) insurance
GAP insurance has become an increasingly popular insurance product for brand-new lease vehicles. That’s because GAP insurance upholds the value of the car when you leased it as new. That is very important, as most new models will depreciate heavily in value during the first couple of years of use. It’s a sensible policy to have in place should you damage your car beyond repair and the insurance company values it as much lower than it should be. It saves you having to cover the difference.
Could a black box help to limit monthly premiums?
A ‘black box’ is a telematics device that will monitor how you drive your vehicle in terms of efficiency and safety. These can prove particularly beneficial for young or newly-qualified drivers seeking validation for the reliability of their driving. Some insurers will offer lease vehicle insurance policies on a sliding scale for black-box drivers, reducing premiums as a reward for safe, consistent driving.
The importance of securing your new lease vehicle
The better the security features of your new lease car, the better your chance of reducing your car insurance premiums. Most brand-new models at Rivervale Leasing come with factory-fitted alarms, immobilisers and even tracking devices, so be sure to make prospective insurers aware of these features when seeking quotations.
It’s also wise to store your vehicle in your garage overnight if you have one. That’s because insurers will view this as a more secure location than the same vehicle that’s parked overnight on a busy road.
Annual Vs monthly lease vehicle insurance premiums
It might be a significant financial commitment, but if it’s at all possible to pay for your lease car insurance in one go, it could save you a bundle of cash. That’s because monthly premiums paid via direct debit will incur interest, resulting in you paying more for exactly the same product as others that pay in one lump sum.
Are you thinking of dipping your toes into the exciting world of car leasing for the first time? At Rivervale Leasing, our car leasing experts can guide you through the entire process and help you find the right vehicle at the right price for your unique circumstances.
As the UK’s first car leasing dealership – specialising in vehicle leasing since 2001 – you can rely on us to specify brand-new models at the most competitive leasing prices.
Call us today for an initial consultation on 01273 433 480, or request a callback at a time that suits you.
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