When you lease a car, you borrow the vehicle for the lease term, which typically lasts two or three years. There are many benefits to leasing, including:
- Regularly getting a new vehicle
- Little or no down payment needed
- Lower repair costs, since the car will remain under warranty for the length of the lease
- Savings on sales tax
- Getting a nicer car for lower monthly payments
However, you won’t own the vehicle when your car lease is up. There are also additional insurance requirements for leased cars and cars that are purchased with financing. Typically, the insurer requires more robust coverage than the state minimum.
Since you’ll likely need collision coverage and comprehensive coverage for your leased car, you’ll want to compare insurance premiums for these coverage types. Insurify offers an easy way to compare customized insurance quotes apples-to-apples so you can ensure you’ll get the lowest possible insurance rate. You just need to enter your information once, and you’ll be able to see premiums from up to 20 different insurance providers.
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Buying Insurance for Your Leased Car
While some leasing companies include gap insurance in the lease agreement to protect you if the car is totaled, you will still need to purchase regular auto insurance for your leased car.
All states, except New Hampshire and Virginia, legally require that drivers hold a car insurance policy. State minimum coverage amounts vary, but most states require bodily injury and property damage liability coverage. These cover damage to the other driver’s person or property if you are at fault in an accident.
Some states also require uninsured and underinsured motorist coverage, which protects you if an uninsured driver causes an accident resulting in damage to your property or medical expenses. And 12 states require personal injury protection, which helps cover your medical bills after an accident, regardless of fault.
Full insurance coverage includes more protections if your vehicle is damaged. These include:
- Collision coverage: helps pay for damage to your vehicle from a car accident.
- Comprehensive coverage: covers repairs on a vehicle that has been damaged by theft, vandalism, hail, or other non-collision accidents.
- Liability coverage: Helps cover damage to a third parties’ property (property damage liability) or pay for medical expenses (bodily injury liability).
A comprehensive plan like the above isn’t the only type of coverage available to you; insurance companies will typically offer many different additional coverage options and add-ons to a policy. And if you purchase a used or new car outright, these coverages are optional.
But many lenders (also known as lessors) and most leasing companies require that you purchase collision insurance and comprehensive insurance in addition to liability insurance. Some leasing companies also require higher limits and place a cap on your deductible, which can drive up your premium cost.
If gap coverage is not included in your lease contract or car payment, you should purchase it through your insurance company. That’s because leased cars begin to depreciate the moment you drive away from the dealership. If your vehicle is considered a total loss after an accident, your insurance provider will only pay your car’s actual cash value. Because of depreciation, the value of the car is often less than the price you paid at the dealership. If you took out an auto loan instead of making a down payment and still have a lot of time left on your lease, you could owe more in lease payments than your insurance company will provide. Gap insurance is intended to pay for the difference.
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How much is car insurance coverage for a leased car?
According to Insurify’s comprehensive database––composed of over four million car insurance quotes––drivers of leased cars pay an average total premium of $275, compared to just $156 for drivers of owned cars.
Insurance costs for leased cars are typically higher, but that’s not because insurance companies charge more to cover leased vehicles. Rather, leasing companies have car insurance requirements that drive up the cost of your annual premium. Not only do leasing companies typically require that your insurance covers comprehensive and collision coverage, but they also impose higher coverage limits and a maximum deductible.
Usually, leasing companies require that you have at least $100,000 per person and $300,000 per occurrence in liability coverage, in addition to at least $50,000 in property liability coverage. That’s significantly higher than the state minimum requirements.
While you’ll pay more for insurance coverage on a leased vehicle, the good news is that you’ll get more protection in return. And there’s an easy way to compare insurance rates side by side, so you might find that insuring your leased car is more affordable than you thought.
Struggling with the high cost of insurance or your cay payments? With Insurify, you can select the coverage amounts that fulfill your leasing company’s requirements and view personalized quotes from different providers side by side. Our tool will even factor in any discounts you’re eligible for. And it’s totally free to use, so there’s no reason not to check it out and find the lowers possible auto insurance rate.
MORE >>> Auto Insurance Comparison Sites
How much does car insurance for a leased car cost in my state?
The average cost for car insurance for leased cars across all fifty states is $289, according to Insurify.
Check out the chart below, which illustrates the average monthly car insurance premiums in all fifty states for drivers of leased cars, using proprietary Insurify data from millions of unique driver quotes. While leased cars may cost more to insure on average than owned cars, just how much more varies from state to state, thanks to a variety of different factors.
Find Cheap Insurance for Leased Cars in Minutes
If you’re looking for an auto insurance policy that meets your leasing company or finance company’s requirements, Insurify can help. It just takes a few minutes to answer some questions about your vehicle and driving history so that we can provide accurate quotes.
There’s no Social Security number required and no obligation to purchase. Plus, it’s free to compare quotes from up to 20 providers in one place––and whether you’re interested in full coverage or a state minimum plan, you can customize your policy to suit your needs. If you need car insurance for your lease, Insurify is a great place to start. You can compare car insurance or homeowners insurance quotes in a matter of minutes!
FAQ: Leased car insurance
Is insurance included when you lease a car?
Some leasing companies include gap coverage in your monthly lease payments. But leased cars don’t automatically come with a car insurance policy; you’ll need to purchase one that meets an insurance provider’s requirements.
Do you need gap insurance for a leased car?
Yes. Leasing companies require gap insurance, and many include gap insurance in your lease contract. If gap insurance is not included in your monthly lease payment, you’ll need to add it to your insurance policy.
How much is Uber insurance for driving a leased car?
Expect high premiums if you’re insuring a leased car for business use. Rideshare insurance can increase your insurance costs by up to 25 percent. And your leasing company will have requirements for the amount and type of coverage you’ll need as well. To avoid paying high costs, be sure to compare quotes with an online comparison tool like Insurify.