Is insurance included when you lease a car?
Updated August 2026 · 3 min read
Standard car leasing and hire do not include insurance — you arrange your own cover before you drive. Road tax, warranty and breakdown are usually included, but insurance is separate unless you choose an all-inclusive car subscription. Always budget insurance as a cost on top of the monthly.
The short answer: usually not
With standard leasing (PCH) and most short-term hire, insurance is not included — you take out your own policy before the car goes on the road, exactly as you would with a car you owned. What is included as standard is road tax for the term, the manufacturer warranty and breakdown cover. So the monthly you are quoted covers the car, not the cover — plan for insurance as a separate line in your budget.
When is insurance included?
The main exception is a car subscription, where insurance, servicing and road tax are typically bundled into one monthly fee. A handful of short-term hire products aimed at younger or newer drivers also include cover. It is convenient and predictable, but you pay a premium for the all-in-one bill. If a deal says "insurance included", check exactly who is named, the excess, and any mileage or driver limits.
What insurance do you need to lease a car?
You need at least a fully comprehensive policy in almost every case — leasing companies and hire partners generally require comprehensive cover, not third-party, because the car is not yours to write off. The car must be insured in the name of the main driver on the agreement. Tell your insurer it is a leased or hired vehicle so the policy is set up correctly, and make sure the cover starts from the day you take delivery.
How much should you budget for insurance?
It varies enormously by age, postcode, car group and history, so get a quote for the specific car before you commit to the monthly. For younger and newly-passed drivers insurance is frequently the bigger of the two costs, so it is worth pricing first and letting it steer which car you choose. A cheaper insurance group can save you far more over a year than shaving a little off the monthly.
A tip that saves money: check the insurance group first
Before you fall for a particular car, look up its insurance group (1 is cheapest, 50 the priciest) and get a quick quote. Two cars at a similar monthly can have wildly different insurance costs. Factoring that in from the start is the single easiest way to keep your total monthly motoring cost down — and it is exactly the kind of thing we will talk through when you tell us your budget.
FAQs
Is insurance included in a car lease?
No, not with standard leasing (PCH) or most short-term hire — you arrange your own comprehensive policy. Road tax, warranty and breakdown are included, but insurance is a separate cost you budget on top of the monthly.
What type of insurance do I need for a leased car?
Almost always fully comprehensive cover, in the name of the main driver on the agreement. Third-party only is usually not accepted, because the car belongs to the leasing company or hire partner, not to you.
Which leasing option includes insurance?
Car subscription is the main one — insurance, servicing and road tax are typically bundled into a single monthly fee. Some short-term hire products for younger drivers also include cover. You pay more for the convenience.
Can I insure a car I'm hiring on my existing policy?
You will normally need a policy that specifically covers the leased or hired vehicle, set up in your name. Tell your insurer it is a leased or hired car so the cover is correct, and make sure it is live from the delivery date.
Why is insurance separate from the lease cost?
Keeping insurance out lets the leasing company quote a lower headline monthly and lets you shop around for the best premium for your circumstances. Bundled cover, as with a subscription, is convenient but usually costs more overall.
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