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    Vehicle Contracts » Guides » Personal Leasing Guides » Insurance Guide

    Car Leasing Insurance

    You probably have some questions about insuring your new car lease arrangement, whether you're new to leasing or a previous customer of Vehicle Contracts. We have put together a useful guide to answer all your concerns and questions.

    According to UK legislation, if you own, rent, or lease a car, you are required to have a fully comprehensive insurance policy in place before you can use it on UK roads and in public areas. This required policy needs to cover the costs of any repairs to your vehicle from any cause of damage. This also includes third-party property in the event of an accident.

    What type of insurance do I need for a car lease?

    If you are obtaining a personal car lease agreement (personal contract hire) then the person whose name is on the lease agreement needs to also appear as the main insurance policyholder or named driver on the insurance certificate. This must be fully comprehensive.

    If you are obtaining a business lease (business contract hire), either the company’s name or the director’s name must feature as the insurance policy holder on the insurance certificate. This must be fully comprehensive.

    When should insurance begin for my car lease?

    We will get in touch with you to set up a delivery date and confirm your vehicle registration once your car has arrived at the dealership and all required inspections have been completed. You can then make arrangements for your car insurance in preparation for the agreed delivery date.

    Your policy must start from the day of delivery and until the finance company picks up your vehicle at the end of the agreement, your new car lease must be insured during the whole of this period. Prior to delivery, you must present proof of insurance; the document must include your name, registration number, and be dated on or before the date of delivery.

    Who is the registered keeper and owner of the vehicle?

    The finance company is the registered owner and keeper of the vehicle for personal contract hire and business contract hire agreements. When setting up your policy, you must inform your insurance company of this.

    How to minimise BIK/company car tax

    If the amount of BIK payable is a concern, there are ways to minimise or avoid paying BIK:

    1. Consider using the car for business use only
    2. Choose a car with a smaller engine or an EV to reduce the BIK payable
    3. Consider taking a car allowance rather than a company car – you won’t have to pay BIK, and you can still expense fuel.

    Discover more about business car leasing in our business car leasing hub here at Vehicle Contracts.