When you lease a car does it include insurance?

Leasing a car does not include insurance. You will be responsible for finding leased car auto insurance on your own. In fact, you will be required to maintain certain levels of insurance coverage when leasing a car that often goes beyond the minimum state requirements. Read our guide to learn more and compare free leased car insurance quotes online.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 30, 2020

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Here's what you need to know...

  • Leased cars do not come with insurance
  • If there is insurance on the leased vehicle, it is designed to protect the dealership, not you
  • You will need to purchase liability, collision, and comprehensive insurance before you drive your new leased vehicle off the dealer lot
  • You will want to consider adding gap insurance to further financially protect yourself
  • A comparison tool can help you find a car insurance policy that will meet all your needs and keep you in compliance with your lease agreement

When you lease a car, it does not come with insurance, and you will be required to purchase car insurance for your new leased car. In many cases, you will need to have your insurance policy before driving off the dealership lot.

Once you know the specifics of the car you are going to lease, you should use a comparison tool to help you find a car insurance policy you can afford.

You can start your search for car insurance today by entering your zip code into the FREE tool above!

Leased Cars


A leased car is essentially a vehicle you rent from your local auto dealership. Drivers have many reasons for agreeing to long term rentals from car dealerships, including driving a new car every few years and not having to worry about selling the car before upgrading to a new car.

However, it is important to understand that your monthly lease payment does not include everything.

You will be responsible for any up-front leasing fees, middle contract leasing fees and additional fees when you turn in your vehicle.

You must purchase car insurance for your leased car, and you may not be able to just purchase liability insurance. Instead, the dealership may require you to purchase liability, comprehensive, and collision car insurance.

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Leased Car Auto Insurance

Because the dealership still legally owns your vehicle, you will be required to purchase car insurance, and the insurance may need to include higher than normal limits.

This is because car dealerships often require repairs to be made with factory parts instead of aftermarket parts or used parts that the auto shop might find in a junkyard.

  • Liability – Liability insurance protects the other driver’s assets and pays for any medical care for injuries if you cause an accident in your leased vehicle. This type of insurance is required for all drivers, regardless of the age or financing status of their vehicles.
  • Collision – Collision insurance pays for the damages to your vehicle and any injuries you sustained in the multi-car or single-car accident or incident. This type of coverage comes with a deductible, and your dealership may have limits on how high you can set your deductible.
  • Comprehensive – Comprehensive insurance coverage is designed to repair or replace your vehicle if it were to get damaged while you were not driving it. This type of insurance coverage may or may not have a deductible. It depends on your policy.

At a bare minimum, your car dealership will require these three insurance types, which is often referred to as full coverage car insurance.

This is to ensure that if your vehicle gets damaged at any point during your lease it will be repaired according to the manufacture’s specifications and with original parts from the manufacturer.

After the repairs are made, the vehicle should look and drive exactly as it did before the accident.

Gap Insurance

You may or may not be required to have gap insurance. If you are not required to have gap insurance, you should seriously consider it.

Gap insurance pays the difference between your car’s value at the time of your accident and the amount still owed on your lease agreement if you are in an accident that results in the total loss of the vehicle.

For example, if you owned your leased vehicle for one year of your three-year lease agreement and got into an accident which caused your car to be deemed totaled, your insurance company would pay the value of the car at the time of the accident.

If your vehicle was worth $10,000 at the time of the accident, that would be the amount your insurance company would pay.

If you still owed $15,000 on your leased vehicle, you would be short $5,000 without gap insurance.

Reasons to Consider Gap Insurance


If you meet certain criteria, you should use a comparison tool to find an affordable gap insurance policy.

  • Consider purchasing gap insurance if you plan to drive more than the originally allotted miles per year, which would cause your vehicle to depreciate faster.
  • You didn’t put any money on your down payment, or the money you used for your down payment was extremely low.
  • The vehicle you plan to lease has a rapid depreciation rate once you leave the dealer lot.

If you plan to lease a vehicle, you should talk to a representative or car salesman at your local dealership and ask a lot of questions in regards to what comes with your monthly lease payment.

Once you’ve chosen a vehicle and mostly finalized the paperwork, you will need to purchase an insurance policy that includes gap insurance.

To purchase your policy, you can use a comparison tool. This will allow you to research various policies and test several scenarios to ensure you get the best coverage for your money. Before you pick up your vehicle, you will need to have an active insurance policy on that vehicle.

Compare car insurance policies from multiple companies in your area today by entering your zip code below!


  1. http://www.financialsamurai.com/six-things-you-should-know-about-a-car-lease-insurance/
  2. https://www.consumer.ftc.gov/articles/0056-understanding-vehicle-financing
  3. http://www.iii.org/article/insuring-leased-car
  4. http://www.investopedia.com/terms/g/gapinsurance.asp?layout=infini&v=5A&orig=1&adtest=5A
  5. http://cars.about.com/od/buyingadvice/a/gap_insurance.htm

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