Car leasing with insurance

Combining your car leasing with your insurance can mean you've only got one payment to make each month

Dominic Tobin
Mar 22, 2018

Leasing is the simplest, and often cheapest, way of getting behind the wheel of a new car. For one initial payment and a series of fixed monthly instalments, you rent the vehicle for an agreed term and then hand it back at the end.

However, in most cases you’ll need to arrange insurance for yourself, as few car lease deals include the cost of cover.

There are ways of combining finance instalments and your insurance premium, so you’ve only got one payment to make each month. Most of these schemes use Personal Contract Purchase (PCP) finance, which offers low monthly payments - often similar to leasing - because they don’t cover the full cost of the car.

At the end of the agreement, you can return the car with nothing more to pay, as long as you don’t incur damage or excess mileage charges. PCP also offers the alternative option of buying the car at the end of the agreement.

Car leasing with insurance for used cars

Car leasing is most common for new cars, so it’s unlikely to be an option if you’re looking at a cheaper used car.

In this case, PCP finance is available. Your PCP agreement can be combined with a loan that covers the cost of insurance in the first year of owning the car. Your repayments will then cover your finance and insurance, giving you time to save up for your insurance premium in the second year. Some of BuyaCar’s finance partners offer this option. You can find out more details by calling 02800 050 2333.

Car leasing with insurance for new cars

If you’re looking for a new car, there are several options that allow you to combine finance and insurance repayments.

One of the best-known arrangements are Just Add Fuel deals, pioneered by Peugeot and now offered by Citroen and DS.

More details on Just Add fuel

One monthly payment covers the cost of finance, insurance, servicing, breakdown cover and tax. In most months, the only extra cost you’ll have is fuel.

The majority of these schemes are based on PCP finance, so finance payments are kept low, and you’ll be able to return the car at the end. You’ll need to pay more to own it, though.

Volvo now offers a comprehensive lease deal, which includes insurance and plenty more for a monthly payment - but it’s not a bargain option. The Care by Volvo package costs from £629, and includes lease payments, insurance, servicing, tax, replacement tyres and windscreen, plus use of a different Volvo for 14 days a year, if you need a larger car, for example.

It’s available with the XC40 crossover, as well as the forthcoming V60 estate, and is expected to be rolled out across the rest of the Volvo range in future.

Free insurance offers

A better deal than paying for insurance is getting it free, and that’s an option available on certain new cars. You’ll normally have to take out PCP finance rather than leasing the vehicle, but monthly payments are typically affordable

It can represent an enormous saving - particularly for younger drivers - giving more time to save up for the cost of insurance, which you’ll be responsible for from the second year onwards.

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