Car leasing with insurance

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

BuyaCar team
Mar 10, 2020

Leasing is a simple way of getting behind the wheel of a new car for a low monthly cost. 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.

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

However, there are ways of combining finance payments and your insurance premium, so there's only one payment to make each month. Most of these schemes use Personal Contract Purchase (PCP) finance, which brings monthly payments that are at a similar level to those of 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 finance also allows you to buy the car at the end.

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.

Used cars are available with PCP finance. Your PCP agreement can often be combined with a loan that covers the cost of insurance in the first year of owning the car. Repayments will then cover your finance and insurance, giving you time to save up for your insurance premium in the second year.

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 under the name SimplyDrive.

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. Many drivers do this and start another agreement, although there's also the option to buy your car for a lump sum, or by refinancing it.

There's also Care By Volvo, which is due to return in the near future after it was discontinued in January. This is a car leasing scheme that includes insurance, servicing and tax within a single monthly payment.

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 whose monthly insurance payments can be more than their car payments. This also gives young people 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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