Yes, insurance is typically more expensive for a leased car than for a car you own outright. The primary reason is that leasing companies require you to carry much higher levels of coverage to protect their financial interest in the vehicle. Since the leasing company (the lessor) technically owns the car, they mandate specific insurance terms in the contract to minimize their risk.
Why Leased Car Insurance Costs More
The core requirement is higher liability limits and additional coverages. While your state mandates minimum liability insurance, leasing companies often require limits of 100/300/100. This means:
- $100,000 for bodily injury per person.
- $300,000 for total bodily injury per accident.
- $100,000 for property damage.
Furthermore, you are almost always required to carry both comprehensive and collision insurance with a low deductible, often as low as $500. These coverages protect against damage to the leased vehicle itself from accidents, theft, vandalism, or natural disasters. The leasing company may also require gap insurance, which covers the difference between the car's actual cash value and the amount you still owe on the lease if it's totaled.
Comparing Coverage Requirements
| Insurance Coverage Type | Typical Leased Car Requirement | Typical Owned Car Requirement (Paid Off) |
|---|
| Bodily Injury Liability | 100/300 | State Minimum (e.g., 25/50) |
| Property Damage Liability | $100,000 | State Minimum (e.g., $25,000) |
| Comprehensive | Required ($500 deductible common) | Optional |
| Collision | Required ($500 deductible common) | Optional |
| Gap Insurance | Often required or included | Not applicable |
Managing the Cost
To mitigate the higher premiums, shop around for quotes from multiple insurers before you sign the lease. You can also opt for a slightly higher deductible if the leasing agreement allows, though this is often capped. Maintaining a clean driving record is the most effective long-term strategy to keep your rates lower.
