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Last updated: December 20, 2023

Leased Vehicles Coverage: Will I Pay More?

If you have a leased car, you may be paying more for car insurance.

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When you insure an owned car, you must meet your state’s minimum auto insurance requirements. However, when you insure a leased car, you have to take into account the leasing company’s requirements, which tend to be more extensive than a state’s minimum required coverage.

Leased Vehicles Coverage

Before choosing whether to lease or buy a car, you should understand the insurance portion of the equation.

Do Leases Include Car Insurance?

Most leases do not include auto insurance, so you have to pay for it separately. However, some leases include gap coverage, which covers the gap between the car’s original value and its current value after depreciation. You’ll need to fulfill the rest of the insurance requirements on your own.

Insurance Requirements for a Leased Car

When obtaining insurance for a leased car, you must consider both your state’s and your leasing company’s auto insurance requirements.

State Requirements

The first step is to determine your state’s auto insurance requirements. You can check how much car insurance you need by state in our auto insurance guide. You may be required to buy additional coverage types, such as the following.

There are two states that don’t require auto insurance: Virginia and New Hampshire. However, if you lease a car in one of these states, you’ll still have to buy insurance coverage.

Lessor Requirements

Your leasing company will most likely require you to have both comprehensive and collision coverage as well as gap coverage.

  • Collision coverage: Collision coverage pays for damages to your vehicle in the event of an accident you caused. This differs from property damage coverage, which only covers the other party’s car.
  • Comprehensive insurance: Comprehensive coverage covers damages to your car from events other than collisions, such as burglaries, vandalism, and weather-related incidents like hail.
  • Gap coverage: Gap coverage is typically rolled into lease payments and means that if you total your car, you won’t have to pay the dealer the amount your car has depreciated since its inception.1 In other words, gap coverage covers the vehicle’s depreciation.

Is Insurance for a Leased Car More Expensive?

Given that leasing companies have higher auto insurance requirements than state governments, people with leased cars usually pay more for auto insurance than people with owned cars who only have the minimum coverage.

Factors That Affect Car Insurance Premiums

The types of coverage you have are just one of many factors that affect auto insurance rates. These are some other factors in the cost of auto insurance.

  • Size of the deductible: A higher deductible for collision or comprehensive coverage means lower premiums, and vice versa. Read more about how deductibles work.
  • Vehicle: Your vehicle’s make, model, and year affect its safety ratings, which factor directly into premium costs.
  • Mileage: Those with long commutes and high mileages pay more, as they have more opportunities to incur damages and file claims.
  • Where you live: People in cities pay more for auto insurance than people in the suburbs or the country, as damages are more likely to occur in urban areas.
  • Driving record: People with histories of DUIs, at-fault accidents, and tickets have higher car insurance rates.
  • Credit history: In every state except Massachusetts, Hawaii, Michigan, and California, companies can charge higher premiums to those with bad credit histories. Learn more about the relationship between car insurance and credit scores.
  • Age: First-time drivers pay more than more experienced drivers over the age of 25.
  • Marital status: Married people are less likely to file claims than single people, even those who have been married in the past. Therefore, if you’re married, you’ll pay less for auto insurance than your single counterparts.
  • Sex: In every state except California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania, men pay more for car insurance than women.

How to Lower Your Leased Car Insurance Cost

While some factors fall outside of your control, there are ways you can lower insurance costs, even on leased vehicles.

  1. Compare quotes. Never accept a first offer. Compare auto insurance quotes from different providers to see who can provide the most affordable coverage.
  2. Use discounts. See what auto insurance discounts your provider offers. These could include discounts for taking a defensive driving class or enrolling in automatic billing.
  3. Bundle your insurance. If you also need homeowners, renters, or business insurance, buy it with your auto insurance from the same provider to save money.
  4. Raise your deductible. Higher deductibles have lower rates. Just make sure that you could actually pay your deductible if you were in an accident tomorrow.2

How to Get Insurance for a Leased Car

Follow these steps to get car insurance on a leased car:

  1. Do your research. Find out what coverages both your state and your leasing company require. Determine if you want any supplemental coverages and the limits you’d like for each coverage.
  2. Get quotes. Compare quotes from a few different auto insurance companies before settling on one.
  3. Talk to an agent. Once you’ve settled on a company, contact an agent or broker to help you choose a policy.
  4. Pay your premium. To begin your coverage on the policy’s effective date, pay your first premium.


If you stop paying your premium, you risk a lapse in coverage. Learn how long companies have to notify you of a cancellation or non-renewal under your state’s laws.

Car Subscription Services

We’ve all experienced the shift from one-time payments to subscriptions. It seems like everything has a subscription these days, from TV to food delivery to newspapers. Well, car companies want in, with many now offering subscription services.

With a flat payment, you can rent a car — including insurance, maintenance, and sometimes even roadside assistance — for periods as short as one month. The benefit of car subscription services is that you can more easily trade in your vehicle than with a traditional lease. However, as you’ll see, the negatives (specifically the cost of car subscriptions) typically outweigh the positives.

Available Car Subscription Services

Here are the car subscription services on the market currently.

Car subscription service Manufacturer or third party What’s included Cost Term length
AAA Third party Car, insurance, roadside assistance, maintenance Sedans: $509

SUVs: $579

Electric cars: $449

Book by Cadillac Manufacturer Car, insurance, taxes, maintenance $1,800 plus a $500 initiation fee for first-time use Monthly
Borrow Third party Car, insurance, charging stations (all electric vehicles) BMW i3: $599 per month

Kia Soul EV: $499 per month

Hyundai Ioniq: $579 per month

3 or 6 months
Canvas + Fair (previously Canvas and Fair by Uber) Third party Car, insurance, maintenance, roadside assistance, registration costs Not listed publicly Not listed publicly
Care by Volvo Manufacturer Car, maintenance, insurance, 1,250 miles per month, road hazard protection, excess wear protection, roadside assistance Not listed publicly (no cars available as of Jan. 18, 2022) Monthly
FreshCar (previously Carma Car) Third party Car, insurance, maintenance 500 miles: $499

800 miles: $549

1,200 miles: $599

Genesis Spectrum Manufacturer Car, insurance, maintenance 2019 Genesis G70: $499 per month, $2,699 down

2019 Genesis G80: $579 per month, $3,999 down

2019 Genesis G90: $909 per month, $5,499 down

3 years
Hertz My Car Third party Car, insurance, roadside assistance, maintenance Economy, compact, and midsize vehicles: $599

Small SUVs, trucks, and full-size sedans: $999

Regular SUVs, large trucks, and luxury sedans: $1,399

Additional miles: $0.35 per mile beyond the 2,000-mile monthly limit

Lexus Complete Subscription Manufacturer Car, insurance, maintenance, cleaning, registration, title fees $995, with membership fee of $495 Monthly
Nissan Switch Manufacturer Car, insurance, roadside assistance, taxes, washes, maintenance, cleaning Select Nissan Altima, Rogue, Pathfinder, and Frontier: $699 per month, $495 activation fee

Premium Nissan Altima, Rogue, Pathfinder, Frontier, LEAF, Maxima, Murano, Armada, Titan, and 370Z: $899 per month, $495 activation fee

Porsche Drive Manufacturer Car, insurance, roadside assistance, maintenance, cleaning 1-month subscription: $1,600-$2,950 per month plus tax, $595 activation fee and tax

3-month subscription: $1,950-$2,950 per month plus tax

Monthly or 3 months
Sixt+ Third party Car, registration, maintenance, insurance, sales tax, depreciation $729-$1,339 per month, $199 enrollment fee Monthly
Subscribe With Enterprise Third party Car, insurance, maintenance, roadside assistance $1,499 per month, $250 enrollment fee plus taxes Monthly
Yoyo Third party Car, insurance, maintenance $99 enrollment fee, then either $0.50, $0.75, or $1 per mile (depending on type of car) Per mile

Are Car Subscriptions Worth It?

As you can see from the prices above, car subscriptions are expensive, starting at $499 a month. They often charge high enrollment fees and cost more than leasing a vehicle, even with insurance included. Another negative is that many of these subscription services cap your mileage and make you pay extra for any miles over the limit. Plus, if you have a shaky driving history, you’re unlikely to qualify for a car subscription service in the first place.3

However, if you have cash to spare and want a luxurious and convenient service, then a car subscription service may be right for you. One inexpensive option is Yoyo, which simply charges by the mile. If you need a car for a very short time, this could be an affordable solution.


Research shows that 51% of U.S. auto shoppers would be interested in a vehicle subscription model, but of those interested, over half wouldn’t pay more than $500 a month for one.4


Even though you’ll have to pay more for car insurance, leasing a car vs. buying it outright has its advantages, like lower monthly payments. Plus, if you want to keep the car at the end, you can buy it from your lessor. If money for a buyout is a concern, there’s always auto loans.

Frequently Asked Questions

Learn more about the convergence of leased cars and car insurance below.

What is covered on a leased car?

A leased car typically requires these coverages:

  • Bodily injury coverage
  • Property damage coverage
  • Collision coverage
  • Comprehensive coverage
  • Gap insurance

Do you need full coverage on a leased vehicle?

With most leasing companies, it’s likely that you will need full coverage on a leased vehicle. Full coverage includes liability (bodily injury and property damage coverage), collision, and comprehensive coverage.

What is lease coverage insurance?

Lease coverage insurance is insurance for leased cars. It’s not to be confused with rental car coverage, which means that, in the event that your car is being repaired under a covered claim, your insurance provider will reimburse you for the cost of a rental car.

Are leased vehicles insured?

Leased vehicles are insured with more coverages than the legally required minimum. The leasing companies require their vehicles to be insured with certain coverages and limits, which vary by company.


  1. Insuring a leased car. Insurance Information Institute. (2022).

  2. Is Insurance on a Leased Car More Expensive? Experian. (2020, Sep 4).

  3. Are Car Subscriptions the Next Big Thing? Here’s What to Know Before You Subscribe. Real Simple. (2021, Oct 5).

  4. Study: Pandemic Kicks Auto Shopping Into Digital Overdrive. Adtaxi. (2021, Jun 23).