Updated: June 30, 2025
Advertising & Editorial Disclosure
USAA has the lowest rate for leased cars, but its policies are only available to military families. GEICO is the cheapest among the widely available insurers.
Most car leasing companies require full coverage car insurance, including liability, collision and comprehensive coverages, and may require higher liability limits than the state minimum.
You can save on leased car insurance by increasing deductibles, bundling policies and applying discounts. Shopping around is key to finding the best rates.
At an average of $1,223 per year, GEICO's full coverage auto insurance is the cheapest coverage for leased cars among the companies MoneyGeek surveyed. Active-duty and retired military members can get USAA's coverage for as low as $899 annually. Full coverage insurance is best for leased cars since most lessors require liability, comprehensive and collision coverages.
| USAA | $75 | $899 |
| GEICO | $102 | $1,223 |
| Travelers | $108 | $1,298 |
| State Farm | $137 | $1,643 |
| Nationwide | $140 | $1,686 |
| Progressive | $145 | $1,735 |
| Farmers | $162 | $1,946 |
| Allstate | $167 | $2,006 |
*Note: USAA is exclusive to active-duty military members, veterans and their families.
Car insurance costs may vary by location, so the cheapest option will differ. Check the table below to see the company with the cheapest leased car insurance in your area.
| Alabama | Country Financial | $71 | $846 |
| Alaska | GEICO | $88 | $1,053 |
| Arizona | Travelers | $98 | $1,177 |
| Arkansas | Travelers | $83 | $1,001 |
| California | CSAA | $33 | $400 |
| Colorado | American National P&C | $75 | $899 |
| Connecticut | GEICO | $87 | $1,048 |
| Delaware | GEICO | $113 | $1,357 |
| District of Columbia | Erie | $110 | $1,314 |
| Florida | Travelers | $126 | $1,518 |
| Georgia | Country Financial | $111 | $1,333 |
| Hawaii | GEICO | $59 | $710 |
| Idaho | GEICO | $54 | $650 |
| Illinois | GEICO | $82 | $982 |
| Indiana | GEICO | $62 | $748 |
| Iowa | Travelers | $66 | $788 |
| Kansas | GEICO | $83 | $996 |
| Kentucky | GEICO | $86 | $1,029 |
| Louisiana | Louisiana Farm Bureau | $93 | $1,112 |
| Maine | Travelers | $53 | $638 |
| Maryland | GEICO | $100 | $1,194 |
| Massachusetts | GEICO | $113 | $1,355 |
| Michigan | GEICO | $88 | $1,051 |
| Minnesota | Auto-Owners Insurance Co | $97 | $1,164 |
| Mississippi | Direct General Insurance | $56 | $673 |
| Missouri | Travelers | $90 | $1,085 |
| Montana | State Farm | $72 | $864 |
| Nebraska | Farmers Mutual of Nebraska | $77 | $922 |
| Nevada | Country Financial | $128 | $1,542 |
| New Hampshire | GEICO | $56 | $673 |
| New Jersey | Plymouth Rock Assurance | $122 | $1,464 |
| New Mexico | Progressive | $97 | $1,167 |
| New York | Progressive | $116 | $1,392 |
| North Carolina | State Farm | $69 | $828 |
| North Dakota | American Family | $68 | $817 |
| Ohio | Auto-Owners Insurance Co | $71 | $852 |
| Oklahoma | GEICO | $75 | $900 |
| Oregon | GEICO | $101 | $1,218 |
| Pennsylvania | Travelers | $76 | $916 |
| Rhode Island | Travelers | $91 | $1,095 |
| South Carolina | American National P&C | $64 | $772 |
| South Dakota | Farmers Mutual of Nebraska | $59 | $702 |
| Tennessee | Travelers | $80 | $961 |
| Texas | State Farm | $95 | $1,142 |
| Utah | GEICO | $78 | $938 |
| Vermont | State Farm | $61 | $729 |
| Virginia | Travelers | $70 | $844 |
| Washington | American Family | $95 | $1,137 |
| West Virginia | Erie | $116 | $1,390 |
| Wisconsin | GEICO | $62 | $746 |
| Wyoming | State Farm | $73 | $877 |
In most cases, you'd need higher liability limits and full coverage to meet your car lessor's requirements. Understanding the requirements and exploring different cost-saving strategies can help you find the best car insurance for your leased car without overpaying.
While insuring a leased car may be costly, especially if you're used to state minimum policies, there are ways to find the best car insurance quotes. Strategic approaches can help you save while meeting your lessor's requirements.
Comparing quotes from multiple providers can help you find the best rates. Because insurers calculate premiums differently, switching car insurance providers may save you money. Get at least three quotes and compare them based on cost, discounts, reviews and perks.
Your collision and comprehensive deductible is the amount that you pay out of pocket after an at-fault accident before your insurance covers the rest. Higher deductibles mean lower monthly premiums. You'll pay more upfront if you file a claim, but most leasing companies cap deductibles at $1,000 anyway. If you rarely file claims, this simple switch can save you hundreds per year.
Lessors often require full coverage, including comprehensive, collision and higher liability limits. While minimum liability coverage usually isn't an option, you can adjust other coverages to save money. For instance, consider dropping optional add-ons like roadside assistance or rental car reimbursement if your lessor doesn't require them.
Bundle your auto insurance with home, renters or other policies from the same insurer. Multi-policy discounts can provide substantial savings and simplify your insurance management with a single provider for multiple coverage types.
Many insurers offer usage-based insurance programs that monitor your driving habits through mobile apps or devices. Safe drivers can earn discounts based on factors like smooth braking, safe speeds and limited night driving.
Take advantage of discounts that apply to your situation, such as good student discounts for young drivers maintaining high grades, military discounts for active duty and veterans, or professional organization discounts through your employer or associations.
Many insurers provide discounts for completing approved defensive driving courses. These can help refresh your skills and reduce your premiums. The discount often applies for multiple years.
Many insurers look at credit scores when calculating car insurance premiums. Lower scores often result in higher rates. To improve your score and secure lower premiums, pay your bills on time, reduce your debt and regularly check your credit report for errors.
Insurance rates can vary based on when you purchase coverage. Avoid buying insurance at the last minute, as you can miss out on advance purchase discounts. Additionally, consider the timing of your lease start date because some insurers offer better rates at certain times of the year.
If you haven't yet selected your leased vehicle, consider how different models affect insurance costs. Vehicles with better safety ratings, lower theft rates and cheaper repair costs have lower premiums. Research insurance costs for different models before making your final lease decision.
Full coverage insurance is often required to protect the lessor's investment when you're leasing a car. This includes liability, comprehensive and collision coverages, ensuring the vehicle is covered in case of damage. Some lessors also require uninsured/underinsured motorist coverage, personal injury protection (PIP) or gap insurance for added financial protection.
Leased car insurance requirements are more comprehensive than typical auto insurance because the leasing company owns the vehicle and needs maximum financial protection. Understanding these requirements helps you choose the right coverage and avoid lease agreement violations.
Required Coverage | Description |
|---|---|
Liability Coverage | Covers bodily injury liability and property damage liability. Bodily injury covers the injuries of the other driver and the other car's passengers, while property damage covers the damage to the other driver's vehicle. |
Comprehensive coverage | Pays for your car's damage in case of an accident that isn't caused by collisions with other vehicles, such as theft, vandalism, natural disasters, fires and more |
Collision coverage | Pays for damage to your car caused in an accident involving another vehicle or an object, such as a tree, fence or light pole. Collision also covers rollover accidents and pothole damage. |
Uninsured and underinsured motorist coverage | Pays for damage to your vehicle if you're in an accident with an uninsured driver or a driver without enough coverage to cover your damage and injuries. It may be required in some states in addition to minimum coverage. |
Personal injury protection | Pays for your medical bills and those of your passengers if you're in an accident. It may also be required in some states. |
Gap insurance | Covers the difference between the value of a car and what you owe on it. |
Before leasing a car, get full coverage insurance in addition to your state’s minimum requirements. This protects the lessor’s investment because comprehensive and collision coverages pay for car damage. Some lessors may also require higher liability limits.
Leasing companies usually require higher liability limits than your state's minimum requirements to protect against costly lawsuits and property damage claims.
Standard Leased Car Liability Requirements:
Why Higher Limits Are Required: Most states require much lower minimums, but leasing companies need additional protection because they have a financial interest in expensive, newer vehicles. Higher liability limits protect both you and the lessor from insufficient coverage in serious accidents.
Collision coverage is mandatory for all leased vehicles because it protects the lessor's investment when your car is damaged in an accident.
What Collision Coverage Includes:
Deductible Restrictions: Unlike owned vehicles where you can choose any deductible, leased cars have restrictions:
Claims Process: When you file a collision claim on a leased vehicle, the leasing company must be involved in repair decisions since they own the car. You're still responsible for paying your deductible.
Comprehensive coverage protects against non-collision damage and is required by virtually all leasing companies to safeguard their vehicle investment.
What Comprehensive Coverage Protects:
Coverage Limits and Deductibles:
Why It's Required: Comprehensive coverage ensures the leasing company can recover its investment if the vehicle is stolen or damaged by covered perils. Without it, you'd be responsible for the full remaining lease balance, even if the car is totaled by theft or natural disaster.
Many lessors require gap insurance to cover the difference between what you owe on a leased car and its actual cash value (ACV) if it's stolen or totaled. Gap insurance pays the remaining lease balance if your standard insurance payout isn't enough.
Standard policies cover only the ACV, which can be less than your lease balance, leaving you to pay the difference. Even if not required, gap insurance is a good option if your lease balance is higher than the car's value, especially early in the lease when depreciation is highest.
New cars depreciate rapidly, often losing substantial value in the first year and continuing to decline throughout the lease term. Since you're paying for depreciation during your lease period, you can owe more than the car is worth for most of your lease. This gap is largest early in the lease when depreciation is steepest and on vehicles with high depreciation rates.
Gap insurance becomes less necessary as your lease balance approaches the car's actual value, usually in the final portion of your lease term. You can purchase gap insurance from your current insurer or through the dealer, with each option offering different benefits and costs.
Leasing a car usually requires higher insurance premiums than buying because the leasing company owns the car and wants comprehensive protection. These cost differences can affect your monthly budget, so compare both scenarios before deciding.
Vehicle Status | Coverage Requirements | Best For |
|---|---|---|
Leased |
| Drivers who
|
Owned |
| Drivers who
|
The lessor must be listed as "loss payee" on your policy to receive claim payments if the car is totaled.
If you're used to paying for minimum coverage, car insurance for a leased vehicle may seem more expensive because lessors often require full coverage. However, it comes with more protection, including liability, comprehensive and collision coverages.
Full Coverage Insurance vs. Minimum Coverage
Full coverage costs about 98% more than minimum coverage, increasing your annual premium by around $936.
Full coverage insurance: $1,895 annual premium
Minimum coverage insurance: $959 annual premium
If you want to know how much you need to pay, use our car insurance calculator.
MoneyGeek's car insurance calculator will give you a customized estimate of your auto insurance cost. It's free to use, requires no personal information and we won't send you any spam.
Rates updated:
Jun 30, 2025
| Insurance Carrier | MoneyGeek ScoreMG Score | Average Monthly Payment | |
|---|---|---|---|
| 1 |  Capital Insurance Group | 94 /of 100 | $87 |
| 2 |  GEICO | 82 /of 100 | $109 |
| 3 | 83 /of 100 | $118 | |
| 4 | 83 /of 100 | $129 | |
| 5 | 79 /of 100 | $133 | |
| 6 | 77 /of 100 | $151 |
Although MoneyGeek partners with some of the companies we recommend, our content is written and reviewed by an independent team of writers, editors and licensed agents. Learn more about our editorial policies and expert editorial team.
You can cancel your car insurance policy when your lease ends. However, if you plan to extend the lease, lease a new car or buy the leased car, update your policy and inform your provider.
If you extend your car lease, keep your insurance policy active and notify your insurer to make necessary adjustments. Letting your policy lapse could result in the lessor repossessing the car.
If you lease a new car or switch lessors, inform your insurer. Your costs may change depending on the car, so updating your policy is essential.
If you plan to purchase your leased car, inform your insurance provider and have the lessor removed from your policy. This will allow you to adjust your limits below your lessor's requirements if you need to save.
If you need an SR-22 or FR-44, which proves you have the required insurance after a serious driving violation, you can still lease a car. Your lender will ensure you carry the necessary coverage, so the SR-22 or FR-44 won’t be an issue. However, insurance rates are typically higher with these filings, meaning leasing a new car — already more expensive to insure — could further increase your premiums. — Mark Friedlander, Director, Corporate Communications, Insurance Information Institute
This page reviewed the most affordable insurance options for leased cars. GEICO offers the cheapest full coverage policy for leased car drivers at $1,223 per year, followed by Travelers at $1,298. Military members can save even more with USAA at $899.
Leased car insurance costs more than minimum coverage because most lessors require comprehensive and collision coverages along with higher liability limits. Some also mandate gap insurance to cover depreciation.
To save on insurance, compare quotes, use discounts and adjust deductibles. Use our comparison tool to find the best rate for your needs.
We answer common questions to help you better understand car insurance for leased cars.
If you're used to paying for minimum coverage, you'll find insurance for a leased car more expensive. Lessors often require full coverage insurance and increased liability limits, which cost more than basic state minimum coverage.
Leased car insurance costs depend on your situation and provider. Full coverage for leased cars averages $900 to $1,200 annually, with the cheapest options starting around $680 for qualifying military members.
Lessors require full coverage insurance, including liability, comprehensive and collision coverage. Most also mandate higher liability limits than state minimums and can require gap insurance. However, insurance requirements can vary depending on the lessor.
Yes, you need full coverage on a leased car. Nearly all leasing companies require comprehensive and collision coverage in addition to liability insurance to protect their investment in the vehicle.
No, you can't use minimum coverage on a leased car. Leasing companies require full coverage insurance because they own the vehicle and need comprehensive protection against damage, theft or total loss.
If you don't have enough insurance coverage, you risk violating your lease agreement. The leasing company can require you to purchase additional coverage immediately or could terminate your lease early, leaving you responsible for remaining payments and penalties.
Many lessors require gap insurance to cover the difference between what you owe on the lease and the car's actual cash value if it's stolen or totaled. Even if not required, gap insurance is recommended since leased cars depreciate quickly, especially in the first year.
You can cancel your car insurance policy when your lease ends if you're not getting another vehicle. However, if you plan to extend the lease, lease a new car, or buy the leased car, you'll need to update your policy and inform your provider about the changes.
When leasing a car, your deductible choices are limited. Most leasing companies cap deductibles at $500 to $1,000 maximum for comprehensive and collision coverage. You can't choose deductibles higher than what your lessor allows.
Leased car insurance costs more because leasing companies require higher liability limits, mandatory comprehensive and collision coverage, lower deductible caps and often gap insurance. These requirements provide more coverage but increase your premium costs.
Leasing a car means you're driving someone else's valuable asset, and your insurance needs are different from car owners. Lenders require specific coverage levels, and you'll face financial gaps that standard policies might not cover. We designed our research to address these challenges and help you find the right financial protection without overpaying.
Our Research Approach
We analyzed 83,056 quotes from 46 insurers across 473 ZIP codes using data from Quadrant Information Services and state insurance departments. This comprehensive scope ensures our findings reflect real-world pricing across different markets and driver situations.
Sample Driver Profile
To ensure consistent comparisons, we used a standardized profile representing typical leased car drivers:
We then adjusted this baseline by age, location, vehicle type, driving history and credit-based insurance score to provide accurate rate ranges for diverse driver situations.
Coverage Specifications
Our rates reflect full coverage policies essential for leased vehicles. The 100/300/100 liability structure means:
The $1,000 comprehensive and collision deductible represents what you'll pay before insurance covers damage to your leased vehicle. While higher deductibles reduce monthly premiums, remember that you're responsible for this amount every time you file a claim.
Why This Methodology Matters for Leased Cars
Unlike car owners who might consider liability-only coverage, leased car drivers need comprehensive and collision coverage to satisfy lease agreements. Our analysis focuses on full coverage policies because that's what lenders require, helping you compare realistic options rather than inadequate minimum coverage that won't meet your lease terms.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
