State Farm offers the cheapest insurance for leased cars, with full coverage costing an average of $883 annually.
Cheapest Car Insurance for Leased Cars
Updated: March 31, 2025
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Key Takeaways
State Farm offers the cheapest insurance for leased cars, with premiums averaging $883 annually.
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.
Cheapest Insurance for Leased Cars
| USAA | $679 |
| State Farm | $883 |
| Nationwide | $930 |
| GEICO | $936 |
| Travelers | $1,037 |
| Progressive | $1,120 |
| Allstate | $1,124 |
| Farmers | $1,192 |
*Note: USAA is exclusive to active-duty military members, veterans and their families.
Best Cheap Car Insurance Companies for Leased Cars
At an average of $883 per year, State Farm's full coverage auto insurance is the cheapest coverage for leased cars. Active-duty and retired military members can get USAA's coverage for as low as $679 annually. Full coverage insurance is best for leased cars since most lessors require liability, comprehensive and collision coverages.
Most Affordable for Leased Cars: State Farm
State Farm
MoneyGeek Score:
85/ of 100
Monthly Premium$74
Affordability Score4.00
Customer Satisfaction4.00
Coverage Score3.00
Claims Score2.00
Overview
State Farm’s leased car insurance costs an average of $883 a year, but this may change based on several factors — such as your circumstances and any applicable discounts. State Farm offers major discounts for bundling multiple policies, safe driving, multiple vehicles, defensive driving and more.
Cheapest Auto Insurance for Leased Cars: Runner-Up
Nationwide is the second-best and cheapest provider for leased car insurance, at an average of $930 per year for full coverage.
Nationwide
MoneyGeek Score:
84/ of 100
Monthly Premium$78
Affordability Score4.00
Customer Satisfaction3.00
Coverage Score4.00
Claims Score2.00
Overview
Nationwide’s full coverage for leased cars averages $930 annually. You may save more with discounts like defensive driver, good student, anti-theft, bundling, safe driver and automatic payments.
Cheapest Insurance for Leased Cars for Military Members
USAA offers coverage exclusively to the military community, including active-duty members, veterans, reserves and their families. Its full coverage for leased cars is the cheapest, averaging $679 annually.
USAA
MoneyGeek Score:
90/ of 100
Monthly Premium$57
Affordability Score5.00
Customer Satisfaction5.00
Coverage Score3.00
Claims Score3.00
Overview
USAA offers the cheapest full coverage policies for leased cars, averaging $679 annually. Policyholders can lower costs further with discounts for bundling, safe driving and defensive driving. USAA also provides military-specific discounts, such as savings for garaging your vehicle on base.
USAA’s coverage is available exclusively to active-duty military, veterans and their families.
Leased Car Insurance: Buyer's Guide
Leased car insurance typically requires higher liability limits and full coverage, including comprehensive and collision insurance, to meet lessor requirements. Understanding these requirements and exploring cost-saving strategies can help you find the best coverage without overpaying.
How to Find the Cheapest Car Insurance for Leased Cars
While insuring a leased car may be costly — especially if you’re used to the state minimum policies — there are ways to find the best car insurance quotes. You may qualify for discounts, increase your deductibles or shop for a better deal.
- 1
Take advantage of discounts
Most insurers provide a range of discounts, but availability varies. Common options include safe driving, bundling policies, insuring multiple vehicles and completing a defensive driving course. To maximize savings, ask your insurer about discounts you may qualify for.
- 2
Increase your deductibles
Your collision and comprehensive deductible is the amount you pay out of pocket after an at-fault accident before your insurance covers the rest. Choosing a higher deductible can lower your premiums but increase your out-of-pocket costs if you file a claim. Minimum coverage, however, doesn't have a deductible.
- 3
Shop around
Comparing quotes from multiple providers can help you find the best rates. Since insurers calculate premiums differently, switching providers may save you money. Get at least three quotes and compare them based on cost, discounts, reviews and perks.
- 4
Choose the right coverage limits
Lessors often require full coverage, including comprehensive, collision and higher liability limits. While minimum coverage typically isn’t an option, you may adjust other coverages to save money. For instance, consider dropping optional add-ons like roadside assistance or rental car reimbursement if they aren’t required.
- 5
Maintain a good credit history
Many insurers rely on credit-based insurance scores to set premiums, with lower scores often resulting in higher rates. To improve your score and potentially secure lower rates, pay bills on time, reduce debt and regularly check your credit report for errors.
Is It More Expensive to Insure a Leased Car?
If you're used to paying for minimum coverage, car insurance for a leased car may seem more expensive, as lessors often require full coverage. However, it comes with more protection, including liability, comprehensive and collision coverages.
Full Coverage Insurance vs. Minimum Coverage
Opting for minimum coverage can save you around 52% compared to full coverage, reducing your annual premium by about $515.
Full coverage insurance: $987 annual premium
Minimum coverage insurance: $472 annual premium
What Are the Requirements for Insurance on a Leased Car?
Full coverage insurance is typically required to protect the lessor’s investment if you're leasing a car. This includes liability, comprehensive and collision coverages, ensuring the vehicle is covered in case of damage. Some lessors may also require uninsured/underinsured motorist coverage, personal injury protection (PIP) or gap insurance for added protection.
Required Coverage | Description |
|---|---|
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. |
MONEYGEEK EXPERT TIP
Before leasing a car, get full coverage insurance in addition to your state’s minimum requirements. This protects the lessor’s investment, as comprehensive and collision coverages pay for car damage. Some lessors may also require higher liability limits.
Do You Need Gap Insurance When Leasing a Car?
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 may be less than your lease balance, leaving you to pay the difference. Even if it’s 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.
What Happens to Your Car Insurance When Your Lease Is Done?
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 extending your lease contract
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 leasing a new 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 on buying your leased car
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 want to know how much you need to pay, use our car insurance calculator.
HOW DOES SR-22 INSURANCE WORK WITH A LEASED CAR?
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
Cheapest Car Insurance for Leased Cars: Bottom Line
This page reviews the best and most affordable insurance options for leased cars. State Farm offers the cheapest full coverage at $883 per year, followed by Nationwide at $930. Military members can save even more with USAA at $679.
Leased car insurance is typically more expensive 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.
Cheapest Car Insurance for Leased Cars: FAQ
Our answers to frequently asked questions will help you better understand car insurance for leased cars.
Is insurance cheaper for leased cars?
If you're used to paying for minimum coverage, you may find insurance for a leased car more expensive. Lessors often require full coverage insurance and increased liability limits.
How much is insurance for a leased car?
Leased car insurance costs depend on your situation and provider. State Farm, a leading insurer, charges an average of $883 per year for full coverage on leased cars.
What are the insurance requirements for a leased car?
Lessors usually require full coverage insurance and may also mandate higher liability limits. However, insurance requirements can vary depending on the lessor.
Auto Insurance for Leased Cars: Our Methodology
Why Trust MoneyGeek?
MoneyGeek analyzed data from Quadrant Information Services and state insurance departments, using various profiles and locations, to highlight the importance of comparing car insurance rates. Rates for the same profile can vary significantly across insurers.
Study Overview
Comparing car insurance is essential to finding the best rates and coverage. Rates vary based on age, location, vehicle type, driving record, credit history and insurer. MoneyGeek used these factors to generate data-backed averages, helping you find and compare affordable options.
Data Acquisition, Depth and Analysis
MoneyGeek analyzed 83,056 quotes from 46 insurers across 473 ZIP codes, using data from Quadrant Information Services and state insurance departments.
Driver Profiles
A sample driver profile ensured consistent rate comparisons. The standard profile includes:
- 40-year-old male
- Clean driving record
- 100/300/100 liability limits
- Comprehensive and collision coverage with a $1,000 deductible
- 2010 Toyota Camry LE
- 12,000 miles driven annually
We adjusted this profile by age, location, vehicle type, driving history and credit-based insurance score to provide accurate averages for diverse needs.
Coverage Levels and Deductibles Explained
Rates reflect a full coverage policy with 100/300/100 liability limits and a $1,000 deductible unless stated otherwise.
A 100/300/100 policy means:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $100,000 property damage liability per accident
A $1,000 comprehensive and collision deductible means you pay $1,000 before insurance covers damage to your car. A higher deductible typically reduces premiums.
Learn more about MoneyGeek's methodology.
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.