Car lease protection insurance

Car lease protection insurance can protect you from defaulting on your car repayments if you become unemployed.

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Peta Taylor

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Key takeaways

  • Car lease protection insurance is designed to make repayments on your behalf if you are made redundant.
  • There are a few car lease protection providers in Australia.
  • It's similar to income protection but there are some key differences.

What is car lease protection insurance?

Car lease protection insurance can pay your lease repayments on your behalf if you're unable to do so yourself, due to involuntary unemployment. Some policies also include sickness and accidents as claimable events, but not all.

Every policy is different but the following rules typically apply:

  • Involuntary employment relates to redundancy only and the redundancy must have been involuntary
  • If you are fired or quit, cover doesn't apply
  • Some providers won't cover you if the redundancy occurs within the first 30 days of purchasing the insurance

Pros and cons of car lease protection insurance

    Pros:
  • It provides cover for redundancy, other types of insurance, like income protection, do not.
  • It can provide peace of mind.

Cons:

  • It's very specific insurance so cover will only be paid out in the event of specific circumstances.
  • It's an additional expense so you'll need to weigh up if the benefits outweigh the expense.

Where can I buy car lease protection insurance?

There are a few providers in Australia who offer car lease protection insurance. Here are some options:

What's the difference between lease protection insurance and income protection insurance?

Car lease protection insurance is specific to your car. The payout can only be used for repayments owed on your car lease. Additionally, car lease protection can cover you for a period of time if you are made redundant. This is a unique feature, there aren't many insurance products that cover you for redundancy.

Income protection insurance is broader; it will pay a monthly amount that can be used for a range of things like your mortgage, ongoing family expenses, general bills and more. Income protection pays out if you need to take time off work due a sudden accident or illness. Ironically, income protection does not cover redundancy.

FAQs

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Peta Taylor is a publisher at Finder, working across all of insurance. She's been analysing product disclosure statements and publishing articles for over 2 years. Peta is passionate about demystifying complex insurance products to help users make well educated decisions with confidence. Peta is part of Finder's insurance awards team and works alongside editorial and insights experts to bring users the best insurance products every year. See full bio

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2 Responses

    Nik's avatar
    NikOctober 30, 2023

    Is there a way to search specifically for car lease insurance?
    There doesn’t seem to be any options when searching comprehensive car insurance

      Peta Taylor's headshotFinder
      PetaNovember 6, 2023Finder

      Hi Nik,
      Car lease insurance is a seperate product to comprehensive car insurance. Comprehensive car insurance won’t cover your lease repayments in the event of income loss; it’d likely only cover your repayments in the event of an eligible accident where the car is written off. For lease insurance, you’ll need to look at different providers.
      I hope this helps.

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