Using your car for work can make everyday travel easier, but it may also affect how much you pay for insurance. Business drivers often spend more time on the road, travel at busier times and visit unfamiliar locations, all of which can influence the level of risk considered by an insurer.
However, business cover does not have to be prohibitively expensive. From checking your annual mileage to improving your vehicle’s security, there are several practical ways to reduce your premium without leaving yourself inadequately protected.
In this guide, we explain how to find cheap business car insurance in the UK, which factors affect the price and the common cost-cutting mistakes you should avoid.
What is business car insurance?
Business car insurance covers work-related driving that goes beyond commuting to and from one permanent workplace.
For example, you may need business use included in your policy if you use your car to:
- Travel between different offices or workplaces
- Visit customers, clients or suppliers
- Attend meetings, conferences or training sessions
- Make work-related trips to banks or post offices
- Transport colleagues for business purposes
- Carry tools, samples or equipment connected to your job
The cover you require will depend on how frequently you drive for work, who uses the vehicle and what you carry. Our guide to business car insurance explained provides more information about the different classes of business use.
Business car insurance should not be confused with commercial vehicle cover. If driving is the central purpose of your job, such as making deliveries, carrying paying passengers or travelling from door to door to sell products, you may need a different type of policy.
How much does business car insurance cost?
There is no standard price for business car insurance. The amount you pay will depend on a combination of factors relating to you, your vehicle and the type of driving you undertake.
These can include:
- Your age and driving experience
- Your occupation and industry
- Your claims and conviction history
- The make, model, value and performance of your car
- Your estimated annual personal and business mileage
- Where the car is kept during the day and overnight
- The number and experience of named drivers
- How often you drive for work
- The places you visit
- The level of cover selected
- Your compulsory and voluntary excess
- Any vehicle modifications
- The security measures protecting the car
Business use may cost more because it can involve higher mileage, rush-hour driving and regular journeys to unfamiliar places. However, adding occasional business use will not affect every driver in the same way.
Our guide to how much business car insurance costs explores the main pricing factors in more detail.
How to get cheaper business car insurance
The cheapest business car insurance policy will not necessarily provide the right protection. A better approach is to make sure you are not paying for cover you do not need while keeping the policy appropriate for your actual driving.
Here are some of the most effective ways to reduce the cost.
Describe your business use accurately
Your insurer will need a clear explanation of how, where and why you drive for work. This may include the number of business journeys you make, the distances involved, who drives the vehicle and whether you carry equipment or goods.
Do not automatically select the broadest category of business use if your work journeys are limited. Equally, you should never describe regular business travel as ordinary commuting simply to obtain a cheaper quote.
Providing accurate information helps the insurer offer suitable cover and reduces the risk of complications if you later make a claim.
Choose the right class of business use
Not every business driver needs the same policy. Someone who occasionally travels to another office presents a different risk from a salesperson who visits several customers each day.
Business use is commonly divided into different classes, but the precise definitions and restrictions can vary between insurers. Depending on the policy, cover may apply only to the policyholder, or it may also include a spouse or named drivers.
Check that the selected class covers every person who drives the vehicle and all the work-related journeys they undertake. Choosing more extensive cover than you need could increase your premium, while choosing insufficient cover could leave certain journeys uninsured.
Calculate your annual mileage carefully
Mileage is one of the factors insurers can use to calculate a premium. The more time you spend on the road, the greater your exposure to potential accidents and claims.
Before requesting a quote, estimate your personal, commuting and business mileage separately. You can use previous MOT records, service documents, diary appointments or expense claims to produce a more realistic figure.
Avoid entering a high estimate simply because you are unsure. At the same time, do not deliberately reduce the number to obtain a lower price. Your mileage should reflect how you genuinely expect to use the car.
Keith Michaels’ mileage calculator can help you estimate how far you travel.
Increase your voluntary excess carefully
Your excess is the amount you may have to contribute towards a claim. It can include a compulsory excess set by the insurer, and a voluntary excess selected by you.
Agreeing to a higher voluntary excess may reduce the initial premium because you are accepting a larger share of the cost if you claim. However, the saving will not be worthwhile if the total excess becomes unaffordable.
Check the compulsory excess before adding a voluntary amount and consider how much you could realistically pay at short notice. A cheaper premium should not leave you unable to claim when you need to.
Improve your vehicle’s security
The security of your vehicle can affect how an insurer views the risk of theft or attempted theft. Possible security measures that could reduce your insurance premiums include:
- A factory-fitted alarm and immobiliser
- An insurer-recognised tracking system
- Secure garage or gated parking
- A steering-wheel lock
- Well-lit overnight parking
- Secure storage for keys
- Keeping valuable equipment out of sight
Always describe where the vehicle is normally kept accurately. Parking in a garage may help in some circumstances, but you should not state that the car is garaged overnight if it is usually left on the road.
Security upgrades do not automatically reduce every premium, so check with your broker or insurer before purchasing expensive equipment solely to obtain a discount.
Choose your business vehicle carefully
The car you drive can have a substantial effect on your insurance costs. Its value, performance, repair expenses, parts availability, security and likelihood of theft may all be considered.
Buying a cheaper or less powerful vehicle could reduce the premium, but changing cars is not always a realistic or desirable solution. Many professionals use prestige, performance, electric or specialist vehicles for work and still require suitable business cover.
In these circumstances, speaking to a broker with experience in performance car insurance or prestige and luxury car insurance may produce a more appropriate result than relying on a generic online form.
Declare every modification
A modification is not limited to major engine or performance work. Changes to wheels, suspension, bodywork, exhaust systems, security equipment and interior features may also need to be disclosed.
Failing to declare modifications can create serious problems if you make a claim. The insurer may not have offered the same terms had it known about the changes.
A specialist broker may be able to find a policy that considers the vehicle as a whole rather than automatically treating every modification negatively. Read our guide to declaring modifications to your insurer for more information.
Limit the policy to genuine drivers
Adding more people to a policy can increase the insurer’s potential exposure, particularly when a named driver is young, inexperienced or has a history of claims or convictions.
Only add people who genuinely need to use the vehicle. Do not name a more experienced person as the main driver when someone else uses the car most frequently. This is known as fronting and could result in the policy being invalidated.
Businesses with several vehicles and drivers may find that individual policies are no longer the most efficient option. In this situation, fleet insurance could simplify administration and potentially reduce the overall cost of covering multiple vehicles.
Build and protect your no-claims discount
A history of claim-free driving may help you access a lower premium. Tell your broker about any no-claims discount you have earned and provide evidence when requested.
Drivers moving away from an employer-provided vehicle should also ask whether their previous driving record can be recognised. Some insurers may consider claims-free experience gained while using a company car, even when the driver has not held a personal policy in their own name.
Keith Michaels offers specialist insurance for ex-company car drivers and may be able to take previous company car experience into account.
No-claims protection can prevent you from losing some or all of your discount following certain claims. However, it does not freeze the overall premium, which may still change at renewal.
Pay annually if you can
Paying monthly can make insurance easier to manage, but it may involve a credit agreement, interest or additional fees. As a result, the total annual amount can be higher than paying for the policy in one instalment.
Compare the full annual cost rather than focusing only on the monthly figure. Paying upfront could save money, but you should not put yourself under unnecessary financial pressure to do so.
Review your policy rather than automatically renewing
Your business travel may change over time. You could start working from home more frequently, reduce your annual mileage, change roles or stop visiting a particular site.
Review your policy before renewal and update any information that is no longer accurate. However, remember to tell the insurer when your circumstances change during the policy term rather than waiting until renewal when the change affects your cover.
It is also worth reviewing the benefits and exclusions, not just the premium. Our broader guide to saving money on car insurance contains additional ways to manage your costs.
What level of business car insurance do you need?
Business car insurance is generally available with the same main levels of protection as personal car insurance:
Third-party only covers your liability for injury or damage caused to other people and their property. It does not cover damage to your own car.
Third-party, fire and theft adds protection if your vehicle is stolen or damaged by fire.
Comprehensive cover normally includes third-party protection alongside cover for accidental damage to your own vehicle, subject to the terms and exclusions of the policy.
Do not assume third-party cover will automatically be the cheapest. Insurers calculate premiums using several risk factors, so comprehensive insurance can sometimes be competitively priced.
Compare like-for-like quotes and check features such as windscreen protection, replacement vehicle provision, legal expenses, business equipment restrictions and cover for driving other cars.
Common mistakes when trying to cut insurance costs
Reducing unnecessary expenditure makes sense, but providing inaccurate information or removing important protection can ultimately cost far more than it saves.
Common mistakes include:
- Describing business journeys as ordinary commuting
- Selecting the wrong class of business use
- Underestimating personal or business mileage
- Choosing an unaffordable voluntary excess
- Failing to declare vehicle modifications
- Using an inaccurate occupation or job description
- Giving incorrect information about overnight parking
- Adding a more experienced person as the main driver
- Assuming the cheapest quote provides equivalent cover
- Allowing a policy to renew without reviewing it
You should also disclose relevant claims, convictions and other information requested by the insurer. Drivers with previous offences may still be able to obtain suitable cover through a specialist convicted driver insurance provider.
Find cheap business car insurance in the UK. Get a quote with Keith Michaels today.
Finding cheap business car insurance in the UK is not simply a matter of choosing the lowest figure on a comparison page. Your policy must cover the journeys you make, the people who drive and the vehicle you rely on.
Accurately estimating your mileage, selecting the right business-use class, reviewing your excess and discussing security measures can all help you avoid unnecessary costs. More importantly, they allow you to compare quotes based on suitable protection rather than price alone.
Keith Michaels can arrange business car insurance for a variety of vehicles and working arrangements. Speak to our specialist team about your driving requirements or request a business car insurance quote today.