Home
Car insurance
Business car insurance

Business car insurance

Compare business car insurance

Get a quote in less than 5 mins
Compare quotes from up to 150 trusted insurers¹
96% of our car insurance customers recommend us on reviews.io

**Single annual policy. Shell Go+ account required. Only one £10 fuel reward can be used per transaction and each can only be used on fuel purchases of £10 or over. HelloFresh 18+ subscription service. Geographical exclusions apply. T&Cs apply
¹Correct as of March, 2023

What is business car insurance?

Business car insurance is no different to standard car insurance. When you get a car insurance quote, we'll ask you a few questions about how you use your car. There you'll see an option to state that you'll be using your car for business use. Whenever we use the term 'business car insurance' we're referring to 'insurance that covers your car for business use'.

Business car insurance covers you when you’re using your car for certain types of work-related driving. This includes:

Driving to meetings with clients
Driving between different sites or offices
Carrying goods and passengers as part of your job

If you’re using your car for work - and not just the daily commute - you likely need to add business cover to your standard policy.

This type of driving is considered higher risk by insurers. This is because you're likely to be driving during the busiest times of day, often on unfamiliar roads

Do I need business car insurance?

If you use your car for work-related purposes on top of commuting, you'll need business car insurance.

Examples of work-related driving include:

Driving to meetings and appointments
Sales visits
Using your car to get to training courses or company away days
Regularly driving to another office or making site visits
Running business errands like driving to the bank or post office
Driving your colleagues or clients

Business car insurance won’t cover you If you’re a delivery driver. For that, you’ll need courier insurance. It won’t cover you if you’re a taxi driver either. In that case, you’ll need specialist taxi insurance.

Company car drivers don’t normally need to arrange company car insurance either. This is because insurance is likely to be arranged automatically as part of your package. If in doubt, it’s important to check.

It’s easy to amend your car insurance for business use, but getting the right cover is crucial. Without it, your existing policy might not pay out if you have an accident while doing business-related driving. You could also be charged for driving without insurance.

What type of business car insurance do I need?

There are a few types of business car insurance. Which one you need depends on how you use your car. You might find these types of insurance called class 1, 2 and 3:

Business car insurance class 1 is usually the cheapest type of business car insurance. It covers you as the policyholder if you’re driving to visit customers or between different sites or offices. You can also set it so that your partner has business use but you don't.
Business car insurance class 2 extends this cover so both you and your partner can drive the car for business purposes. Your partner should be a named driver on your policy.
Business car insurance class 3 lets all named drivers on the policy drive the car for business purposes.
Business car insurance commercial use is usually the most expensive class of business car insurance. These policies cover you if driving is a permanent part of your job and you're selling goods and services.

How much is business car insurance?

The average price of a business car insurance policy is £350¹ but your own policy price depends on several factors including:

Your Class of use
The level of insurance cover you need
Your occupation
Your estimated mileage

Your car insurance might be more expensive if you have to regularly drive long distances. This is because your insurer might see you as having a greater risk of an accident.

The cheapest policy isn’t always best, but there’s no point in paying for cover you don’t need. And different business car insurance policies have different levels of cover. So it’s important to check how much cover the policy you’re considering offers and whether it's at the right level for you.

1 Based on average business use car insurance policies from January 2022 to December 2022

Confused.com

Save up to £407 on your car insurance*
Plus choose a free gift with Confused.com Rewards**

It’s a win-win.

How to claim a reward

*Based on data provided by Consumer Intelligence Ltd, www.consumerintelligence.com (February '23). 51% of car insurance customers could save £407.05
**Single annual policy. Shell Go+ account required. Only one £10 fuel reward can be used per transaction and each can only be used on fuel purchases of £10 or over. HelloFresh 18+ subscription service. Geographical exclusions apply. T&Cs apply

Can I get temporary business car insurance?

Yes, you can get temporary business car insurance. Short-term business car insurance is flexible, lasting from 1 hour to 28 days.

This could work out cheaper if you only need to use your car for work-related driving every now and again. This could include driving to a corporate weekend away or training course.

Several insurers offer temporary business car insurance. Many offer instant cover, so you can drive away within a few minutes of finding a policy.

For more information, visit our temporary car insurance page.

Who pays for car insurance for business use?

Usually, your employer pays for the additional cost of your business car insurance, so it’s worth talking to them.

If your employer doesn’t fully pay for your business car insurance costs, they might contribute towards mileage during working hours.

If you’re self-employed, your business is responsible for paying the bill.

How much will my employer pay per mile?

It varies by employer, but the standard rates are 45p per mile for the first 10,000 miles and 25p per mile after.

These are the standard rates set by the HMRC’s Approved Mileage Allowance Payment (AMAP) rates, which apply to both cars and vans.

What do the AMAP rates cover?

AMAP rates cover the cost of running and maintaining your vehicle.

This includes:

Fuel
Servicing and maintenance (including your MOT) and any repairs
Car insurance
Car tax (vehicle excise duty, or VED)
Wear and tear

AMAP rates don’t cover:

Motorway tolls
Parking fees
Congestion charges
Other incidental expenses

You can claim tax back on these expenses as well as the AMAP rate if you can show you’ve made them ‘wholly and exclusively' for business purposes.

To calculate your business mileage, multiply the number of miles you've driven on work-related business by the appropriate rate for your vehicle.

Plus, if you've any passengers in the car who work for the same business as you, you can claim an additional 5p per mile.

Can I get a tax refund on my business car insurance if I’m self-employed?

Yes, you can get tax relief on your business car insurance if you’re self-employed.

This is because business car insurance is seen as an 'allowable expense’ by HMRC along with:

Repairs and servicing
Fuel
Parking
Hire charges
Breakdown cover
Vehicle licence fees

What details do I need to get a business car insurance quote?

Having the following information to hand will speed up getting a business car quote:

Personal details

Your occupation, address and age
Any points on your licence as well as the conviction code
Previous claims or accidents from the last 5 years
Named drivers you want to add to your policy
Details of your no-claims bonus (NCB) in years

Car details

Registration number or make and model of your car
Any modifications made to the car
Estimated annual mileage

How can I get a cheap business car insurance quote?

To keep the cost of business car insurance down, consider:

Using a black box or telematics policy that rewards careful drivers with lower costs
Being accurate with your annual mileage, so you’re not paying for miles you don’t need
Installing security devices in your car
Parking your car with security in mind - a locked garage is better than street parking, for example
Paying annually rather than monthly, as monthly payments add interest
Increasing your voluntary excess - if you’re willing to pay more towards a claim, you should see your costs fall

Compare cheap car insurance quotes

Get a car quote

We compare up to 150 trusted insurance companies to get you our cheapest deal in minutes

See all companies

"Great site. Gave me a large selection of quotes to choose from."

Chris - Confused.com customer (March 2023)

"Quick and simple process and best quotes easily accessible."

Diana - Confused.com customer (March 2023)

"Lots of prices and easy to compare the different companies."

Jennifer - Confused.com customer (March 2023)

Read on reviews.co.uk

Types of car insurance

Black box car insurance

lets you prove you’re a safe driver, and save money on your policy, even if you’re inexperienced or seen as high risk.

Impounded car insurance

get cover to release your car from the impound.

Classic car insurance

offers cover for owners of classic cars. For insurance purposes, a classic car can be any car that’s older than 15 years.

New driver insurance

for those who are new to driving or hold a provisional license.

Multi car insurance

lets you insure one or more cars on the same policy.

Temporary car insurance

offers short-term comprehensive cover from one hour to 28 days.

What our car insurance expert says

If you use your car for work, such as driving to different sites, you should add business use to your car insurance policy. This ensures your policy stays valid while you use your car for work. When you get a quote, be sure to select ‘business use’ to only show policies that include this level of cover cover.

Louise Thomas

Car insurance expert

Need more help?

Can I add a named driver to my business car insurance?

Yes, you can add drivers to your business car insurance policy. If you contact your insurer, they should guide you through the process. They might ask you for:

The additional driver's occupation
Any details of past car insurance claims
Any motoring convictions from the past 5 years

Adding a driver to your policy could bring your costs up or down, so it's worth checking before you commit to adding them.

Will my standard policy no-claims discount be affected if I claim on business car insurance?

If you've added business use to your existing car insurance policy, you only use your standard no-claims bonus. So, if you had an accident while on a business trip, your no-claims bonus is likely to be affected.

If you're using a company car, your policy might have its own no-claims bonus. Claiming on your company car insurance policy shouldn't impact any no-claims you've built elsewhere.

Car insurance guides

After buying car insurance, 96% of Confused.com customers would recommend us (based on 130715 Reviews.co.uk respondents - as of 25/01/23). Read our reviews