Temporary car insurance statistics: 2023

Whether embarking on a road trip or borrowing a car from a friend for the weekend, you may need temporary car insurance in many situations.

No matter what you’re doing on the road or for how long, you always need to be protected, and that’s where temporary car insurance comes in.

We explore everything you need to know about temporary car insurance in 2023. Including how many people are using it, why they favour it, and what the average customer looks like.

If you need short-term cover for an upcoming trip, compare temporary car insurance for the best deal.

An overview of temporary car insurance statistics in the UK

• In the past couple of years, about 1 in 5 drivers have applied for a non-annualised policy (NAP), which is a policy that does not span the conventional term of one year. 11% of drivers went specifically for temporary car insurance.
• Around two-thirds of drivers know what temporary car insurance is, and another quarter have at least heard of it.
• 1 out of 5 drivers who haven't taken the temporary insurance plunge yet are considering giving it a go.
• So, why do people choose this type of coverage? The top reason, making up 46% of cases, is when they need to drive someone else's car. Then, at 34%, it's buying a new car.
• Most drivers are happy with temporary car insurance. Almost half are completely satisfied, and only 2% say they weren’t pleased. The parts they enjoy the most are the easy purchase and application processes.
• Temporary car insurance users are generally a younger crowd—the average age is around 45, compared to 55 for those not using it. It’s also more common among men (52%) than women (48%).
• Regarding money, households with temporary insurance bring in around £41,000 a year, a bit more than the £38,000 for those without it. They also tend to be behind the wheel more often—34% of people driving 5 to 8 times a week have temporary insurance, compared to 28% without.
• 29% of city dwellers use temporary car insurance, compared to 18% of non-users.
• Families with kids are more likely to be users (46%) than non-users (27%).

What is temporary car insurance?

Temporary car insurance provides coverage for a short period. This could be anywhere from 1 hour to 28 days, depending on the specifics of the policy. It's also sometimes referred to as short-term car insurance.

Temporary car insurance is helpful in several situations, including but not limited to:

• Borrowing a car: If you're borrowing a car from a friend or relative, temporary insurance covers you during your use.
• Test drives: If you're test-driving a car from a private seller, your regular insurance may not cover this, and temporary test drive insurance can fill the gap.
• New car purchase: If you've just bought a new car and haven’t bought annual insurance, temporary insurance can cover you in the interim.
• Temporary vehicle: If you plan to sell or otherwise dispose of your car, a temporary insurance policy might make more sense than paying for an annual one.
• Impounded vehicle: If your vehicle has been impounded by authorities, you might need temporary insurance to release and drive it. Regular insurance may not cover this situation, so impound car insurance provides an essential bridge until you can arrange more permanent coverage.
• Driving in Europe: If you're planning a road trip abroad, a temporary European car insurance policy can be a great solution. It allows you to be insured for the duration of your trip without the need for a long-term commitment. Just remember, make sure the policy specifically covers travel within Europe.
• Non-UK resident: If you're visiting the UK for a short period but wish to drive, temporary car insurance for non-UK residents can be an excellent option. It allows you to be covered during your stay, making it perfect for tourists or overseas workers who need to drive while in the country. Do check the eligibility requirements of the provider, as some may have certain restrictions based on your country of residence.

It's important to note that cover can differ depending on the insurer. So it's best to check your policy details to ensure you have the cover you need.

How popular is temporary car insurance?

In the last 2 years, just over a fifth (21%) of drivers have applied for a non-annualised policy. Temporary car insurance was the most popular, with just over 1 in 10 drivers (11%) applying in the last 2 years.

Awareness and interest are both high among those who haven’t used temporary insurance.

Most drivers (63%) say they’re familiar with temporary insurance, and a further quarter say they’ve heard of these products. This means that around 88% of people have some awareness of temporary car insurance.

A fifth of those who have yet to use temporary insurance say they’d be interested, although a quarter show no interest.

Why are people using temporary car insurance?

The most common reason people choose to use temporary car insurance is that they use someone else’s vehicle (46%). This could be when borrowing a friend or family member's car for a short period or even when renting a vehicle. Temporary car insurance provides these users with the security of being covered without affecting the no-claims bonus of the car owner.

Following this were those buying a new vehicle (34%), with these 2 being the most popular reasons. New car owners may use temporary car insurance as a stopgap while finding a suitable long-term insurer.

The third most common reason, shared by 3 different categories with 8% each, is quite diverse.

Some consumers buy temporary car insurance due to a reduced need to drive, perhaps because they work from home more or use more public transport. Others consider cost, as temporary insurance can sometimes be cheaper than an annual policy, especially for occasional drivers. Even if you don’t use your car that often, you still need continuous insurance; otherwise, you must declare your vehicle as being off the road. The last group falls under the 'Other' category, which can encompass various reasons not explicitly covered.

How satisfied are people with temporary car insurance?

Overall, temporary car insurance customers are satisfied with the product, but this varies for different aspects.

Overall, just under half of drivers are completely satisfied with temporary car insurance, with just 2% saying they’re unsatisfied. Nine in 10 users were happy with the temporary car insurance buying process, with similarly high levels for the application process.

The least popular aspect of temporary car insurance is the value for money, with more than 1 in 10 saying they were unsatisfied. Some were also unsatisfied with the flexibility offered, with just 35% saying they were completely happy.

Also, most temporary car insurance users say that the pricing of the policies is fair, with just 1 in 10 saying they were unfair and 27% being neutral.

47% of temporary car insurance users say they’ll likely do it again within the next 12 months. But it's unlikely that someone would need temporary car insurance every year.

Who is using temporary car insurance?

Users of NAP insurance tend to be on the younger side, with an average age of 45, compared to 55 for those who haven’t used it. NAP users comprise a more significant share of the total for each age group below 50. After this point, the majority of people don’t use temporary insurance.

In terms of gender, there’s little difference between those likely to use NAP insurance. Males are slightly more likely to use temporary insurance, at 52%, compared to 48% for females, although the difference is marginal.

Regarding income, those on lower incomes are slightly less likely to use temporary car insurance.

Of those who’ve used NAP policies, almost a third (32%) earn £50,000 or more. This could be due to more flexible lifestyles, or travelling and renting cars more often.

In contrast, the incomes of non-users are more evenly distributed. Those earning between £20,000 and £35,000 comprise the most significant proportion of non-users (31%). Just 23% of non-users earn £50,000 or more, compared to 32% of users.

Income of temporary car insurance users vs. Annual policy holders

Those who drive less frequently (less than 5 times a week) are slightly less likely to use temporary car insurance, at 43% compared to 48%.

But that trend shifts for those who drive more frequently, with 34% of NAP users saying they drive 5 to 8 times a week, compared to 28% of non-users. This suggests that those who drive more frequently find more value in a temporary policy.

However, the split was almost equal for those who drive the most, suggesting no clear preference for this group.

It’s also interesting to note that 12% of NAP users drive for gig-economy rideshare services like Uber, compared to 1% of non-users.

How often do people use temporary car insurance?

Temporary car insurance users are much more likely to live in urban areas like cities (29%) than non-users (18%), with people in these areas likely to rely on public transport. The distribution is much closer for suburban drivers, representing 50% of users and 53% of non-users.

However, temporary car insurance users are less common in rural areas (21%) than non-users (29%). This could be due to a lack of available alternatives to driving - drivers are more likely to opt for traditional, full-term insurance.

Where do temporary car insurance owners live?

Finally, those with temporary car insurance are significantly more likely to have children. 46% of NAP users have children under 18 in their households, compared to just 27% of non-users.

This could be due to the added flexibility of temporary policies, which can help accommodate changing family needs and circumstances. The average household size also backs this up, at 2.9 for users and 2.5 for non-users.

Holders of NAP policies tend to have fewer years of no-claims bonus than those who don’t. The average user has built up 8 years of no-claims bonus, compared to 10 for non-users. This could be partly due to the younger age profile of users, which would mean they’re less likely to have built up as many years.

Sources & methodology

The following data was sourced from LexisNexis’ Consumer Study on Motor Insurance Non-Annualised Policies (NAPs):

• % who have applied for temporary insurance (page 4)
• Reasons for purchasing temporary insurance (page 5)
• Customer satisfaction in temporary car insurance (page 9)
• Temporary car insurance demographics (page 11)
• No claims discount by temporary and traditional car insurance (page 12)