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Car insurance for business use

Compare quotes for when you need to insure your car for work use

What’s business car insurance?

Your standard car insurance policy will cover you for a daily commute, but if you use your car for anything other than driving to a single place of work, then you need business car insurance.

This includes driving to meet clients, visiting multiple work sites or transporting other members of staff.

What’s business car insurance?

Is your car MOT due by 30 June? Buy car insurance through us before 15 June and get the test for a tenner^

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^Participating garages only. Geographic restrictions apply. MOT must be booked by 30 June 2021. Full T&Cs apply. Find out more.

Journeys to think about

Common business journeys are rarely covered by standard car insurance. If you do any of these, you’ll need business car insurance.

  • Travelling to a training course
  • Going to the bank
  • Driving to the post office
  • Driving to another office
  • Attending company away days

If you’re carrying passengers for hire or reward – in other words, Uber and other ride-sharing apps - you’ll need taxi insurance.

And if you use a van to commute to even one place of work, you’ll need commercial van insurance.

When comparing car insurance, be honest about how you use the vehicle to ensure you get the right cover.

Different types of business car insurance

If you’re running an occasional workplace errand in your car, you won’t need the same level of insurance as someone who uses their car commercially, such as a delivery driver.

There are no industry-wide standard definitions, but most business car insurance policies fall into one of the following:

Return to value cover (RTV)

This is for cars bought privately or from a dealer, but not within the past three months.

It covers the difference between the insurance valuation at write-off and the value of the car when you opened the Gap policy.

Return to invoice cover (RTI)

RTI is for cars bought from a dealer within the last three months.

In the event of a write-off, the payout is the difference between the valuation and the original purchase invoice price.

Vehicle replacement insurance (VRI)

New car? This one is for you.

The payout covers the difference between the valuation and the cost of buying a brand-new car, even if that price has risen.

If you have fully comprehensive car insurance, read the small print. Some insurers offer a new replacement car service if the car is under 12 months old, so you may not need gap insurance.


Finance Gap insurance pays the difference between the vehicle’s market value at loss and whatever amount is still outstanding on your finance agreement.

After an accident, contact both your main car insurance provider and your Gap provider as soon as possible.

Get free £250 excess cover plus a £10 car MOT^

We’re offering you £250 free excess cover when you buy car insurance through us. So if you do need to claim, you'll have to pay your excess first, then we'll refund up to £250 after your claim's settled. Find out more

Plus, if you buy car insurance before 15 June, you can also get a car MOT for just £10. Find out more.

Get car insurance

Up to £250 refunded after claim settled. Car insurance purchases only. Excludes breakdown, windscreen and glass repair/replacement. Full T&Cs apply.

^Participating garages only. Geographic restrictions apply. MOT must be booked by 30 June 2021. Full T&Cs apply.

How much does business car insurance cost?

If you use your car for work, your insurance could work out expensive. That’s because insurers think you’re more likely to have an accident – they’ll assume you’re on the road more, driving in places that aren’t as familiar to you and possibly in heavy traffic too.

But we checked, and business car insurance can still work out cheaper than standard car insurance. On average, fully comp business car insurance cost our customers over £92 less than standard fully comp insurance.*

It looks like other factors - things like the car you drive, your driving history and mileage - contribute to the cost of your insurance more than whether you drive your car for work or not.

Be honest about how you use your car though. If you don’t you could invalidate your insurance.

*Average purchase price through GoCompare for annual comprehensive car insurance policies with social and commuting cover versus business cover in December 2020.
Business car insurance cost versus personal car insurance

How do I make my business car insurance cheaper?

It doesn’t matter that you use your car for work, all the standard tips for cutting motoring insurance costs still apply.

  1. Don’t over insure yourself

    You’ll be asked how many miles you do for business, and if you over-estimate, you’ll basically pay for insurance you don’t need

  2. Pay annually

    It’s cheaper than paying monthly if you can afford one lump sum

  3. Increase voluntary excess

    Just make sure you can afford to pay it if you need to

  4. Build up a no claim’s bonus

    Insurers give better prices to motorists who are claim free

  5. Take care with add-ons

    Don’t pay for extras you don’t need or want - and check if you’re already covered elsewhere

  6. Shop around

    We can help you compare business car insurance

Who pays for business car insurance?

If you’re self-employed, you can claim for allowable business expenses, including car insurance, in a self-assessment tax return.

Record every expense for business-related driving in case the HMRC wants to see them. You don’t need to send the evidence as part of your tax return.

If you’re employed and drive your private car for work purposes, it’s normal for companies to reimburse their staff for business miles.

The amount paid per mile should be higher than the cost of fuel because it reimburses you for the extra insurance costs and the car’s wear and tear.

45p a mile is the current standard reimbursement rate, although this may drop to 25p if you’re covering a lot of miles. These figures are linked to HMRC guidelines on Mileage Allowance Payments (MAPs).

You should also be able to claim for any toll roads or other expenses you incur.

Employers have a legal responsibility to make sure that all vehicles used for work purposes conform to road traffic law, are safe, properly maintained and fit for purpose.

You can claim expenses for your vehicle if you’re self-employed by recording your business miles and including them in your self-assessment tax return.

Employers shouldn’t assume that their workers are covered just because they have private car insurance

Companies have a legal responsibility to make sure that vehicles used on company business are safe to use, irrespective of its owner. And this includes being fully insured for business usage
Ryan Fulthorpe - Motoring expert at GoCompare

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