Do I need temporary car insurance?

What is short term car insurance?

Temporary car insurance cover is typically arranged from between one to 28 days, but some policies will insure you for up to three months. 

What does temporary car insurance cover?

This type of policy usually gives you fully comprehensive cover, but some offer only third party, fire and theft protection. Compare the two levels of cover to ensure you select the policy which is right for you.

You can also extend your short-term cover by adding extra benefits such as European and breakdown cover, but they will cost you extra.

When would I use temporary car insurance?

Many people believe that their own comprehensive policies qualify them to drive other cars. This is mostly not the case. Unless your insurance policy explicitly lists this as a benefit, you will usually be uninsured when driving a vehicle that is not your own.

Temporary car insurance may be necessary when:

• borrowing someone's car for a short period

• using a vehicle for a one-off event such as moving house

• you’ve just bought a new car but not yet arranged an annual policy

• test driving a car being sold privately

• sharing the driving for a long journey

• you have a second car you only drive occasionally – maybe a classic car

Rental car and van companies mostly arrange insurance themselves, although you may be offered an option to pay an excess fee on top of the rental price that waives any financial responsibility on you, should you damage the vehicle.

Similarly, most car sales companies will have insurance arranged so that you’re able to take vehicles on a road for a test drive.

How much does temporary car insurance cost?

As with all car insurance, the cost of temporary cover will depend on the insurer, the car you are being insured on, your age and driving experience, and where you live. Short-term cover is calculated per day, so the longer the policy, the more you will pay.

For example, a middle-aged man wanting to insure a ten-year old, 1.9 diesel estate in a small East Midlands town for one day will pay somewhere between £25 and £35.

When is it cheaper to get a full policy?

If cover is needed for more than a few weeks it is very likely to be cheaper to take out an annual policy and cancel it early, even though you will be charged a cancellation fee of between £30 and £55.

For Example: If the same middle-aged man in an East Midlands town wants car insurance for the same 1.9 diesel estate for two months, he’s likely to get a temporary insurance quote of nearly £400.

Compare this with an annual comprehensive quote for the same vehicle of £360, then consider the following:

*The annual policy is £360 for the year

* If he opts to pay monthly, that’s around £50 for the first month then 11 monthly payments of around £33

* Add these monthly payments to a cancellation fee of around £40

* The total cost for two months on an annual policy, therefore, could cost as little as £123

In this example, taking out an annual policy is £277 cheaper than temporary insurance. Of course, much will depend on the insurer, location and car, as stated above. Read our guide on what other factors can affect the price of your policy.

In most cases, however, if cover is only needed for a few days or a couple of weeks, then temporary car insurance will be the more cost-effective option.

Make sure you compare temporary car insurance and annual cover to find out which is the cheapest option for your needs.

Can anyone get temporary car insurance?

Many car insurance companies offering temporary cover exclude the under 25s and the over 75s, although there are some which will, so make sure you shop around to find a policy which meets your needs.

Other excluding factors may include:

• You have not held your licence for at least 12 months

• You have eight or more penalty points on your licence within the past three years

• You have pending prosecutions or police enquires

• The cost of your car exceeds a certain value, for example £60,000

Check the exclusions of the policy carefully before you apply for a temporary car insurance policy to avoid a wasted application.

If you want to use short term policies to insure your car as and when you need it, you will need to declare the vehicle off the road with a Statutory Off-Road Notification (SORN) during periods it is not covered. Here is how to declare your car off the road to avoid breaking the Continuous Insurance Enforcement (CIE) rules.