Connect with us


What’s the difference between long-term and temporary vehicle insurance and which one is best for you?


If you run your own business, then you’ll no doubt know just how challenging it can be to keep on top of your finances. Whether you’re in the early days of your venture or you’ve been established for a number of years, bills can quickly add up and eat into overheads.

One business cost that is often unavoidable is insurance. Of course, you want to make sure that your business is fully-insured and covered should anything go wrong, but you also don’t want to spend hundreds of pounds on a policy that you may not need for the entire year.

It’s a common dilemma for both business owners and individuals without a permanent car – do you splash out on a long-term policy that covers your vehicle for the entire year, or do you opt for temporary vehicle insurance every time you want to drive a new vehicle? Both have positives and downfalls, and in this article, we’ll attempt to unravel which is the best option for you.

Why take out insurance?

In the United Kingdom, you cannot drive a vehicle without a valid insurance policy, both as an individual and as a business owner. As a legal minimum, you should have third-party insurance, which means you’ll be covered if you have an accident and cause damage to another person, vehicle, animal or property.

Third-party insurance, however, does not cover any other costs, such as the cost of repairing your own vehicle, or the cost of your recovery. That’s why it is recommended to take out a fully-comprehensive policy – even if you want to save money, it pays to be protected against unfortunate accidents and incidences and could save you in the long-run.

Vehicle insurance also covers lawsuits and legal fees which could be brought against you when you are involved in an accident, and it can cover other incidences such as fire and theft, should you take out a comprehensive plan. As a business owner, this is important – people are more likely to claim against a business than they are an individual.

What are the benefits of temporary insurance?

Temporary car insurance, like the policies offered by companies such as Call Wiser, have been on the increase in recent years, with frugal business owners and individuals looking to save money and get more bang for their buck. If you’re a freelancer, only hire vehicles on an occasional basis, or don’t have a permanent vehicle and instead borrow from friends and family, then there’s no point in you splashing out in an expensive coverage policy.

  • Flexibility of dates: If you’re planning on making a long journey but don’t have an exact date in mind, then you’ll likely invest in a car insurance policy that covers you for an extended period. This isn’t always the most cost-effective option, as you’ll essentially be paying for coverage on days you won’t need it. That’s why temporary insurance is the cheapest and most cost-effective option, as you’ll be able to cover your vehicle for the exact dates and times – no wastage or unnecessary insurance.
  • Flexibility of vehicles: Not sure which vehicle you’ll be driving on the day of your journey? Planning on picking up a hire car on the day of your travel? That’s another significant benefit to temporary insurance. Of course, if you want to, you can splash out on comprehensive “drive any car” insurance policies, but these are expensive.
  • Instant coverage: Need to deliver a parcel overnight or head into town to visit a relative? Temporary car insurance makes that possible, as you’ll be able to get instant coverage for your vehicle. Don’t let long, drawn-out car insurance policies stop you from doing what you want to do – just go for a temporary plan.
  • Add additional drivers: Want to take it in turns to drive the car into the city? With temporary car insurance, you can add additional drivers to your plan, often for free, to save you time and headache. Always check the small print of your policy to make sure that this option is available for you, as you may have to pay extra to upgrade.

What are the drawbacks of temporary insurance?

  • More expensive: Because of the convenience of temporary car insurance, you can expect to pay more for your policy in the long-term than you would by taking out a long-term plan. Add up the costs and see which is the cheapest for your needs.
  • Have to set up every time: If you’re always on the road and need to get from A to B as soon as possible, then having to sign up for a new temporary car insurance policy every time can be a challenge. Many providers have apps and one-page sign-ups to make purchasing a plan easier, but it’s still a hassle when you’re leading a busy life.
  • Not tied down to any plan: Because you’re not tied down to a particular plan or policy, it’s easy to get confused over what you’re covered for. Make sure you read the terms and conditions of your policy every time you sign up – things change from provider to provider, and you won’t always be covered for things like windscreen chips or wheel replacement if you’re taking out a “cheap” temporary policy.
  • Short dated: Typically, that’s the whole point of temporary car insurance policies, but this can be a downside if your trip is extended or you want to drive for longer periods of time. Of course, you can contact the insurance provider to have your policy upgraded or extended, but this isn’t the most cost-effective option.

What are the benefits of long-term insurance?

  • Permanent cover: When you take out a long-term car insurance policy, you’ll be covered throughout the length of your policy. Plus, most car insurance policies will automatically renew unless you cancel so that you won’t go without cover.
  • Easy to customise: Made customisations to your vehicle or want to add a second driver midway through your policy? Most insurers make it easy to customise your policy mid-period; simply get in touch and ask for assistance.

What are the drawbacks of long-term insurance?

  • Locked in: Unless you have a flexible policy, you’ll be locked-in to your car insurance provider for the length of your period. Of course, you can sign up for another policy at any time, but you’ll still be liable to pay for your original car insurance policy.
  • No refund: Most insurers don’t offer refunds on insurance periods that you don’t use. Whether you only drive at certain times of the year or decide to stop driving altogether, you’ll be paying for a policy you no longer want or need.
  • Limited to one vehicle: Unless you take out a fully comprehensive plan, you’ll only be covered to drive one vehicle. Adding additional vehicles can be expensive. 


Both temporary and permanent car insurance policies have their uses, and it’s up to you to determine which is best for your requirements and budgets. If you need to be insured on a regular basis, or you’re taking out temporary policies more than three or four times a year, then long-term car insurance may be the most cost-effective option. Happy driving!

BusinessArticles is the popular online Hub for quality business articles. We publish unique articles and share them with our social followers.