60-second summary
Here’s your rapid rundown of how driving a company car impacts your no-claims discount:
Company car schemes often come with the added perk of their own car insurance.
Though you might save on paying the insurance premiums, you’ll miss out on the chance to build your no-claims discount (NCD).
What could help to reduce your premiums includes: the type of car you drive, your annual mileage, your excess and how you pay.
Shopping around and comparing car insurance quotes is one of the best ways to find a policy that suits your needs and budget.
How does driving a company car affect car insurance?
If you’ve been driving a company car for a while and your employer pays for your car insurance, you could be missing out on building up a no-claims discount.
This may mean that you face higher insurance premiums when you come to drive your own car again.
But don’t worry. If you’ve got a long, clean driving history, you may still be able to find cheap car insurance quotes for ex-company car drivers.
Shopping around and comparing quotes is one of the easiest ways to find a great deal on your next car insurance policy. But there are a few other things to consider, too.
Does your insurance provider accept claim-free driving?
If you were the only driver of your company car, some insurance providers will offer you a discount for your years of claim-free driving. It’s not strictly a no-claims discount. But it could still lead to savings.
You may be eligible for a claim-free driving discount if you had your own company car that you used outside of work. But if you used a shared pool of cars for work-related travel, it’s unlikely you’ll qualify.
To check whether you’re eligible, the insurance provider who covered your company car will likely ask you:
Whether you had sole use of the car for domestic and pleasure purposes, as well as business and commuting.
The date you stopped using your company car – which needs to be fairly recent.
How many years of claim-free driving you’ve had.
Whether you’re the registered owner and keeper of your new vehicle.
Top tip
Just because an insurance provider is willing to accept your past NCD doesn’t mean they’ll offer the cheapest policy or right level of cover. That’s why you should always shop around and compare car insurance quotes.
Could the no-claims discount on an old policy still be valid?
If you had a no-claims bonus on a car insurance policy before taking up a company car, it may still be valid if you take out new insurance within two years.
If it’s been longer than two years, the NCD probably won’t count. The timeframe your NCD is valid for will vary between insurance providers, though, so it’s always worth checking.
Bear in mind that your no-claims bonus is only counted in complete years, from when you took out your policy to its renewal date. So if you had a claim-free policy for six months then cancelled it to take up a company car, those six months won’t count.
How can I get cheaper car insurance as an ex-company car driver?
A no-claims bonus isn’t the only way to get a good deal on your car insurance. Other factors include your age, job, address and the type of car you drive.
Here are a few things that could help cut the cost of your car insurance:
Choosing a car in a lower insurance group – the less powerful the engine, the cheaper it tends to be to insure.
Reducing your annual mileage – the less time you spend on the road, the less risky insurance providers consider you to be.
Paying a higher voluntary excess – just make sure you can afford to pay it if you need to claim.
Paying annually – annual is typically cheaper, as you often have to pay interest on monthly payments.
See more ways to save money on your car insurance.
FAQs
Do I get car insurance from my employer if I have a company car?
Often, a company car scheme will come with its own insurance. You’ll just need to check to make sure it covers you for personal use.
If you opt out of the company car insurance scheme in return for a ‘car allowance’, you’ll need to insure the car in your own name. This means you should be able to build your no-claims discount.
If I claim on my company car insurance, will it affect my personal no claims discount?
Any claim you make on your company car insurance policy shouldn’t affect your personal no-claims bonus.
But you’ll still need to report any claims to your own insurance provider – and they may increase your premium as a result.
Will previous driving convictions affect the cost of my car insurance?
Any driving convictions you receive while driving your company car could increase your personal insurance premiums. Even if the company car was insured through your employer.
You may also find it harder to get car insurance quotes that cover convicted drivers.
Julie is passionate about delivering a great customer experience and rewarding people for saving on their insurance through our loyalty and rewards programme. She’s spoken to the media, including outlets like Sky News, about car and home insurance, as well as our Meerkat rewards scheme.
Rebecca Goodman is a freelance financial journalist who specialises in insurance, personal finance and consumer affairs.
Our content is written by a Compare the Market expert, backed by data and enhanced by AI. Find out how we ensure accuracy and quality in our Editorial Guidelines.
