Can Short Term car insurance save me money?
Short Term car insurance is temporary car insurance that ranges from a single day to as much as six months.
But can it save you money? The short answer is yes but the longer answer is much more helpful.
The long answer – who saves money with Short Term car insurance?
The best way to decide whether Short Term car insurance can save you money when compared to a 12-month standard policy is to calculate how often you drive throughout the year.
If you drive all year round then Short Term car insurance is unlikely to save you money and a 12-month insurance policy is going to be the cheaper choice for you.
But if you only drive on rare occasions, a Short Term insurance policy could save you money.
According to Which?, Short Term insurance cover starts from around £10.
£667 is the average UK car insurance price we have used as well. We’ve used these figures to work out (very) rough costs for each of our example motorists.
Driving habits: Graeme is an avid cyclist who commutes on his bicycle every working day of the year. He goes to the supermarket on his bicycle and only ever drives on his annual two-week holiday to North Wales when he goes mountain biking.
Short Term or standard? For Graeme, driving once a year for a two-week period, Short Term car insurance will save him money.
The costs: If Graeme had a 12-month policy he would only actually use it for 14 out of the 365 days he’s paying for.
If his policy costs £667 for 12 months it would cost £1.82 per day for insurance. So Graeme would spend more than £640 to insure a car he doesn’t use for the rest of the year.
A Short Term policy for the same two week period would cost Graeme £140.
That’s more expensive per day than a 12-month policy but Graeme would save almost £530 per year with a Short Term policy.
Driving habits: Susan uses public transport to commute to and from work. She has to drive to other offices three times a month. Susan’s family live one hour away from her home and she drives to see them twice a month. She sometimes uses her car at the weekend.
Short Term or standard? Susan, despite not driving every day of the week, drives often enough for a 12-month insurance policy to be cheaper than a Short Term policy, but it’s a close run thing.
The costs: Susan uses her car at least five times a month. At £10 a day for Short Term cover, she spends £50 a month or £600 for the year. There are also times when she uses her car at the weekend.
With average 12-month car insurance prices sitting at £667, Susan needs to think carefully about which type of policy is more cost effective. If she did not exceed her five drives per month, Short Term makes sense, but if it is unrealistic to stick to that, Susan may be better off getting a 12-month policy.
Driving habits: Adil is a sales executive and drives between clients five days a week. At the weekend he uses his car to drive his kids around. Every year, Adil and his family drive to France for their summer holiday.
Short Term or standard? It’s safe to say that Adil drives pretty much every day of the year, that’s why he’s an obvious candidate to get a 12-month policy – and a business car one too!
The costs: Adil sounds like he drives for 365 days a year, based on average Short Term insurance costs, that would see him pay £3,650 per year for Short Term policies – and he’d have the hassle of arranging them every day.
These examples are extreme – and sound like GCSE maths questions – but they show how important it is to work out how often you drive and which type of policy could save you money.
For some, a Short Term policy works, for others, a standard 12-month policy is the way to go.
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