Does Car Finance Include Insurance?

Is insurance included with car finance?

Does car finance include insurance is often one of the first questions asked by borrowers. In most cases the answer is no. Car finance is a very different industry to auto insurance and most companies specialise in only one niche.

When you source a car finance quote, it’s best to assume insurance is not included. That said, some lenders do offer packages so it’s always worth inquiring. Bundling your car finance and insurance can sometimes unlock savings, though it’s not common. Instead, it’s best to source a separate car insurance quote.

As a bare minimum, you’ll need third-party insurance. It’s compulsory on British roads and covers damage to other vehicles and injuries to other drivers and passengers. Does car finance include insurance for third parties? No, like other insurance policies you’ll need to source third-party insurance from an independent provider.

Crunch your numbers with My Car Credit

Can I afford to buy a car, as well as pay for extras like insurance? It’s important to take a close look at your numbers before committing to a car loan.

If you want to keep costs as low as possible it’s worth considering options like Personal Contract Purchase (PCP), which allows you to spread out the cost of car ownership over several years. Your monthly payments are low and at the end of the agreement you have the option to renew the contract and exchange the car for a newer model, make a final ‘balloon payment’ to own the car outright or simply end the contract.