Insurance is your first line of defence against everything from fender benders to serious accidents. Not to mention incidents like fire and theft. Car finance is one of the most popular ways to purchase vehicles in the UK, but do agreements come with insurance? Read on as we answer “does car finance include insurance” and what you need to do to stay safe and responsible on the road.

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.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating


  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed


  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs


  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit


  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past


  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan

X monthly repayments of

Typical rate

Loan amount

Total payable




*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!