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Is van insurance cheaper than car insurance?

If you’re thinking about swapping your car for a van, the difference in insurance costs might surprise you. We take a look at why and how van and car premiums are different and identify ways that you can lower van insurance prices without cutting back on cover.

Are vans cheaper to insure than cars?

Generally, no vans aren’t cheaper to insure than cars. In fact, depending on the type of van you have and what you use it for, van premiums can be considerably higher compared to cars.

There are a number of reasons why vans cost more to insure, for instance, they’re usually larger and more powerful than the average car. If a van is involved in an accident, the potential damage and cost of repairs is likely to be higher than for cars.

Not only that, vans typically cover more miles which increase the risk of being involved in an accident. They can also be vulnerable targets to opportunistic thieves, especially if vans are laden with goods.

From an insurer’s point of view, the bottom line is that vans have a higher risk profile and cost more to fix, which is reflected in their higher premiums.

That said, when using a car for delivery driving insurance insurance companies sometimes charge a lot—in that case, it's possible that the cost to insure a van would be cheaper than to insure a car. It depends on the class of use required.

What affects the cost of van insurance?

Insurance is all about risk. The greater the risk of a claim being made, and the potential cost of it determines what your premium might be. To work out this risk, insurers will consider a range of factors, including:

The policy you choose

Commercial (business) van insurance tends to cost more because of the greater risk of a claim. The alternative is private van insurance, but this is only suitable if you drive your van for domestic and personal reasons (such as the school run or weekly food shop).

You’ll also need to choose one of three levels of cover:

  • Third Party Only (TPO). This will compensate other people for damage you cause but won’t pay to repair your van. This is the minimum level of cover you can have by law.
  • Third Party, Fire and Theft (TPFT). Includes TPO and will also compensate you if your van is stolen or damaged by fire.
  • Comprehensive. Provides TPFT cover and will also pay to repair or replace your van if you’re involved in an accident. This is the highest level of cover available.

Despite Comprehensive insurance being the highest level of cover, it can actually work out to be the most cost-effective of all three. That’s because comprehensive policyholders tend to make fewer claims than those opting for third party policies which is reflected in the premium.

The type of van you have

The more expensive or powerful your van is to replace, the higher you can expect your premium to be.

Insurance group

All vans belong to an insurance group with vans in the lower numbered groups being the cheapest to insure. So, if you’re looking for a new van, this is well worth taking into account.

The number of miles you cover

If you’re on the road every day, you can expect to pay more than someone who only uses their van once a week.

How you use your van

If you use your van for work, you may need to add extra features to your policy, these are likely to increase your premium. Examples for additional types of insurance you may need include:

  • Carriage of Own Goods. This covers your tools and equipment.
  • Carriage of Goods for Hire and Reward. You must have this by law if you’re a taxi or transport items that don’t belong to you in exchange for money (for example if you’re a courier).
  • Goods in Transit. Covers the actual items you transport, for instance, if you deliver parcels, this will provide compensation for items that are stolen or damaged.

Learn more about the differences between business and personal van insurance here.

How can I lower van insurance premiums?

Cost is always a factor in choosing an insurance policy but it’s important to consider overall value.

The cheapest policies on offer may not give you the protection you need which can lead you to add on lots of extras—in turn, raising the price. They could also have a number of conditions or high excesses which can be prohibitive if you need to claim. In contrast, policies that appear expensive might already include all the features you need and have a lower excess.

There are also several practical ways you can lower the cost of your van insurance without compromising on the policy itself, for instance:

  • Pay for your policy annually. Monthly instalments will mean you end up paying interest and admin fees so your policy will cost more overall.
  • Choose a telematics policy. Also known as Black Box insurance, your insurer will fit a small telematics device in your van and monitor your driving. If you drive consistently well (based on speed, braking and cornering) your premiums could be reduced as a result.
  • Build up your no claims bonus. For each year you drive without making a claim, you’ll receive a discount on your premium. The more years of no claims you have, the greater the discount. In some instances, it could reduce your premium by up to 75%.
  • Park securely. Keeping your van secure overnight (such as on a private drive or in a garage)can shave a little off your premium.
  • Increase voluntary excess. Doing this can lower your overall premium but whatever amount you settle on needs to be affordable. You won’t be able to go ahead with a claim unless you pay your excess.

Van insurance that suits you and your budget

Whether you drive your van for work or just use it for day-to-day errands, it’s vital to have appropriate insurance for your needs. To help you find great value cover, we’ve teamed up with our partner QuoteZone—simply fill in one form and you can compare quotes from up to 60 different insurers.

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