This guide outlines strategies to save money on car insurance for business, with tactics you can use in addition to reduce the cost no matter who your policy is with.
In the USA alone, 30% of cars are leased rather than bought, most of which are for business use. Further, there are millions company cars which businesses use to offer incentives for staff, ensuring that the worry of paying for gas, tax and insurance is removed. Naturally for the businesses who use company cars, they will be looking to keep these costs as low as possible and central to tackling the issue is working out how best to save money on car insurance for business.
Car insurance for business: How to save money on the policy
Of course, comparing car insurance quotes will save you money, but there is much more which you can do to bring costs down. Here are some tips to help you and your business save money on car insurance for the company cars for your staff, and you should also research online how you can save on insurance with sites like one sure.
The youth issue
One of the biggest reasons why car insurance often costs so much for businesses is because car insurance providers will give much higher premiums for those under the age of 25. Most businesses cannot say definitively that they will not need need cover for the main driver or the additional driver who is under the age of 25, so they must cover all bases.
In order to get the costs of car insurance for business down in relation to younger drivers, it would be more cost effective for the business to invest in sending their drivers on courses such as Pass Plus, a more comprehensive driving course which costs just a couple of hundred pounds. Once a young driver has completed this, car insurance will significantly lower their premiums.
Car insurance for business: Fleet policy
If you have a large number of cars within the business then you should most certainly be looking at purchasing a fleet policy, and placing them all under the same cover. This will save you a great deal of time in terms of paperwork, admin and renewals as well as helping you to reduce the overall costs of insuring your company cars.
Telematics cut the cost of car insurance for business
Another key factor behind the price which the car insurance provider will offer you, is the heavy mileage which the cars will be doing, thus heightening the risk of something happening on the road. In order to do your bit to give the most accurate figure possible for your fleet of cars or vans, you could consider getting a telematics box fitted to the vehicle.
These boxes are no bigger than a smartphone and they will track the mileage, as well as details such as braking, speed and acceleration. Because this gives the most accurate reading for the insurer in terms of how the vehicle is being used, they will very often reward the company with a discount at the end of the year, assuming that it has fallen below what they expected. This is particularly helpful for haulage or transport companies, and can really save them a lot of money.
Partial or fully comprehensive car insurance for business?
Employers should know one thing in principle: no matter whether employees use a company car professionally or privately, the costs of company car insurance for business are usually borne by the owner, i.e. the business owner.
At least one motor liability insurance is required by law for company vehicles. This protects against personal injury and property damage caused to others by passengers of a company car. In addition, the question arises as to whether voluntary partial or comprehensive company car insurance for business should be taken out.
In contrast to liability, the partial car insurance for business is liable for damages over which drivers themselves have no influence. This includes, for example, damage caused by weather influences such as lightning or hail, wild accident or theft. For a self-caused accident with the company car, on the other hand, only a comprehensive car insurance for business offers sufficient protection. Since this also includes all partial comprehensive benefits, it is therefore a wise decision for company cars.
Rights and obligations of company car drivers
The most important thing before employees receive a company car from the company is a so-called company car leasing contract. In addition to the two contracting parties and the exact designation of the vehicle such as type, brand, license plate and chassis number, all obligations and rights of the employee also belong to the contract to ensure it is covered by car insurance for business.
In principle, it should state that the vehicle must primarily be used for business trips and treated with care. For other rules such as private use, the following also applies: The more detailed and clearer formulated, the fewer misunderstandings and anger there will be later.
These points should be made clear:
- Whether and to what extent the company car may be used privately
- Liability for private use (possibly employee deductible)
- Whether and who is allowed to drive everything with the company car (family members)
- Whether a logbook should be kept
- Who pays the fuel bill for private trips (company or driver?)
- Responsibility for regular maintenance and care (light, brakes, etc.)
- Are private and vacation trips are covered?
Conclusion
Don’t simply accept what you are paying for your car insurance for business; review your costs and use these tips to try and bring it down a bit.
