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Affordable Car and Van Insurance for Expats in the UK (2025 Guide)

Updated 24.10.2025

There’s a quiet moment every expat experiences after arriving in the UK — that first drive on a country lane, the first morning commute through winding hedgerows or leafy suburbs. It’s often a mix of exhilaration and unfamiliarity. Yet before that moment comes something rather more practical, and occasionally exasperating: finding car insurance that doesn’t cost a small fortune.

For expats and new residents, the process of insuring a car or van in Britain can feel strangely at odds with the open, international world we live in. A driver may arrive with ten years of accident-free experience in Italy or South Africa, yet find themselves quoted the same premiums as a 20-year-old who has never held a licence before. It’s an old problem — one that newer, technology-driven insurers are beginning to challenge — but understanding it is the first step to navigating it successfully.

The Challenge of Affordable Insurance for Expats

Car and van insurance in the UK has always been shaped by data. Every detail, from your postcode to your occupation, informs a risk score that determines how much you’ll pay each year. For most long-term UK residents, that system feels predictable, even fair. But for newcomers, the experience can be frustrating.

Traditional insurers rely heavily on British driving and credit histories — two data points that new arrivals simply don’t have. Without them, the system defaults to caution, categorising the driver as “high risk.” The result can be eye-watering premiums, sometimes double what a UK-born driver with the same experience might pay.

It isn’t about distrust or discrimination, but about the way the UK’s insurance algorithms were built. Many date back decades, long before mobility became the norm. They were never designed to consider a no-claims record from Spain or a driving licence from Singapore. Instead, they assume that what can’t be verified locally simply doesn’t exist.

This gap between old systems and new lifestyles is precisely where innovation has taken root.

Why Expats Often Pay More

The higher costs faced by expats have several roots. The most obvious lies in documentation. A British insurer can easily confirm a UK licence or retrieve a no-claims record through national databases. But when a driver arrives from another country, those records aren’t accessible in the same way. Unless the driver’s insurer back home provides formal verification — which many don’t — the UK system essentially starts them from scratch.

There’s also the question of credit. Many insurers use credit history as part of their risk modelling, not because it directly predicts how one drives, but because it helps gauge reliability in payments. Newcomers to the UK, no matter how responsible, simply don’t have that financial footprint yet.

And then there are the nuances of geography. Postcode ratings — a central feature of British underwriting — can amplify or reduce premiums depending on where one lives. A quiet street in Kent may score better than a city-centre postcode in Manchester, regardless of the driver’s personal record.

All of these factors combine to make the process feel arbitrary for expats. But recent years have seen a quiet revolution.

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The Rise of Inclusive, Tech-Driven Insurers

Until recently, the idea that an insurer would look beyond local data was almost unthinkable. But in 2017, a London-based company called Marshmallow began doing just that. Its founders, twin brothers Alexander and Oliver Kent-Braham, saw that expats were routinely overcharged simply because existing systems couldn’t see their history. They built an insurer around the opposite principle — one that uses data, not borders, to assess risk.

Marshmallow began as a digital-first platform that looked for patterns beyond the UK’s standard databases. It asked new arrivals to share details of their international driving experience, allowing the company to recognise the value of those years behind the wheel. In other words, it gave newcomers credit for what traditional systems ignored.

That idea struck a chord. Within a few years, Marshmallow had become one of the UK’s fastest-growing insurance providers, earning “unicorn” status with a valuation over £1.5 billion. But its significance lies less in its headline figures and more in what it represents: a shift toward fairness, accessibility, and technology in a sector long known for opacity.

Today, Marshmallow isn’t alone. Other digital insurers and brokers are starting to take similar approaches, using open banking, telematics, and real-world driving data to tailor pricing more accurately. Yet for expats, Marshmallow remains a name often mentioned first — particularly for those seeking affordable car or van insurance without having to rebuild their reputation from zero.

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Understanding the Affordable Angle

Affordability in insurance isn’t just about a cheaper price tag; it’s about a fairer calculation of risk. For expats, that means being recognised for the years of safe driving accumulated elsewhere.

Marshmallow’s “Essential” tier, for instance, was created to appeal to drivers who want basic yet legally sound cover without paying for additional extras. It’s fully digital, allowing users to manage their policy and documents online, and flexible enough to adjust payments monthly — a relief for anyone juggling international finances in their first few months in the UK.

The company’s technology draws from alternative data sources to assess risk more precisely. Instead of relying solely on local databases, it considers the information drivers provide — including international experience — to produce a more accurate, and often more affordable, premium.

For expats insuring vans — whether for small businesses, trade work, or delivery purposes — these modern models can be particularly valuable. Commercial vehicles often attract higher base premiums, but inclusive insurers that assess actual usage patterns rather than generic averages can make a measurable difference in cost.

*Policy features, eligibility, and pricing depend on individual circumstances. Always review full terms before purchasing.

**Marshmallow was the cheapest for 83% of our UK newcomers: Based on a 2024 survey of 619 Marshmallow policyholders who are new to the UK.

The Realities Behind “Cheap” Insurance

It’s worth noting that “affordable” doesn’t always mean “lowest price.” In the UK, legally, every driver must carry at least third-party cover — the most basic form of insurance — but going too cheap can be false economy. Some low-cost providers exclude essentials such as windscreen repair, personal accident cover, or courtesy cars during repairs.

This is where the new wave of digital insurers aims to stand apart: offering transparency. Policies like Marshmallow Essential are explicit about what is and isn’t included. Drivers can upgrade to comprehensive cover that includes theft, fire, and personal protection if needed. The model is designed for control — allowing expats to start with affordable cover and adjust it as they settle into life in the UK.

Transparency is especially important for those unfamiliar with British insurance language. Many newcomers find the system’s terminology opaque — “excess,” “no-claims bonus,” and “protected cover” are rarely used elsewhere. Choosing a policy that explains these terms clearly, ideally in plain English, can prevent costly misunderstandings later.

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Making Your Premium Work Harder

There are also practical steps expats can take to keep premiums low. The first is to document everything. If you can obtain proof of a no-claims record from your previous insurer, even a letter confirming your history, many UK insurers — particularly inclusive ones — will accept it.

It also helps to exchange your foreign licence for a UK one when eligible, as this can simplify verification. Keeping your vehicle parked off-road or in a secure garage can further reduce risk ratings. And where possible, paying annually rather than monthly avoids interest charges sometimes added to instalment plans.

Beyond these basics, expats who drive regularly for work might consider telematics — insurance that uses real-time data from a smartphone or small device to assess driving habits. These “pay how you drive” models reward careful behaviour and can gradually lower premiums as positive data accumulates.

A Practical Comparison

Imagine two drivers living in Canterbury. One is a UK resident with five years of local driving history; the other, a 34-year-old professional from Spain who has driven for 12 years without an accident. The local driver, insured through a mainstream provider, pays £820 a year for a mid-range family car. The expat, through traditional channels, receives quotes of £1,450 to £1,600 — almost double.

Yet when applying through an inclusive insurer such as Marshmallow, where international experience is acknowledged, that same expat might receive a quote closer to £950 — still slightly higher, but far more equitable.

*These figures are for illustration only and not representative of actual quotes or guaranteed savings.

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The Experience of Expats

For many expats, affordability isn’t just about economics but about a sense of belonging. Being penalised for having lived elsewhere can make a newcomer feel invisible to the systems they’re trying to integrate into. Fair insurance helps change that.

Across forums and relocation groups, drivers often share stories of how their first UK policy felt like an uphill battle — endless requests for documents, unexpected premium hikes, difficulty contacting insurers. What they value most about the new generation of providers is not only the cost but the simplicity: being able to upload a driving record online, renew automatically, and speak to customer support through an app instead of waiting on hold.

In reviews, expats often mention clarity as a deciding factor. Being able to see each cover option explained in straightforward terms, with fees and add-ons visible from the start, builds trust in a market that has not always been known for it.

Balancing Cost, Service, and Security

No insurer, however, is perfect. While digital-first providers have improved accessibility and pricing, some expats still prefer the reassurance of traditional insurers with physical branches or established reputations. It’s a personal decision, shaped by comfort level and complexity. Those with high-value vehicles or unique driving needs may find that a mainstream provider remains best suited.

The important thing is to recognise that the market has diversified. Expats now have options — and choice itself is a form of affordability. For van drivers or tradespeople, comparing at least three quotes from different categories of insurer (mainstream, digital, and specialist) can often reveal surprising differences in both price and coverage.

Your own Car Insurance Directory on Moving to the UK is an ideal place to begin that search, as it brings together providers that explicitly welcome expat and international drivers.

The Broader Shift Toward Fairer Insurance

The rise of companies like Marshmallow is part of a wider evolution in financial services. In the same way that digital banks such as Monzo and Revolut changed the way people manage money, inclusive insurers are changing how people protect their vehicles.

Technology has made it possible to personalise pricing in ways that once seemed impractical. Artificial intelligence can interpret international documents; telematics can verify driving behaviour; open data can confirm address stability even without a long UK credit record. These developments allow insurers to base pricing on real behaviour rather than assumptions.

In time, this will likely narrow the gap between UK-born drivers and newcomers entirely. For now, it already offers meaningful relief — enough to make car ownership viable for many who would otherwise rely solely on public transport.

Navigating the First Year

For expats who have just arrived, the first year of driving in the UK is a period of adjustment. Traffic rules differ, road signage may feel unfamiliar, and the infamous roundabouts can take some practice. During this stage, choosing an insurer that allows policy flexibility — easy updates to address, mileage, or vehicle type — is often more valuable than squeezing the last pound from the premium.

Many expats also discover that British insurers reward continuity. Staying with the same provider for several years, particularly if claims are handled well, can reduce premiums over time. Some insurers offer loyalty discounts or recognise multi-year no-claims history accumulated within the UK.

If you plan to stay long term, it’s worth thinking strategically: start with an inclusive insurer that offers fair entry pricing, then gradually move into broader cover tiers as your UK record strengthens.

A Note on Vans and Small Businesses

For expats running small enterprises — delivery services, trade work, or self-employment — van insurance is a necessity rather than a choice. It can also be a significant expense, especially for those new to British business regulations.

Inclusive insurers such as Marshmallow are expanding into this space too, offering van policies structured much like their car insurance, with flexible payment terms and clear documentation. For newcomers setting up a company vehicle for the first time, the ability to manage everything online is often a major advantage.

That said, business-use vehicles may still require tailored policies. Checking whether your insurer classifies your van as “social and commuting” or “commercial” use is crucial — the wrong classification can invalidate a claim. The best approach is to discuss your specific use case during sign-up and confirm that your cover matches your intended activity.

The Importance of Regulation and Trust

Affordability should never come at the expense of safety or legitimacy. Any insurer operating in the UK must be authorised by the Financial Conduct Authority (FCA) — a mark of regulatory oversight that protects consumers. Marshmallow Financial Services Limited, for instance, holds this authorisation (FRN: 797672) and operates under strict FCA conduct rules.

Before committing to any policy, it’s sensible to check the insurer’s FCA status and read

Before committing to any policy, it’s sensible to check the insurer’s FCA status and read at least a handful of customer reviews on platforms like Trustpilot or Smart Money People. Patterns matter more than individual complaints: look for consistency in how claims are handled and how customer service responds.

Transparency, again, is the most reliable sign of an insurer worth trusting.

Finding Balance in the UK Insurance Landscape

The landscape for car and van insurance in the UK has changed dramatically in the past five years. What was once a rigid, opaque industry is now becoming more inclusive, transparent, and flexible — values that align closely with the lives of expats themselves.

Affordable doesn’t mean basic, and inclusive doesn’t mean experimental. It means recognising the realities of modern mobility: that experience earned abroad still counts, that data can tell a more accurate story than assumptions, and that fair pricing can coexist with profit.

As the market continues to evolve, the advantage increasingly lies with those willing to explore newer models, test different providers, and insist on being seen for who they are — not just where they’ve lived.

For expats settling into life in Britain, that’s more than a matter of cost. It’s a small but meaningful part of feeling at home.