Budget has struck a multi-million pound deal with car buyers' bible, Auto Trader, to become its insurance service provider.

The deal, which is expected to generate more than £30m in gross written premium in the first year, will edge Budget closer towards the top ten UK brokers.

Budget is currently number 12 in the list.

Matthew Donaldson, Budget's group director, said the deal was worth an estimated £3m profit for the group.

Donaldson said its online policy comparison tool, Comparethemarket.com, would replace Moneysupermarket.com on the Auto Trader website.

He added that as well as giving users access to discounted deals from Budget's panel, it would assess the best policies available on the high street.

Auto Trader has estimated that 4.8 million people visited its website last year.

Donaldson said: "This is the biggest motor website of its kind online, and will help us to achieve our goal of 1.9 million new policies by 2008."

Auto Trader said the deal would support its plans to expand its insurance offering.

Jason Biffin, head of e-commerce at Auto Trader's publisher Trader Media Group, said: "We have ambitious plans to growour insurance and finance income over the next year.

"We believe the Budget Group is well placed to help us achieve our [financial] targets of £4.5m to £5m in 2006/07."