The new initiative, backed by underwriter RBS Insurance, is part of a wider plan to expand the Sainsbury’s Finance division.
David Fisher, chief executive of Sainsbury’s Finance, says: “Our aim is to significantly grow our insurance business over the next five years and motor insurance is key to this strategy.”
Nectar card customers could receive a discount of up to 15% on their premiums and double points on their shopping for two years if they take up the new insurance deal.
Previously Sainsbury’s offered motor insurance in partnership with esure.
It is thought that Tesco current has a 5% share of the British motor insurance sector.
Tesco furthered its move into the automotive market with the launch of a second hand car sales website in April.