What do I do about car insurance when buying a new car and trading in my old one?
We are planning on buying a new car soon and trading in the old one. How does insurance work? I’d like to shop around for the cheapest deal but that isn’t possible if I don’t know what car we are getting yet. Also I have only just renewed my car insurance this year. Will there be a penalty if I cancel that policy?
August 24th, 2010 at 6:25 am
hi there.
Between picking your new car and them having it ready for you to take, there is a gap of several days to a week.
That is when you hit the internet and get the best price on the new car, also when you inform your current insurer that you are ending the insurance policy. Whatever the actual trade day is, that is the date you use for both.
You won’t be able to just drive away your chosen car anyway, insured or not.
The car insurance company you are ending will work out how much you are due back and send you the money – without knowing who they are I ca only tell you to look at the surrender clause in your policy! Normaly it will say that they will work out how much of the policy you have used, work out how much you are owed back and then deduct administration costs (around £30) for their trouble. The exception is if you insure with them again, in which case they will transfer the policy, work out how much extra you owe for the new car and charge you that.
Good luck, Steve.
August 24th, 2010 at 7:10 am
why not just inform your present insurance company of the change of vehicle when you do change, there may be a small price to pay, but this will be offset by the cancellation charges probably imposed on you, then you can search around for cheaper insurance at your Leisure
August 24th, 2010 at 7:41 am
Upon purchase, ring an insurance company and ask them for a COVER NOTE on the new vehicle. It will be valid for abt 14 days. You will pay for it, but it’s the ONLY way to be safe. Then you can hunt up the best policy for it. Price is no guide to good policy, and no, they aren’t all the same. The old cars insurance should be cancelleable with some refund without much trouble.
August 24th, 2010 at 8:31 am
1. Cancel a policy early and you will typically pay about 2 months worth of insurance more than what you have used plus an administration fee which can be as much as £80. Your policy documentation will have the terms for early cancellation set out in it.
2. You will lose the benefit of the short term policy adding to your NCB and it may make it difficult to prove NCB to a new insurer as you do not have the renewal for the one you wish to cancel yet.
3. Most people will simply change their existing insurer.
4. Until you know what car you are getting you cannot get a quote. Once you do know your current insurer will quote you for the change if you simply ask them