Changing your Car Insurance Guide

Making sure that your new car is covered

If you buy a new car or have to replace your old one for any reason, you’ll need to keep your insurer in the loop about changing your motor insurance to cover your new vehicle. Although you’ll probably want to get out on the road in your new car as soon as possible, updating your car insurance needs to be a priority so that you’re still covered when driving.

Do I need to cancel my insurance policy when buying a new car?


When you buy a new car, you will likely be able to transfer your existing car insurance to a new vehicle rather than needing to take out an entirely new policy, but this can depend on your insurer.

The main thing that you’ll need to do is inform your insurer that you’ve changed your vehicle and that you’ll need to change the terms of the cover. Not doing this can invalidate your policy and cause problems with future claims if an accident were to occur

Is there a charge for updating my car insurance with a new car?

 

Typically yes, there will be an administration charge to amend the terms of your car insurance cover. Your insurance policy will state this within the terms and conditions section, so it’s worth checking your specific policy for details around this.

The charge to update your car insurance policy with your new car will usually be at least £25, but the overall cost will be determined by the details of the new car, if you’re buying a car in a higher insurance group (either more expensive or powerful) this is likely to result in a higher premium.

You also need to update your insurer straight away if there’s any change to your details, such as a change of address or you get a driving conviction, rather than waiting until you need to renew. This ensures your details are completely up-to-date and accurate in the event that you do need to make a claim.

Will the cost of my insurance change when buying a new car?

 

The cost of your insurance could potentially end up being higher, lower, or around the same – it all depends on what type of car you buy. One of the biggest factors which will have an impact is the value of your new car.

If your new car has a considerably higher value than your old one, then you will almost certainly see your premium increase in order to factor in the higher cost of repairs or a replacement vehicle if you were to get into an accident.

Do I need to stay with the same insurer when getting a new car?

 

There’s no need to stay with the same insurer if you don’t want to when you get your new car, but usually it will be the cheapest option because you only need to pay the administration fee to transfer your policy. It may still pay to shop around at this stage however as there may be alternative providers that offer a cheaper rate, based on the new vehicle regardless of the administration fee

If you were to cancel your existing to policy in order to start a new one, there will be a cost attached to the cancellation which will could potentially be more than the transfer fee.

One exception to this could be if your existing policy is about to run out anyway, in which case it might make more sense to start a new policy for your new vehicle and do a price comparison to find the best deal for your new vehicle.

When do I need to arrange cover for my new car?

 

When you will need to arrange cover for your new vehicle will depend on what sort of purchase you’re making.

If you’re buying a second-hand or used vehicle, you’ll want to be sure that you have cover starting the day you’re picking up the car. That way, you’ll be covered in case something happens on your way home, as sometimes used vehicles can breakdown a lot sooner than you might expect. Not having cover could also result in a fine, points on your licence and potentially even the loss of your new car.

If you’re buying a new car from a dealership, they could offer you free car insurance or breakdown cover for a certain period as an incentive. This can be helpful as it allows you to drive away your new vehicle and spend some extra time comparing car insurance quotes. It’s worth asking when you’re looking at cars from a dealership if they do offer free insurance on new cars.

Changing Car Insurance FAQs:

Can you change your car insurance policy at any time?

It’s possible to change or cancel your insurance before the policy expires. You might do this because you changed your car or sold it, or you want to add extras to your policy. The first thing to do is call your insurer to talk about the changes you want to make, and they’ll be able to inform you of the process and any costs or refunds.

When should I cancel my car insurance after switching?

You should only cancel an existing policy once a new policy is providing you with insurance, so there’s no gap in cover for your car. When you take out a new policy you can choose the date cover begins, so you should make sure this begins as soon as your old cover ends.

Does switching car insurance affect credit?

Insurance providers may check your credit details when you compare quotes, but this type of check doesn’t affect your credit score. When you apply for an insurance policy and you want to pay monthly, then a provider will do a more thorough credit check. Unless you’re refused credit by the insurer, this shouldn’t negatively impact your credit history.

Do you get a refund if you cancel motor insurance?

If you cancel your car insurance within the initial cooling-off period (usually 14 days from when the policy starts), you should be provided with a refund, minus the time the policy was active and any other admin fees.

If you cancel your car insurance after the cooling-off period, any refund depends on how much time is left on the contract and any cancellation fees the provider might have, as well as any extras you have on your policy.

Remember that cancelling your insurance mid-way through the policy means you’ll lose the no-claims bonus for that year.