Everything you need to know about transferring insurance when you buy a new car

Do I need to cancel my current policy and get a new one?

Most insurance providers will allow you to transfer cover from one vehicle to another, but you’ll need to cover admin costs. Before you buy a new car it’s important to know exactly how it will affect your premiums; otherwise you could get a nasty financial shock. Make a note of the vehicle registration, make and model and get in touch with your broker for a quote.

Is it worth considering changing insurance providers?

In certain circumstances it may be worthwhile cancelling your current policy and comparing quotes from new providers. It’s a question of crunching the numbers and your insurance broker will be happy to help. You’ll need to include the following in your calculations: cancellation costs, the new premium, and the fact that you probably won’t earn any No Claims Discount for the year. In most instances it doesn’t make financial sense to switch providers, but it’s certainly worth a shot. One exception is if your current policy is about to end, when it might be cheaper to simply take out a new policy without cancelling your existing cover.

What does it cost to transfer cover?

The cost of amending or cancelling cover varies between providers and if you have used a broker to help you find cover you will usually have to pay them an administration fee of up to £50.00, in addition to any charge from the Insurer. Details can be found in your policy Terms & Conditions or by calling your insurance broker. You might have to pay an additional premium if your new vehicle presents more insurance ‘risk’ (say you’re upgrading to a gleaming new 4×4) or you may pay less if you’re buying a more modest motor.

What if the car dealership is offering me free insurance for a year?

Dealerships are always looking for ways to make sales and some offer ‘a year’s free insurance’ to help sweeten the deal. However, it’s worth remembering that ‘there’s no such thing as a free lunch’ and you’re probably paying for the product elsewhere. That doesn’t mean it won’t make financial sense, but it does mean you’ll have to do your homework. If you have an existing policy that isn’t worth cancelling you may be able to use the ‘complimentary cover’ as a bargaining chip to knock something off the purchase price.

What happens if I’m buying a second vehicle?

If you’re getting another vehicle in the household it’s well worth asking your broker about multi car insurance. It’s a flexible and convenient way to insure up to five vehicles and you’ll often be rewarded with lower premiums. Most insurers will allow you to transfer No Claims Discounts between policyholders, but as always ‘the devil is in the detail’ so carefully check the small print.

What if I’ve got comprehensive insurance and can Drive Other Cars?

In the not too distant past comprehensive cover commonly allowed policyholders to Drive Other Cars (DOC) with third party insurance. However, in recent years the situation has changed and DOC cover tends to be an ‘additional benefit’ rather than a standard feature. The result is that policyholders may mistakenly believe they are covered for DOC when they are not. Either way it’s worth noting that DOC provides the minimum cover needed to drive legally and that doesn’t include any damage to your new vehicle.

Is there anything else I need to know?

It’s important that your insurer knows exactly when you want cover to be transferred to the new vehicle or you could find yourself driving illegally or seriously out of pocket if you need to make a claim.

 

 

 

 

 

 


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