Does anyone know about car insurance?

[user1477249785]

Sorry this is a really basic question and I promise I've googled but it's coming up blank. I need to renew my car insurance but I'm selling my car in six months time. Does anyone know if I can buy a policy for six months only and if so where?

I feel like this should be straightforward but it isn't! I'd really appreciate any experience anyone has.

As far as I know an insurance contract is annual. I’m sure you will be able to cancel after 6 months and receive a pro rata refund (if you paid annual amount) otherwise the direct debits would just stop after 6 months.

I wondered about that but it doesn't appear to be the case (in fact I was told when I enquired that when you pay monthly you are repaying credit, rather than paying pro rata). But thanks for the suggestion - all ideas appreciated!

They are annual and will have a cancellation policy - you need to check what this is.

For example they may charge 20% admin fee or a % depending on how long is left

They will require the full premium if you have an accident in the time you are covered

Won't you be replacing it with another vehicle? If so, you just tell them and they amend the policy to the new car, and you pay the difference.

Thanks both. Ok maybe I just need to keep looking then if there are some that refund pro rata. I haven't found any yet. Won't be getting a new car so really only need 6 months.

Most short term policies are comparatively expensive, so it's probably best to just buy the cheapest policy, but be mindful of the cancellation charges which will vary. It might work out cheaper to buy a slightly more expensive policy if the cancellation charges are lower.

But they are correct in that if you pay monthly, you are repaying credit rather than just paying month to month. The whole policy is due on the date of renewal and they're lending you this amount as a loan. It's in the small print that if you write off your car the day after renewal, the cost of the policy for a whole year is deducted from your claim.

Are you able to pay the whole policy in one go, even if it means putting it on a credit card and then getting a balance transfer to a 0% card? Or by using a money transfer card? It's just that insurance companies charge quite a lot of interest on the loan.

Cheapest annual policy that is. You probably won't find one that refunds pro rata. Their justification is that the admin fees are the same whether you hold the policy for a full year or a shorter period, so they're within these rights to charge these however long you hold the policy for.

Most insurers will be happy to change the vehicle mid term or to cancel the policy for a small fee. The cheaper online insurers often change the highest fees for any changes -that’s how they make their money, as their initial premiums are so low. So they charge more for any alterations. I’d recommend calling an insurance broker and explain the situation. They should be able to recommend an insurer who doesn’t charge an excessive fee for changes. You might pay a little more initially, but their fees will be much lower for any alterations.

Another thought - how many years no claims do you have? If you have less than 9, you will still be earning it. Full no claims bonus can give you a significant discount, so you want to get to nine years as soon as you can. If for example, you only have 5 years NCB and cancel your existing policy after, say, 6 months you won’t increase the numbers of years NCB. So your next 12 month policy will also have to be set up on 5 years bonus and not 6 years. In effect it will take you 18 months to gain an additional year of NCB. It would be far better to use an insurer who will change the vehicle on the existing policy so that you gain the full year’s bonus sooner. People change vehicles all the time, so any decent broker will be able to advise you of the best insurers.