Selling your car can be an exciting step, whether you’re upgrading to a new model or choosing to downsize. But while it’s easy to focus on the sale process itself, one important detail often overlooked is what happens to your car insurance once the vehicle changes hands.
Below, we break down what you need to know.
1. Cancelling or Transferring Your Insurance Policy
When you sell your car, the insurance you had on that vehicle can’t simply be passed on to the new owner. Car insurance policies are tied to the policyholder and their driving profile, not the car alone.
You have two main options:
- Cancel your policy: If you don’t plan on getting another vehicle right away, you’ll need to contact your insurer and cancel the cover to avoid paying premiums for a car you no longer own.
- Transfer to a new car: If you’re replacing your sold car with another one, most insurers allow you to transfer your policy to the new vehicle with an updated premium based on the new car’s risk profile.
2. Notify Your Insurer Immediately
It’s crucial to inform your insurer as soon as the sale is complete. Delaying could create issues if the new owner has an accident and the car is still registered under your policy. In extreme cases, you could even be held liable for claims if your insurer isn’t notified in time.
3. Refunds on Premiums
If you cancel your policy partway through the month or year, you may be eligible for a refund on any unused premiums. This depends on your insurer’s terms and conditions, so it’s best to clarify when you call to cancel.
4. Protecting Yourself During the Sale
Until the car officially transfers to the buyer and is registered under their name, keep your insurance active. This ensures that if anything happens during test drives or while the vehicle is still in your name, you’re not left unprotected.
5. Choosing Cover for Your Next Vehicle
If you’re buying another car, this is a good opportunity to reassess your insurance needs. Different makes and models come with different risk profiles, meaning your premiums may go up or down. It’s also a great time to shop around and compare quotes to ensure you’re getting the best deal.
Final Thoughts
Selling your car doesn’t just end at handing over the keys—it also means responsibly managing your insurance. Cancel your old cover, transfer it if you’re buying a new car, and always notify your insurer promptly.
If you’re looking for reliable cover with flexible options, Pineapple Insurance offers an easy and transparent way to manage your policy when buying or selling a car. Taking these steps will give you peace of mind and ensure you’re never caught off guard during the transition.