60-second summary
Key takeaways if you’re looking to cancel your car insurance policy:
Your provider may charge you a cancellation fee, and you may not receive a full refund for any unused coverage.
You’re entitled to a 14-day cooling-off period after taking out car insurance, during which you can change your mind without penalty.
Cancelling midway through your policy could affect your no claims discount.
If you decide to switch before your policy is up for renewal, make sure the savings outweigh the cancellation costs.
Having a new policy in place before cancelling the old one ensures you’re not left without insurance.
Can I cancel my car insurance policy?
Yes, you should be able to cancel a car insurance policy at any time, even if you’ve paid upfront for 12 months.
Just bear in mind that you won’t automatically get your money back and your insurance provider may charge you a cancellation fee.
How do I cancel my car insurance policy?
Cancelling your car insurance should be pretty easy, although each provider might have a slightly different procedure. Some will let you cancel your policy online, while others will want to speak to you by phone.
To cancel your car insurance:
Have your car insurance policy number to hand
Get in touch with your insurance provider (it must be the policyholder who does this)
Let your provider know you want to cancel your car insurance and ask what fees are involved – it will usually ask why you’re cancelling, as it may try to persuade you to stay
If you’re taking your car off the road, you must register it as SORN with the DVLA.
Top tip
If you want to continue driving your car, make sure you have a new policy in place before you cancel your current one. It’s illegal to drive, or even park, on UK roads without car insurance. Doing so could land you with a £300 fine and six points on your licence.
Will I get a refund if I cancel my car insurance during the cooling-off period?
When you take out a car insurance policy, you’re entitled by law to a ‘cooling-off’ period.
That means you have at least 14 days from when you receive the paperwork to change your mind about your insurance, cancel your policy and get a refund.
If you cancel and transfer your car insurance within the 14-day cooling-off period, you should be entitled to a refund minus any days the policy was active.
But check the policy terms and conditions because you may need to pay an administration fee too.
Will I get a refund if I cancel after the 14-day cooling-off period?
It depends. You should be prepared to pay cancellation charges or admin fees if you cancel your policy early.
Any charge could potentially cancel out or reduce any refund you were expecting.
It’s also worth considering the following:
If you paid for your policy in full upfront, your refund will be calculated on a pro-rata basis, minus any charges. For example, if you cancelled your policy after three months, you’d get a refund of nine months, minus any provider fees.
If you pay for your insurance monthly, you might not get a refund. In fact, you might have to pay extra to cover the time you’ve been insured, as well as a cancellation fee and any admin charges.
Add-ons are often non-refundable. And be aware that if you have optional extras with another company, for example breakdown cover, you might need to cancel those too.
If your insurance provider decides to cancel your policy for a specific reason, it’s unlikely that you'll receive a refund.
Can I cancel my car insurance if I pay monthly?
There’s nothing to stop you from cancelling your car insurance if you pay monthly. Just tell your insurance provider that you want to cancel and it'll arrange it for you.
You’ll probably have to pay a fee, which may be described as an administration, arrangement, processing or cancellation fee by your insurance provider. This fee can vary among providers and depend on when you cancel the policy. Make sure you know what to expect before cancelling.
Don’t just cancel your direct debit and assume your car insurance is cancelled too. You’ll need to let your insurance provider know before you stop the payments.
Can I cancel my insurance if I’ve made a claim?
Yes, you can. If you’ve paid upfront, though, you probably won’t be eligible for a refund.
If you pay in monthly instalments, you’ll still have to pay for any remaining time you have on your policy, or you can pay it off as a lump sum in one go. The same applies if your car’s been written off.
Car insurance cancellation fees
Cancellation fees can vary among providers and policies. Here’s how much the following sample of providers typically charge to cancel a car insurance policy:
Insurance provider[1] | Cancellation fee (within 14-day cooling off period) | Cancellation fee (after 14-day cooling off period) |
|---|---|---|
Admiral | £25 (may be up to £125 for telematics policies) | £60 (may be up to £160 for telematics policies) |
AXA | £0 | £52.50 |
Aviva | £28 | £56 |
Esure | £29 | £67 (£58 with Flex policies) |
Hastings Direct | £0 | £45 |
John Lewis | £0 | £40 |
LV= | £0 | £40 |
RAC | £25 | £45 |
Saga | £0 | £50 |
Tesco | £25 | £50 |
[1] Figures correct as stated on providers' websites May 2025.
Can I dispute car insurance cancellation fees?
You can try to dispute the cancellation costs, but you may not be successful.
A better option is to make sure you know exactly what the car insurance cancellation fees are before you take out the policy, so you’re not hit with any surprises.
If you think the charges are excessive and you can explain why you think they’re unfair, talk to your insurance provider directly.
Don’t forget to keep a record of dates, times and points of discussion, as well as keeping copies of any correspondence – emailed or written.
This evidence will help if you’re unsatisfied with the outcome and want to take your case to the Financial Ombudsman Service (FOS).
Should I cancel my car insurance for a cheaper policy?
You’re well within your rights to switch before the renewal date if you find a cheaper deal elsewhere. But it will only be cost-effective if the savings from switching outweigh the cancellation fees.
If you cancel mid-policy, you also won’t earn the current year’s no claims bonus, which could affect future premiums.
If you’re looking to cut costs before renewal, it might be worth speaking to your current provider to see if it can offer you a better deal. Sometimes it'll match or even beat competitor prices to encourage you to stay put.
What happens if my insurance provider cancels my policy?
There are a few reasons your insurance provider might cancel your car insurance policy. This could be because you’ve not kept up with your payments, or you’ve violated the terms of your policy somehow.
If that’s the case, you’ll no longer be covered and will need to sort out new cover immediately.
It’s illegal to drive a car without insurance, so you need to either get new cover or declare the vehicle as SORN (off the road) by registering the change of status with the DVLA.
You may find it more difficult to get a new insurance policy if you’ve had a previous one cancelled, and you’ll need to declare this to every new insurance provider in the future.
Just be as honest as possible, as it’s always worse to be caught out in a lie. You may need to find a specialist provider if you’re finding it hard to get cover.
FAQs
If I sell my car, when should I cancel the insurance policy?
You should cancel your car insurance as soon as you sell your car. If you no longer own the car and aren’t intending to buy another one, there’s no point in paying for cover you don’t need.
Also be aware that if you don’t cancel and the new owner has an accident, a claim could still be made against your insurance.
Do I need to cancel my existing car insurance policy if I buy a new car?
If you’re selling your car to buy a new one, you can talk to your provider to see if you can transfer your policy to the new car.
This could be less hassle than cancelling and taking out a new one — just make sure your provider can insure your new car.
You might be charged an admin fee for changing your policy, and the cost of your car insurance could go up or down, depending on the model of your new car. But it still may be simpler than taking out a whole new policy.
Should I cancel my insurance if I register my car SORN?
Although you won’t need insurance if you declare your car as SORN, it might still be worth having it in some form to protect your car against fire and theft.
If you do decide to cancel your car insurance completely, you’ll need to get in touch with your provider as it won’t be cancelled automatically.
Should I cancel my car insurance or let it auto-renew?
If you can save money by moving to another provider, it may be worth cancelling your policy, rather than letting it auto-renew.
We know that auto-renewing is less hassle. You don’t need to do anything and you won’t run the risk of being uninsured. And since January 2022 insurers haven’t been allowed to charge you more as an existing customers than you would pay as a new customer.
However, auto-renewing every year means you could be missing out on potential savings by choosing a different provider.
Your renewal quote might not be the cheapest available, so it’s worth shopping around for a better deal.
You can compare a wide range of car insurance provider deals with Compare the Market to see if you could save money.
Don’t cancel a car insurance policy if it leaves you uninsured. Driving without car insurance is against the law and you could end up in court.
Will I lose my no claims bonus if I cancel my car insurance?
If you cancel your insurance mid-policy then, yes, you’ll probably lose that year’s no claims discount (NCD). That’s because you can only earn the discount after one full year of claim-free driving.
Missing out on a year of NCD might not make much difference if you’re already getting the maximum discount. But if you have less than nine years of NCD, cancelling could mean losing out on future savings.
Will I lose my multi-car discount if I cancel a policy?
Yes, if you have a multi-car policy, you’ll lose your discount if you remove a vehicle during the policy term. The provider will adjust the premium for the car or cars left on the policy.
Does cancelling car insurance affect my credit score?
Cancelling a car insurance policy shouldn’t hurt your credit score directly. However, if you pay monthly and cancel your direct debit without letting your insurance provider know, you might be penalised for missing payments on a policy that is still active. Missed payments can negatively impact your credit score.
How can I avoid paying the cancellation fee for car insurance?
To avoid paying car insurance cancellation fees, you can either cancel during the 14-day cooling-off period or wait until your policy is up for renewal.
However, not all insurers will let you cancel during the cooling-off period. Carefully check the terms and conditions before signing up.
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With more than eight years’ experience in writing and sub-editing content, Karen started her career in fashion before making the move to insurance. She now specialises in producing clear, engaging content that helps people make better financial decisions.
Karen’s areas of expertise include insurance products, such as car insurance, travel insurance and life insurance, as well as utilities such as energy comparison.
Stephen Maunder is an experienced personal finance editor, having spent more than a decade working for consumer print and online titles. He won several industry awards for his personal finance features at Which?, before becoming Deputy Editor at Compare the Market.
Amy helps make sure you get the best value when choosing insurance. Thanks to more than four years’ experience at Compare the Market, she understands what people look for, working closely with insurance providers to offer you deals and services that are fair, easy to understand and right for your needs.
Our content is written by a Compare the Market expert, backed by data and enhanced by technology. Find out how we ensure accuracy and quality in our Editorial Guidelines.
