Compound insurance

What is compound insurance?

Compound insurance (also called impound insurance) is a special type of temporary car insurance policy that typically lasts for 30 days.

If your car is seized and impounded, you’ll need to show it’s insured for at least a month to get it back.

If you don’t have valid insurance or your existing policy won’t cover impounded vehicles, you’ll need to buy compound insurance to fill the gap. Cover is immediate, allowing you to get your car back on the road as soon as possible.

If your car’s been impounded, standard temporary car insurance may not be accepted. Unfortunately, there’s no such thing as one-day impounded car insurance.

Why do I need compound insurance for an impounded car?

If your car is impounded, you’ll need to provide proof of insurance that’s valid for at least 30 days to have it released – no matter what the offence. The policy must cover the release of a vehicle that’s been impounded by a government authority.

Your car may have been impounded because you weren’t insured, so you’ll need to arrange cover to get it back.

If you already have a standard car insurance policy, it’s important to check that it will cover you for releasing your car.

According to Freedom of Information (FOI) requests made by National Scrap Car, more than 214,000 vehicles were seized by the police in the UK in 2023. The most common reason vehicles were impounded was due to the driver being uninsured or not holding a valid driving licence.

Why are cars impounded?

The police, local authorities and the DVLA all have the right to seize and impound vehicles. Your car might end up in the pound because it was:

• Stolen, then found by the police

• Involved in a crash

• Parked illegally on roads or private land

• Blocking the road or causing an obstruction

• Being used for crime or anti-social behaviour

• Being driven in a careless or inconsiderate way that could cause alarm or distress

• Abandoned or left broken down

• Uninsured

• Untaxed and parked on a public road

• Untaxed and parked on private land, but without a Statutory Off Road Notification (SORN)

• Driven by someone without a licence or insurance.

The police seized my car. How do I get it back?

If your car’s been seized, the first thing to do is find out where it’s been taken. If you don’t receive a notice letter, you can call 101 and ask the police which pound has your car.

If your car was seized because it was untaxed, you could also call NSL – the company that enforces car tax payments for the DVLA – on 0343 224 1999.

The exact process to get your car back depends on the police force that impounded your car and the reason your car was impounded – check your notice letter for instructions.

You’ll normally need to go down to the car pound – or in some cases, a designated police station – to prove your identity and your ownership of the car, then pay the release fee and any other charges.

You’ll need to do this within the timeframe on the notice letter you’re sent by police. If your car was seized because you were driving uninsured or without the correct licence, or the car wasn’t taxed, then you’ll need to reclaim your car within seven working days of the date on your notice letter. If your car was impounded for another reason, you may have up to 14 days.

If you fail to collect your car in time and pay the required fees, it will be sold or scrapped by the police.

How much does it cost to release my car from the pound?

Once you’ve tracked down your car, you’ll need to pay a fee to have it released. The amount you’ll need to pay depends on the weight and condition of your vehicle. You’ll also have to pay a storage charge for each 24-hour period that the car has been impounded – full or partial.

In most cases, if the vehicle isn’t badly damaged and is on the road, the charges are:

For the full list of fees, go to GOV.UK.

What are the legal requirements if my car has been seized?

If your car is seized under Section 165A of the Road Traffic Act 1988, you’ll receive a form 3708 seizure notice. This means that the police suspected that the driver of your car was either uninsured or improperly unlicensed, or that the vehicle was untaxed. In this case, you’re normally required to pick up your car within seven days of the date on the notice letter.

If it’s impounded for another reason, you may have more time – check the instructions on your notice letter.

Either way, you’ll need to take the following documents with you when you go to reclaim your vehicle:

• The seizure notice or penalty ticket

• A valid driving licence (plus photo ID, such as your passport, if you don’t have a photocard licence)

• Proof of ownership (your log book)

• A valid MOT certificate (or proof that you’ve booked a test)

• Proof of insurance that covers the release of impounded vehicles.

If you don’t want your car back, you’ll need to ‘disclaim’ it. To do this, go to the pound with proof that you own the car and proof of your identify. There might be a disposal fee to pay – £96 for a car – and you’ll still have to pay any parking fines.

What happens to my car if I don’t pay tax?

Not paying your road tax is one of the reasons your car might be impounded. If your car is seized because you haven’t paid your car tax, you have two options:

• Pay your road tax and take the receipt with you, along with proof of identity, vehicle ownership and valid insurance, to get your car released from the pound.

• Pay a £160 surety fee (deposit) to release your car without paying your road tax upfront. You could choose this option if you need to take your car for its MOT before it can be taxed, or if you want to make a SORN

  so your car is officially off the road.

If you pay a surety fee then buy car tax within 15 days of the car’s release, you may be able to get a refund. However, you won’t get your surety fee back if you get or keep a SORN.

Where can I find impounded car insurance?

You may find that your current policy covers you for retrieving an impounded car. But not all policies do, so check the small print and contact your provider if you’re not sure.

You might be able to add impounded car cover to your policy. If not, you’ll need to get specialist impounded car insurance. If your car has been seized because it wasn’t insured, you’ll need to find a specialist insurance provider who’ll accept you and give you a compound insurance quote.

Compare the Market doesn’t offer a comparison service for impounded car insurance. But if you need a new policy once your car is released, you can compare car insurance with us.