Do I have to transfer my existing car insurance?
No, you don’t have to transfer insurance to another car. You can of course set up a new policy with another insurer. But think carefully and weigh up all the options before you do – it might save you a few quid.
If you do decide to cancel your existing policy and go with a different insurer, you may well be charged a cancellation fee which may be more than the fee to amend your current policy. If you’ve paid your premium up front, then you might be eligible to a refund if you cancel it but you could find that any cancellation fees actually eat up anything you’re entitled to.
In addition to this, you won’t earn any no claims bonus on your policy for the period of the year that you were insured. So if you were already eight months into your current policy and decide to cancel it, you’ll lose any bonus earned over that eight months.
However, with all of that said, if you compare the market, you might find an amazing deal that blows your current policy, fees and all, completely out the water. In which case, it makes more financial sense to go for it and take the hit on any cancellation fees.
You’ll need to cancel the policy if you no longer own the vehicle as 1) you have no insurable interest in the vehicle and 2) it could be dual insured as someone else will insure it if they buy your old car. So don’t drive your new car until you have it insured – it’s illegal to drive a vehicle without insurance – need we say more?