When you buy or sell a car, it’s not as simple as handing it over to the new owner or paying your money and driving it away. There are certain steps that need to be taken, information that has to be changed and documentation to be completed. So whether you’re buying or selling, you can find out everything you need to know about insuring a new car or changing an existing policy below.
Getting a new car can be exciting and you’ll likely want to pick it up as soon as possible to bring it home, but it’s really important to insure it with the correct level of cover and fill in any other forms of documentation that need to be completed, such as the logbook.
When you take insurance out on a vehicle, you’re not insuring the vehicle but insuring yourself. It is illegal to drive any car in the UK if you are not insured to drive it, and so even if the car is insured in someone else’s name, you must be listed as a named driver as a minimum. If you were to pick a new car up without being insured and you got stopped by the police, you could face a fine of up to £300 and six points on your licence. In some instances, the police could seize the vehicle.
With all of the above in mind, when should you insure your new car? Whether you’re picking it up from a private seller or a dealership, you must organise car insurance before you’re due to collect it. Getting a new policy only takes a few minutes and it can start immediately if requested, meaning there’ll be no delay in bringing your new car home. You’ll just need to make sure of the policy start day - you don’t want to be caught out thinking you have insurance when it doesn’t start for another 24 hours, for example.
There is currently no allowance for driving without insurance when taking a new car home. You are required to insure it before you drive it. If your car was purchased from a dealership, they may offer temporary insurance that usually lasts up to a week, however you will need to organise permanent insurance once this runs out.
In some cases, you may already have an insurance policy in place. For instance, you may be selling a car as well as purchasing a new one, in which case you will likely be insured on the vehicle you’re wanting to sell. This means that rather than taking out a new policy altogether, you simply want to alter the details on the existing one.
When you purchase a new vehicle, you should contact your insurance provider and explain that you’d like to alter the information on your policy. They may need certain details such as the registration number and the make or model of the vehicle, so do be sure that you know these before trying to arrange your insurance.
It’s also likely that your insurance premium will go up or down. This is because insurance premiums are based on a variety of factors, including the car engine size or the value of the vehicle. For instance, a Ferrari will be much more expensive to insure than a Ford, as the cost to repair the damage is likely to be higher.
Once you’ve explained the change of details and you’ve agreed to the new premium offered by the provider, the changes to your policy will likely be instant. You may be asked to provide an administration fee in order for these changes to be made. This can be anything from £10 to £30, depending on your provider.
Once the insurance policy has been altered, you will no longer be insured to drive your previous vehicle, so keep this in mind. Your new policy should arrive in the post explaining what’s changed and the altered premium. Make sure this does arrive and if it doesn’t, contact the insurance provider.
When you’ve sold your car, you have two options for your insurance - either alter the policy as described above, or cancel it entirely if you aren’t planning to get a replacement.
It may be that you’ve sold a vehicle with no immediate plans to replace it and so you’ll need to cancel your insurance policy altogether. This can usually be done, even if you’re halfway through the policy term, although you may need to pay a small administration fee in order to exit.
It’s advisable to cancel your insurance once the vehicle has been picked up by the new owner or dropped off at the dealership. You don’t want to cancel the insurance policy too early, as it would mean you’re not able to drive the vehicle at all.
Taking out, altering or cancelling insurance is usually a straightforward process, and your insurance provider will be able to assist you in these matters. Other things you should look to alter as well include vehicle tax (this can be done through the government website) and the V5C logbook. Your driving licence doesn’t need to change.
Car insurance has been a legal requirement in the UK since the Road Traffic Act was passed in 1930. So what are the consequences of owning a car that doesn’t even have a minimum of third party insurance?
There’s always confusion around car insurance and whether you can drive someone else’s car and still be insured under your policy.
Looking to buy a car privately but don’t know where to start? Use Age Co’s handy guide for all the tips and advice you need.