Changing car insurance: all you need to know

Even if you’re not on a car finance deal, the temptation or need to switch cars every few years is high. The cost of affordable, quality new and second-hand cars is within reach for many of us, but it’s important to not forget about the need to keep your car insurance link unbroken.

Can I switch car insurance from one vehicle to another? 

The majority of insurance providers will allow you to transfer your cover from one car to another, without having to get new car insurance. All you need to do to get car insurance for a new vehicle is give your insurer a ring, or drop them an email, and provide details such as your policy number and new car registration number.

Will transferring car insurance change the cost of my cover?

Your premium could go up or down depending on the make and model of the car you're buying and its value. For example, if you currently have a small run-around and buy a powerful sports car or a 4x4 with a large engine, your insurer is likely to increase the cost. This is to meet the added risk and expense of your new vehicle.

Rather than face a potentially nasty shock, particularly if you’re planning to sell your Ford Fiesta and buy a Jeep Wrangler, it’s a good idea to run some searches for the cost of insuring your next car. Try not to get fixated on one model, as the insurance costs could prove a stretch. 

Will it cost to transfer my car insurance?

Your insurer may charge an administration fee to make changes to your car insurance policy, usually costing from £15 to £45. Once the change has been confirmed with your insurer, you should be covered to drive your new car immediately, but make sure you check.

Can I do a car insurance transfer mid-year? 

It’s not normally a problem to change insurance mid-term, providing you inform your current insurer as soon as you know what date you’ll be buying your new car. Otherwise, you’ll still be insured on the car you’re selling and not automatically covered on your new one. 

If you don’t tell your insurer you’re driving a different car you won’t be covered in the case of an accident, and you will be driving illegally as your cover is no longer valid.

Do I need to stay with my current provider when transferring car insurance?

There’s no reason to stick with your current car insurance provider unless they prove to be cheaper than the competition once you take cancellation fees into account. 

If not, you can transfer to another policy provider. Of course, you’ll need to consider the ramifications.  

Should I just get new car insurance? 

If you don’t want to stay with the same car insurance provider, the alternative is to compare quotes and switch car insurance. You might find you can get a better deal by cancelling your current insurance policy and getting new cover elsewhere. 

Your insurer is likely to impose a cancellation fee of about £50, but you should be able to get a refund for any unused cover (or your upcoming payments will be written off if you pay monthly). However, it’s important to check your policy documents carefully before cancelling, as some insurers will only offer a partial refund.

Be aware you may also lose your no claims bonus for the year if you switch car insurance to a brand-new policy.

Despite the cancellation costs, you might be able to save if you can find a cheap enough insurance policy for your new car. Start by searching on Uswitch, then see if your lowest quote would be more affordable once you’ve factored in your cancellation fee and any loss on your premium. It’s an extra bit of effort, but you might be surprised at how much you could save by switching in this way.

Insuring a new car to drive home

In all the excitement of buying a new car, it’s easy to forget to check whether you’ve got cover in place for the day you’re picking it up. 

If you’re buying a new car from a dealer, it’s likely they’ll include a temporary car insurance policy in the sale, but it pays to check. This covers you for up to seven days giving you time to arrange your own policy.

Some dealerships also offer incentives, such as one year’s free car insurance. However, you’ll need to weigh up how long you have left on your existing car insurance policy, and how much your existing insurer will charge you if you cancel, before deciding whether this is a good deal or not. 

Can I drive a new second-hand car home without insurance?

If you buy a second-hand car you’ll need to take out your new insurance policy (or amend your existing policy) before you drive the car home. Don’t be tempted to drive the car home without adequate cover — it’s not just the risk of a crash you have to think about, you’re actually driving illegally if you don’t have insurance.

That said, you may have minimal insurance cover to drive the vehicle home if you have ‘driving other cars’ permission on your current insurance policy. Check your policy carefully to see if this is included. 

Bear in mind that this will give you the minimum amount of cover to drive legally (third party), so if you get into an accident on the way home, your insurer won’t pay out for any damage to your new car.

Alternatively, you may have minimal insurance cover to drive the vehicle home if you have ‘driving other cars’ permission on your current insurance policy. Check your policy carefully to see if this is included. Bear in mind that this will give you the minimum amount of cover to drive legally (third party), so if you get into an accident on the way home your insurer won’t pay out for any damage to your new car.

What if I am buying a second car?

If you’re buying a second (or third, fourth, fifth, etc) car, you’ll have to have an insurance policy for each vehicle. Contact your current insurer to see if they offer special ‘multi-car’ policies or discounts, or take out a new policy — just make sure you compare deals to find the best price.

Even if you take out a separate insurance policy for your additional car, you must inform all insurers that you hold policies with that you have a new vehicle — the insurer will base your premium on how many cars are in the household. This might work in your favour, as they may even reduce your premium based on the fact you may be driving the original car less.

So before taking out new car insurance, consider whether you will save money staying with your current provider, whether the type of cover you need has changed, and if multi-car insurance would work best.

When else might I need to change my car insurance? 

You should always inform your insurer if any of the following changes apply:

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