Car insurance cancellation fees

Brown_eyes

I took out car insurance with Yes Insurance at the start of December as we needed a second car for my partner's work, but he has since lost his job and we cannot afford to run two cars anymore. I have just phoned to cancel the policy and been told that not only will I have to pay £35 cancellation fee, but also £36 ish in 'short term fees'. What are these and can they charge me them, considering my policy was only third party on a rubbish car at £25 a month? My partner says just cancel the direct debit they have no right to charge it, but I'm not sure!

dunstonh

What are these and can they charge me them

Short term car insurance is normally more expensive than long term (annual). So, the increase is due to that. Cancellation charge is as it sounds.

Both are fair and lawful.

My partner says just cancel the direct debit they have no right to charge it, but I'm not sure!

Car insurance paid for monthly is collected under a credit contract. So, if you dont pay, they can show it as a default on your credit file. They can also start action against you for collection of the payment which will typically mean passing the debt to a collection agency.

So, not paying will damage your credit file for the next 6 years.

woodys_wonders

Your Insurers are correct, you took out an annual contract with them which they allowed you to pay on direct debit, but it is still an annual contract.
As you are terminating this contract they will charge you for the time on cover plus administration costs.
If you have not paid enough on direct debit to cover these costs they will ask you to pay the difference.