Switching Car Insurance Whilst On Finance

Redwing_3

I currently have car insurance with Endsleigh.co.uk at the time, it was the cheapest available for the car I had.

My original quote was £469 (TPFT, £250 Vol Excess, 10% OD)
I couldn't afford this in an entire lump sum, so I had to opt for their monthly finance option. Increasing the cost to £512. Still the cheapest I had available, though. (21yrs old, 1 years experience)

Due to University, I moved house, changing my address I was told would cost £10. I begrudged and tried to haggle it, but they stuck to their guns so I paid it.

About 2 weeks after the change, I was notified by letter that I had moved into a "High Risk Area" and that my policy was going up to a whopping £1,055, this is more than double the original policy.

I am now stuck in an agreement where I must pay nearly £90 a month in car insurance or face their cancellation fees (as stated by their terms and conditions) which are the remaining amount of the policy. It's a business contractual wet dream. "Buy us, you can either have your policy for the term, or you can cancel, but we'll have your money anyway"

Question is, I *really* need to move/cancel or face declaring bankruptcy as I no longer have employment and being a student I can't go looking for full-time work.

My other option is to forfeit my education and work full time in an under-paid job, simply to pay my car insurance.

My questions are:
1) Can they legally force me to pay the entire policy as a cancellation fee?
2) What do I do? How do I get out of this situation? I've already used the available overdrafts to the limit, I'm skipping lectures already to go out looking for work, but as it's Christmas time and there are plenty of "cheap" workers around from secondary school, my options are somewhat thin. I'm praying that the agencies turn up something soon or I'm done for.

Mrs_pbradley936

This is common read this about a chap in similar circumstances:

http://forums.moneysavingexpert.com/showthread.html?p=3659875#post3659875

Redwing_3

Thanks for the link but this doesn't answer my question and he wasn't in the contract to start with.

I am currently in a contract with the insurance provider which has clauses which to effect, means I cannot escape paying the full policy whether I stay with them or not.

At the end of this month (27th December to be exact) I will have exceeded my agreed overdraft limit and there appears to be nothing I can do about it. Except pay "acceptable charges" for exceeding the overdraft limit, then for 2 months, I have 2 "failed to pay notices" which again are charged under "acceptable charges" (The contract with the bank agrees to charge no more than £10).

However, for each £10 over the overdraft I go, I get slapped with another £10 fine.

I am in a verge of almost severe panic and it is seriously affecting both my health and my education.

I am estranged from my parents (divorce issues) and I have no other guardians.


And all this because of A) Moving area's and Not having my job contract renewed. (Long story to this, but needless to say I had unofficially confirmed my contract be extended, they turned round to me the day before it ended and showed me who was replacing me. Not happy.)

I should also note that the car in question is a 1.3 Astra Merit, typical mileage 7000, 1996 model, value £400.

I have 2 years driving experience but until family issues, I was insured as a named driver on my parents' insurance, which meant that I did not accrue a no claims bonus. I have had no accidents, at all, in 2 years of driving. No speeding offences and I have no criminal record. I have had what the banks would call a good credit rating (going into debt, but paying it off with reasonable speed)

And now I am ruined, because of bad timing =\

Mrs_pbradley936

I was only using that example to illustrate that it is a common problem but the answer to your question is that you cannot extract yourself from this without financial penalty.

Reason: You changed the criteria upon which the original quote was given.

If this were not the case then every young driver in the country would be starting their policy off in one location for a cheap rate and moving to a more expensive location once the policy was obtained.

It is called “the small print” and I can give you lots of examples of where people have not read it and now find themselves in difficulty

Redwing_3

But can they *actually* penalised me the entire cost of the policy?

If that were the case then what would be to stop then just cranking the insurance up to 10K-15K due to "Different assessment conditions"?

Surely there has to be a legal way I can get out of the contract without paying £1,055 in cancellation charges? Even if it was only a couple hundred, it's better than just over a grand.

Mrs_pbradley936

They cannot make up prices - they give quotes and you take them or go elsewhere. So they will not give you an artificial crank up of 10K. They may well give a young driver with no no claim bonus who lives in a high crime area and parks in the street a quote of around £1000 or more some companies will be higher than that. My son who is 24 had quotes ranging from £750 to almost £3000 he went with Marks And Spencer for around £1350 because that included a courtesy car and legal assistance which were both add ons in the cheaper quotes. When he was at university he did not have a car.

I would advise you to see someone from student welfare and see if this could be reduced on compassionate grounds because it is causing undue stress. You must not ignore it or you will face consequences in the future.

Redwing_3

Thank you for your advice, at least this gives me somewhere to start.

ArchieB_2

How much longer to renewal? Are you SURE that they keep all the premium (or charge it to you as you are paying monthly).

Who is it, is it your first year with them and ultimately, do you need the car?

Redwing_3

Renewal is on 28th May 2007, I'm positive, I called them and actually asked them to confirm this over the phone.

My insurance is with Endsleigh who apparently do student deals and were, at the time of quotation, the cheapest provider.

No, I no longer *need* the car, however, it would have been nice to have and was actually affordable before the price increase, but I can live without it. I have advertised it recently in supermarkets and and in the car window. No calls as of yet though

ArchieB_2

According to the policy they will refund on cancellation. The charges they can make may well be short period rates, these should be detailed in the literature they provided. I find it hard to believe that with more than 5 months left to run, the short period rates would mean that the total premium should be paid (would be amongst the worst SP rates in the market).

You haven't made a claim have you??

I would speak to them again and ask where it details in your policy that you get no refund. In light of the fact that you were told that there would be a £10 charge and then got a letter contradicting this, I would consider using this as leverage.

anniecave

they should have told you if the premium was going to double. The £10 admin charge is just when the risk area is the same and there are no significant changes to the policy.

Will you be spending some time back at your old address anyway (for example is that where your parents are and did you spend the summer there and will you be back there for xmas and easter ? If you will be spending more of the premium year (may to may) at your old address than your new address then just ask them to amend it back to your old address. The premium is based on where you spend the majority of the time.

Is it just because of the finance agreement that you would get no refund, or is in the insurance policy itself? I would check this out?

Or keep looking for a job unfortunately......