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Cancelling car insurance
elizlin
Posts: 19 Forumite
My 17 yr old son has car insurance on an old mini,he was paying direct debit £140ish a month,the car has now been sold and he's not having another car for a while (insurance too high).I phoned to cancel the policy which has 6 months left,i was told that it would cost £327 to cancel.Is this right?Is there any way of avoiding paying so much?
I would be grateful for any advice,Thanks.
I would be grateful for any advice,Thanks.
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Comments
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Ask them to itemise the £327 and take it from there. Check the policy to see what charges apply when you cancel, and if these are being correctly applied, then nothing he can do except pay up - alternatively if they seem wrong then dispute them.
When paying by instalments, apart from cancellation fees and any extra premium due, there is often an early settlement fee to pay regarding the credit agreement.
Any add ons (eg legal expense cover/breakdown cover) aren't usually refunded at all.0 -
,i was told that it would cost £327 to cancel.
That will not likely be the cost of cancellation but the total of all costs.
He has effectively borrowed money to pay an annual premium in instalments. The monthly instalment is not always in sync with the amount due. Plus, cancellation,whilst relatively pro-rata will be slightly out. e.g. cancelling at 6 months may see a 40% refund and not a 50% refund.
If the amount is broken down you would typically expect £x to be outstanding premium, £y to be a cancellation charge and £z to be the cost of non-refundable addons, if any.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
You need a breakdown.
There could be finance arrangements fees as well as the things already mentioned.
Breakdown cover, legal insurance are not usually refunded.
You'd need to post up the breakdown before anyone can help further.0 -
Thanks for your replies,on the policy it says if you cancel at 6 months the charge is 75%,could you tell me 75% of what.Insurance for the year worked out at approx £1900,Thanks0
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From what you say, 75% of the annual premium.0
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Also ask them why they allowed a person under 18 to have credit (paying monthly)This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0
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