TESCO car insurance - Cancellation fee ripoff

Granny_Bear

I've been with Tesco Car insurance for 6 years, a loyal customer, and my policy was renewed about 2 - 3 months ago.

Just recently I've decided to change my car, I phone up Tesco Car insurance today to let them know that I now longer have my current car, and on Tuesday I will be driving a different car.

They took all the details and inform me that based on the new car I would be paying a further £130 / year which in my eyes was very steep.

I thought that it would be interesting to see what online quotes are (through moneysupermarkey), and I got a quote from a reputable mainstream company for £60 less than what I was paying for the car Ive just sold. Tesco's wouldn't provide me with a yearly amount for their insurance but from what I can work out, the difference is nearly £200 !!!!

I then decide that if Tesco are not going to be competitive I will cancel my policy with them and go with this other company. When I am going through the cancellation procedure I am then told there will be a £30 cancellation fee.

I said that surely the policy was against the car which I no longer have, and if you cant be competitive when quoting for another car, then why should I be penalised if I decide to leave.

However they did not budge saying the cancellation fee stands, and even though I am a loyal customer there is no goodwill gesture at all.

I am really annoyed it seems Tesco's have people over a barrel when they change their car mid-policy, they can quote any figure they like and if you don't agree and want to leave, they will sting you with a £30 cancellation fee instead.

Has anyone had any experience of this ?? I feel like its such a scam.

I moved house back in December and changed insurance company mid-policy because they were too expensive for their new quote. They didn't charge me for doing that, I don't see why Tesco's think they can.

dacouch

£30 for a cancellation fee is actually fairly low.

Saying you're a loyal customer and a business should therefore waive their cancellation fee is a bit of a contradiction.

st999

I had that problem when I bought a new car, it was actually cheaper for me to leave the old insurance running than cancel it, even though I no longer had the car.

forgotmyname

From posts on here it seems some companies charge £75 admin fee.

So £30 wont seem so bad compared to them. There are cheaper companies but the premium maybe more in the 1st place.

Its not just Tesco that have you over a barrel. Lots of others see you as a captive customer and charge accordingly.

They see it as you pay up the increased premium and they win. Or you cancel and pay the fees and they win.

dunstonh

TESCO car insurance - Cancellation fee ripoff

£30 is hardly a rip off.

I said that surely the policy was against the car which I no longer have, and if you cant be competitive when quoting for another car, then why should I be penalised if I decide to leave.

You are the one breaking the contract. Not them. You are the one creating the admin. Not them.

even though I am a loyal customer there is no goodwill gesture at all.

You are not loyal. You are taking your your business elsewhere. There is no goodwill

Has anyone had any experience of this ?? I feel like its such a scam.

Paying a fee for a service/admin is not a scam. £30 is very reasonable. If you dont like it then why did you buy it in the first place?

I don't see why Tesco's think they can.

Because one model is to include the cost of admin in the annual premium and the other is to pull out the costs of admin and charge them explicitly (and have a lower premium).

DCFC79

They dont sting you, you could have found this out before you changed the car.

Granny_Bear wrote: »

they will sting you with a £30 cancellation fee instead.

No scam here, its standard. £30 sounds fair to me.

Granny_Bear wrote: »

Has anyone had any experience of this ?? I feel like its such a scam.

Cant say what was in the terms for your house insurance but Tesco can charge £30 because they can, much better than say £75.

Granny_Bear wrote: »

I moved house back in December and changed insurance company mid-policy because they were too expensive for their new quote. They didn't charge me for doing that, I don't see why Tesco's think they can.

Granny_Bear

dunstonh wrote: »

£30 is hardly a rip off.

Paying a fee for a service/admin is not a scam. £30 is very reasonable. If you dont like it then why did you buy it in the first place?

Really... please do tell me how £30 is reasonable ?!??

Why did I buy it ?! I bought an insurance policy for a car. I hadn't thought about changing my car at that point in time.

dacouch

Granny_Bear wrote: »

Really... please do tell me how £30 is reasonable ?!??

Why did I buy it ?! I bought an insurance policy for a car. I hadn't thought about changing my car at that point in time.

Who is your new quote with? I would be surprised if their fee for cancellation is less than £50

Granny_Bear

dacouch wrote: »

Who is your new quote with? I would be surprised if their fee for cancellation is less than £50

Look my single point with this is... I take out an insurance policy for a car, I then sell the car, surely that insurance policy contract is over ?

What happens is that they lock you in, so if you ask to insure a new car they can quote you any figure they like. If you continue then they are quids in, if you cancel they are quids in.

dacouch

Granny_Bear wrote: »

Look my single point with this is... I take out an insurance policy for a car, I then sell the car, surely that insurance policy contract is over ?

What happens is that they lock you in, so if you ask to insure a new car they can quote you any figure they like. If you continue then they are quids in, if you cancel they are quids in.

They provide a price for twelve months assuming you will require no more administration until renewal when they hope you will renew.

The price includes any costs they paid to acquire your business which if you went via a comparison site could easily be more than £30.

The charge is to cover the costs you've caused them

forgotmyname

Granny_Bear wrote: »

Look my single point with this is... I take out an insurance policy for a car, I then sell the car, surely that insurance policy contract is over ?

What happens is that they lock you in, so if you ask to insure a new car they can quote you any figure they like. If you continue then they are quids in, if you cancel they are quids in.

That is exactly how it works. The thing is you are changing the contract terms not them.
Your changing the car because you want to not them telling you to change it.

Change your car when the policy ends. Sorted with no added costs.