Can I keep insurance on a car I have sold?

Fromply

I bought 12 months car insurance on 1st June 2014 for £182.


I have now sold the car and notified my insurance company that I wish to cancel the policy (with just over 5 months remaining on the policy).


I have just received their response .... "We can cancel your policy with effect from the 23 December 2014. After taking into account the time you have been insured, and your cancellation fee of £75.00 an outstanding amount of £14.19 remains" ... they then give me the address I can send a cheque to to make payment, or a telephone number if I want to make payment over the phone.


I have to pay them to not use 5 months of my insurance policy? It sounds crazy to me .....


Can I just leave my policy in place, even though I don't have the car any more?

Aretnap

Fromply wrote: »

Can I just leave my policy in place, even though I don't have the car any more?

That's potentially risky. If you leave your policy running and the new owner doesn't insure the car, then if the new owner has an accident your insurer can end up being liable for the third party costs under the terms of the Road Traffic Act. Your insurer could then attempt to reclaim their outlay from you, as you'd breached the terms of your policy by not cancelling it when you sold the car. See here for an example.

We have occasional discussions on here about the finer detail of the law and whether or not the insurer would actually be successful if they took you to court in those circumstances, but personally I would not want to risk finding out for the sake of £14.19.

lisyloo

It's a really bad idea for the reasons outlined by Aretnap.

Marktheshark

The car would still be insured for third party risks as is required by Law.
It would also show as Insured on MID.
A savy dodgy buyer might spot this and ride around on your insurance for 5 months causing all sorts of issues.
Do not even go there, sell the car, cancel the insurance.

Quentin

Fromply wrote: »

I have now sold the car and notified my insurance company that I wish to cancel the policy ....................

Can I just leave my policy in place, even though I don't have the car any more?

Although from some of the posts here from those inside insurance companies might appear so, the companies themselves are not as daft as all that.


Now you have notified your company they are going to smell a rat should you attempt to withdraw the cancellation.


Just pay up (not worth the consequences should they discover you deliberately carried on the policy to save money etc) and put it against the cost of selling your car.

Fromply

Thanks for the feedback everyone.


I have just spoken with the insurance company, and what they have done instead of cancel the policy is to suspend it, pending potential transfer to another vehicle. I am not aware of a limit (time wise) that the policy can be suspended for. So the £75 admin fee has not been charged and no payment has been due.