Car Insurance Cancellation Charges

daniella79

I have just returned my car to the lease company as it was the end of my contract. On cancelling my insurance I have been informed that I will be charged £107 fees!! I informed the insurance company that I have had to close my Business due to the virus and still I am being asked to pay these astronomical fees!! I expected an admin fee but certainly not as high as £107.  I also have a private number plate and as DVLA are only available for key workers I was not able to retain my document online. I had to pay £50 admin to Audi!! Is it just me or are these companies taking advantage of the current situation when their customers are at their lowest!!! Any advice would be much appreciated with regard to the insurance fees. Many thanks 😊 

[Deleted User]

It's just you.  They're not taking advantage, which you can verify by checking the cancellation terms in the policy.

Insurance is an annual policy unless you specifically buy a monthly one, which is far more expensive.

dunstonh

I have been informed that I will be charged £107 fees!!

£107 doesnt sound like a fee. Most cancellation fees are round figures (usually rounded to zero or five).  This is most likely inclusion of premium or non-refundable extras or finance (if paid monthly)

Is it just me or are these companies taking advantage of the current situation when their customers are at their lowest!!!

Its just you.   Companies publish their terms and you agree to them when you purchase.    So, there should be no suprises.

Any advice would be much appreciated with regard to the insurance fees.

The first thing is to find out what the £107 is.  It almost certainly is not the cancellation fee.  Some if it could be but some of it will be something else.

Were you paying the premium monthly?  - it sounds like you were.  So, you are borrowing money under a credit agreement and the payments will not be in sync with the cancellation terms.  So, some premium will be outstanding. Plus, the finance company will want their share of the interest for the period covered.

Did you have any bolt ones to the insurance (breakdown, legal expenses etc)?  some of these are non-refundable as you are buying a years worth and are not vehicle specific.   If you were paying monthly, you still owe on these in full.

Cancellation terms will not be pro-rata to the day.  They will typically be rounded to the month or next month.  There will be some weighting applied. e.g. cancel after 1 month and you may have to pay 2 or 3 months premiums.  Whereas later in the year, the weighting becomes less as it heads towards being more pro-rata.