Question about temporary car insurance vs cancelling

DullGreyGuy

Levatorani123 said:

DullGreyGuy said:

Levatorani123 said:

Can somebody help me here please.

Because  my lease vehicle was delivered late in 2022  and I had taken out insurance from the earlier date, I am left with a 2 week gap with no insurance and returning the vehicle.

I searched for temporary cover and it is coming up  extortionate  prices of 230 a fortnight, whereas my monthly premiums are about 90 a month.

What is  the downside to taking out insurance like I would monthly and cancelling after 13 days paying  whatever is due for the two weeks plus the admin fee of £25?

Is there any problem or issue with doing this?

Thanks.

In principle no problem in doing it but you need to be very careful that you understand the cancellation terms. For example, some will charge "short term rates" for the days on cover you do have and you've already seen that those are vastly more expensive. 

What's your vehicle plans post lease car? If another vehicle is coming at the same time you may be better off transferring the policy across rather than cancelling it and buying a new one. 

No I will have about a month or so with no vehicle.

Why  is temporary cover so extortionate? Very frustrating and I dont even know how to get it back to the lease company drop off point if I dont get insurance.

Because the cost of sales is almost identical to an annual policy, last time I checked you had to pay Google c£8 per click for "car insurance" and £6.50 for "temporary car insurance". Clearly you dont get a sale each time someone clicks but the value of the sale is vastly different were you to ignore marketing costs. 

Secondly is customer stickiness... you may pay £75 to do a new business annual policy but the average policyholder stays around for 2.5 years so you can spread that costs and receive multiple premiums for it. Someone buying temp insurance is much more likely a one shot thing so the £50 to sell it comes straight off the premium rather than spread across multiple premiums. 

Finally, far few sellers of temp cover give less market pressure on prices. 

This is all before you consider the potential different in actual risk, most buyers of temp insurance dont have familiarity with the vehicle they're driving so minor misjudgements accidents more common.