Short Term Car Insurance

Hello all,


I have a question with regards to short term car insurance, my situation is described below:
  • I am going abroad from January for 6 months, I will be declaring my car SORN during this time.
  • However my current insurance policy finishes at the end of this month, therefore I have a 2 month period that I need to insure my car for.
  • What is the best way to do this?
  • Do I need to take out specialist short term cover?
  • Or shall I start a new policy then cancel? Basically trying to figure out the cheapest option.
Any advice is appreciated.
Thank you, Ed

Comments

  • An annual policy is usually the cheapest option, as you can cancel pro rata. This means you'll only be charged for the number of days you've been on cover.

    One thing to be wary of is the cheaper policies normally have the biggest fees when cancelling, it's not unusual to charge up to £75 in a fee. Plus then, if it's a policy via a Broker, the Broker may reclaim any commission loss from any refund due to you.

    My advice would be to use a direct writer (and take out a policy directly), Direct Line, Aviva, LV or the like, which will remove the commission element and mean you only pay one cancellation fee. You should find these fees in the key facts documents which will be available on the insurer website.

    The other thing to consider is still using a cashback website. If the policy is live for 2 months you may just qualify for cashback on the purchase, lessening or perhaps negating the cancellation fee you'll inevitably be charged.
  • mattk_180
    mattk_180 Posts: 375 Forumite
    Similar to above, just take an annual policy being mindful of the cancellation fees and then cancel when you no longer need the policy.


    Will still likely be cheaper than a temporary policy which are usually extraordinarily expensive and should only be used for a very short amount of time.
  • Quentin
    Quentin Posts: 40,405 Forumite
    mattk_180 wrote: »
    Similar to above, just take an annual policy being mindful of the cancellation fees and then cancel when you no longer need the policy.....
    The "catch" in doing this is that should you need to claim or a successful claim is made against you then you will have to pay for the full year's premium, (and lose some NCD if it's unprotected)
  • Quentin wrote: »
    The "catch" in doing this is that should you need to claim or a successful claim is made against you then you will have to pay for the full year's premium, (and lose some NCD if it's unprotected)

    Fair point. Also worth mentioning then, if you pay for the policy in installments, and make a claim, the insurer can chase you for the full annual if you cancel mid-term.
  • mattk_180
    mattk_180 Posts: 375 Forumite
    Yeah, what these guys above me said.


    Basically just take everything that has been said and consider which route you want to go down looking at the pros and cons.
  • rs65
    rs65 Posts: 5,682
    First Anniversary Name Dropper First Post Combo Breaker
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    Have you considered leaving insurance in place? Are you happy to have it uninsured whilst you are away?
  • eddddd
    eddddd Posts: 8 Forumite
    Hi All,


    Thanks for the comments, that's really helpful.
    Will make some calls and keep you updated.


    Any idea what the value of the cancellation fee is likely to be?
  • Quentin
    Quentin Posts: 40,405 Forumite
    The actual cancellation fee is like a piece of string (varies from nothing to £75+)


    Each company decides its own policy on this fee.


    Also expect a charge for cancelling early if paying by monthly instalments, plus different companies operate their "pro rata" refund differently - so if you cancel after 6 months check whether they refund you the whole of the "unused" 6 months (also beware brokers who may also charge separate cancellation fees/clawback lost commission/clawback any "special" discount etc)
  • forgotmyname
    forgotmyname Posts: 32,517
    First Anniversary Name Dropper First Post
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    My insurer charge £15 admin fee but my daughters is £75. But needs must when everyone else is coming in at over £1000 for the year.

    We dont intend on claiming ourselves, so fingers crossed there wont be any issues.
    Censorship Reigns Supreme in Troll City...

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