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Changing car insurance to a new car: A complete guide

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There’s a lot to sort out when you’re buying a new car, from arranging finance to getting rid of your old one, but in the rush to get behind the wheel, it’s vital you don’t forget to change your car insurance. Find out how to transfer car insurance to a new car with our handy guide.

Can I transfer my car insurance to a new car?

If you are planning to get rid of your old car, you should be able to transfer your existing car insurance policy onto your new set of wheels. 

Thankfully, the process of transferring insurance from one car to another is pretty simple too.

You will need to provide your insurer with all the relevant information about your new car and there may be an admin charge to pay, but it shouldn’t be too arduous a process.

You can transfer your insurance onto a new car at any time in the policy year – you do not need to wait until the policy runs out.

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Get in touch with your existing car insurance provider

You can either do this over the phone, via email, online or using its online chat service

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Make sure you have all the relevant information to hand

This will include the make and model of your new car, as well as its registration number

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Tell your insurance company about any modifications to your new car

This includes any changes that affect either the appearance or performance of the car, from air conditioning, paintwork and tinted windows to seat replacements or uprated brakes. Your dealership should be able to tell you about any mods to your new car, or if it’s a private sale, make sure you check with the owner

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Tell the insurer about any other changes to the policy

Your insurer will also want to know if there are any other updates to the policy that are required. In addition to information about the car itself, it will also want to know whether your annual mileage is likely to change, where the new car will be parked overnight and whether there will be any changes to how you use your car, such as commuting

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Agree a date to transfer insurance to your new car

It’s important your insurance is arranged before you get behind the wheel, so time it for the day you collect it

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Your insurer will confirm the cost of your car insurance changes

Using the information you’ve supplied, your insurance provider will tell you how much it will cost to transfer car insurance to a new car and, if you agree, the policy will be updated

The cost of transferring car insurance

The car you drive plays a huge part in determining the cost of your car insurance, as cars are classed into one of 50 insurance groups. It will affect the amount the insurance company might need to pay out if it is stolen, the damage it could cause in a collision and the cost of repairs.

That means it’s highly likely your new car won’t cost the same to insure as your old one. If it is newer, more valuable, or has a more powerful engine, the cost of your car insurance is likely to go up.

You will need to pay this additional cost upfront, before the  policy is updated. Or, if you pay for your car insurance monthly, the increase can be spread across your remaining payments.

Alternatively, if you’ve downgraded to a smaller, cheaper car with a less powerful engine, the cost of your insurance will more than likely go down. In this case, your insurance provider will pay you a refund if you paid the full year up front, or reduce your payments if you pay for your car insurance each month.

Whether the cost of your car insurance goes up, down, or even stays the same, there is likely to be an administration fee for transferring insurance from one car to another. This varies between insurance companies and could be anything from £10 to £50. In some cases, you might be able to pay a reduced administration fee, or avoid paying one altogether, if you submit your car insurance changes online, so always check first.

It is important to note that this administration fee will be charged whenever you make a change to your car insurance, not just when you transfer your policy to a new car.

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When is the best time to transfer car insurance to a new car?

It’s a good idea to contact your car insurance company as soon as you have agreed to buy the new car. 

Time the transfer for either the day of collection or the day before. This will ensure you are covered in time to collect your new car and drive it home. Bear in mind that at this point you will no longer be insured to drive your old car, so don’t transfer your car insurance to the new car any earlier than necessary.

If you’re buying from a dealership, you may be given temporary insurance to tide you over until you have arranged your own policy, but always check first.

What will happen if I don’t transfer my car insurance to a new car?

Driving any car without insurance on UK roads is a criminal offence.

That means if you are caught driving your new car before you have arranged the necessary insurance, you could be hit with a fixed penalty of £300 and get six points on your licence. In a worst case scenario and you were taken to court, you could get an unlimited fine and be disqualified from driving. Your car could also be seized by the police.

Another point to consider is that if you start driving your new set of wheels without asking your insurer to transfer your insurance to the new car, you won’t be insured if it’s stolen or you’re in an accident.

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Frequently asked questions about changing car insurance to a new car

There’s no requirement for you to transfer your car insurance to a new car. If you think the cost of your existing policy has gone up too much, or you can get a better deal, you are free to cancel your car insurance and take out a new one with a different insurer.

However, you do need to bear in mind that there will be an administration fee for cancelling your current policy ahead of time, which could be as much as £50. If you haven’t claimed on your insurance, you will also lose the opportunity to get another year on your no claims discount if you cancel your cover early. 

You will have to balance both of these factors with the savings offered by the new deal.

If you haven’t traded your old car in, or sold it yet, you have two options. One is to keep the policy on your old car running and take out another one for your new car. You can then cancel the insurance on the old car once you have sold it. Or, if you want to sell the car quickly, you can transfer your current policy onto your new car and take out temporary car insurance on your old one until it is sold. Temporary car insurance is normally available from periods of one hour to 28 days and is easy to arrange.

Even if you have no plans to drive your old car before it has sold, don’t be tempted to cancel your insurance. To avoid paying insurance and tax on it, you would need to apply for Statutory Off Road Notification (SORN).

There are a number of occasions and changes of circumstance that you will need to tell your insurance company about. 

This includes:

  • Getting married and changing your name
  • Moving house and changing address
  • Changing jobs
  • Accidents – even if you don’t make a claim
  • Driving convictions
  • Modifications to your car

If you aren’t sure, contact your insurance company and they will tell you if you need to change your policy. You can often update your cover online.

If you are replacing your car with a van, you might wonder if you can change your existing car insurance policy. Unfortunately, this isn’t normally possible because van insurance is tailored towards business use with different types of cover, for example cover for tools and other equipment.

You will only need to transfer your insurance onto your new car once you have agreed to the sale. That said, the car you drive can have a huge impact on your insurance costs, so for your own peace of mind, it is always worth finding out how much your new car will cost to insure, before you commit to buying it.

Yes. It’s illegal to drive on UK roads without a minimum of third-party insurance, so it’s vital you are insured to drive your new car when you pick it up. If you haven’t taken out a new insurance policy or transferred your existing insurance onto the new car, you won’t be covered.

The only exception might be if your current policy includes permission to drive other cars (some comprehensive policies offer this, but not all). However, this would only provide cover on a third-party basis, meaning it wouldn’t pay for any repairs to your car if you were involved in an accident on the way home, so it’s not an ideal solution.

Molly Dyson

Editor

After growing up with a passion for writing, Molly studied journalism and creative writing at university in her home country of the United States.

She has written for a variety of print and online publications, from small town newspapers to international magazines. Most of her 10-year career since relocating to the UK has been spent in business journalism, writing and editing for admin professionals at PA Life magazine and business travel managers at Business Travel News Europe and representing those titles at conferences around the world.

Now an Editor at the Independent Advisor, Molly is an expert in a broad range of consumer topics, that include solar panels and renewables, home improvements and home insurance, and consumer technology such as home security and VPNs.

In her free time, Molly can usually be found exploring the outdoors with her husband and their young son or gardening.