It is illegal to sell your car without valid insurance cover. So, it is crucial to ensure that you have appropriate cover in place. What’s more, if you sell an uninsured car, you won’t be able transfer ownership to the buyer.
This also makes it illegal for the buyer to drive the car – and leaves you liable for any fines they may incur. (You’ll also be liable for any release fees if the vehicle gets impounded.)
Prospective buyers may also be wary of driving an uninsured car on a test drive, as this could invalidate their own insurance.
If you own a car with SORN (Statutory Off-road Notification) status that is uninsured, you’ll need to re-tax it and arrange temporary car insurance before letting any viewers drive - or buy the vehicle.
In this guide, we will cover key topics around car selling and insurance, including whether you should cancel your insurance policy after selling your car - and whether you’ll be eligible for a refund after doing so.
Get a free valuation
Can I sell my car without insurance cover?
No, it is a legal requirement for car sellers to have valid insurance for their vehicle. You could run into a variety of issues, such as being unable to transfer ownership.
If you’ve got an uninsured car, you could take out a temporary car insurance policy, which will provide short-term comprehensive cover to enable you to sell your car.
What happens to insurance when you sell a car?
When you sell a car, the first thing you should do is contact your insurer to explore your options. If you’re changing cars, you might be able to transfer your existing insurance policy to your next car.
You might find it best to end your current insurance policy and take out a new one, either with the same insurer or a different provider.
Should I cancel my insurance when selling a car?
If you aren’t replacing your car, you should cancel your car insurance. However, if you are planning to buy a newer model, you might be able to transfer the policy.
When do I cancel my insurance when selling a car?
You can do this at any time. However, when you request to cancel your policy, make sure the last day of cover is the day after you will transfer ownership to the buyer. If you can, contact your provider in advance.
If you own a new and old car simultaneously, some insurance providers can offer you temporary cover for both vehicles. You should cancel the auto-renewal of the insurance for your old car if you know you’re going to sell it soon - and take out a short-term policy instead.
However, you should also be aware that this option may be slightly less cost-effective, whilst providing less comprehensive cover.
How to cancel your car insurance
In 2022, new legislation was introduced requiring insurers to make cancelling insurance as easy it was to buy in the first place.
If you want to cancel your car insurance, your policy number is the only information you’ll need.
Contact your provider to tell them why you want to cancel your insurance. They’ll tell you if there’s an early exit fee - and whether any further paperwork is necessary. Make sure to request proof of your no-claims bonus, as this will remain valid for two years.
Will I get a refund on my car insurance when I sell my car?
Depending on the amount of time remaining on your policy and what is written in its terms and conditions, you might be entitled to a partial refund. (There’s still a chance this will be offset with an administration fee, which could cost £50 or more depending on your policy.) You can find out whether refunds are available by consulting your original insurance contract.