How to Cancel My Car Insurance Policy Early
Maybe you've sold your car. Maybe you're switching to a new insurer. Or maybe you've just spotted a better deal and can't justify staying put. Whatever the reason, cancelling a car insurance policy before it's because of end is doable - but it's not always free or fuss-free.
So, how do you cancel your car insurance early without stepping on a financial landmine? Let's walk through it clearly, no eye-watering surprises, no confusing jargon, and no raised eyebrows at the call centre.
Can You Cancel Your Car Insurance Before It Expires?
Yes, you can cancel your car insurance policy at any time. There's no law stopping you. But there's a catch: most insurers will charge a cancellation fee, and if you're paying monthly, there may be an extra balance to settle. The earlier in the policy you cancel, the more you're likely to pay - or lose.
Still, if you're no longer driving the car or switching to a better-suited policy, it can be worth it. Just go in with your eyes open.
How to Cancel: Step-by-Step
- Contact your insurer - This is usually done by phone, although some allow cancellations online or in writing. Always ask for confirmation in writing once done.
- Provide the right info - You'll likely need your policy number, vehicle registration, and reason for cancelling.
- Check what you owe - You may be asked to pay a cancellation fee, remaining monthly payments, or a finance settlement if you're paying through credit.
- Return any documents - Some insurers want their certificate of insurance or proof of cover returned (or confirmed destroyed).
Just imagine: you assume cancelling your policy is as simple as stopping a subscription. You don't call, you don't confirm - and weeks later, you get a bill for missed payments and a default notice. All because the insurer never received formal cancellation. Always get it in writing.
What Will It Cost Me?
That depends on your insurer and how far into your policy you are. Common costs include:
- Admin or cancellation fee - Typically between 25 and 65 pounds
- Outstanding monthly payments - If you're mid-way through, you might owe more than expected
- No refund if a claim has been made - If you've claimed on the policy, you may not get any money back
Also, any extras you paid for - like breakdown cover or legal protection; may not be refunded in full unless specified in the terms. If you're still in your 14-day cooling-off period, the fees are usually lower, but you'll still pay for the days you were insured.
Does Cancelling Affect My No-Claims Bonus?
If you cancel before the end of a full year's cover, you won't earn a no-claims bonus for that policy. Some insurers may honour partial years in special circumstances, but it's rare.
So if you're two months away from clocking up another year of no-claims? Think carefully before pulling the plug early. Losing that discount could cost more over time than the small monthly saving you gain by cancelling.
Should You Cancel - or Let It Run?
If the policy is nearly up, it might make more sense to let it run its course - especially if the cancellation fee is close to what you'd save. But if you've changed cars, moved abroad, or no longer need the vehicle, cancelling early might be the right call.
One driver cancelled with six months left after selling their car. Yes, they paid a 55-pound fee; but they saved over 300 pounds in future payments. In that case, the numbers made sense.
Switching Insurers? Time It Right
If you're cancelling to switch providers, make sure your new policy is active before ending the current one. Even a single day without cover can result in a lapse on your record; and potentially a fine if you're caught driving.
Click here to compare car insurance quotes now - see if switching early could save you money and get a fresh policy that suits your current situation better.