If you’re in the market for a new car, you might either be on the lookout for a bargain used model or be saving up for a new 16 plate model. Aside from making sure you get a good deal, you need to figure out what you’re going to do with your current car insurance policy.
Still have a couple of months left on it? You have two options – transferring your existing cover to your new car or taking out a new policy altogether. We’ll take you through the details of both.
Insuring your new car
The first thing you should do when buying a new car is inform your insurer. If you don’t do this and just start driving your new car, you won’t be covered if you have an accident. Without any level of insurance cover, you’re not legally valid to drive.
As soon as you’ve found a car that you like and that you’re committed to buy, you should get in touch with your insurer to change your policy. Depending on the type of car you’re buying and its value, your premiums could go up or down as a result of this. Not only that but you may have to pay an administration fee to make changes to your car insurance policy – this will generally cost anything between £15 and £45. Once your insurer confirms that your policy has changed over, you should be able to drive your new car.
This is not the only option you have though. If it turns out that your premiums would increase considerably if you transferred your insurance policy, then you may find it worth your while to cancel your current policy and shop around for a better deal. Your insurer is likely to ask for a cancellation fee (which can be around £50) to do this but you should be given a refund for any unused cover. Check your policy documents first though, as some insurers may only offer you a partial refund. If you pay monthly, your upcoming payments will be written off.
Even with these costs, you could end up saving in the long run if you shop around to find the best deal. Price comparison sites like moneysupermarket, confused.com and comparethemarket could help you do this – or you could use thinkmoney car insurance and take advantage of a discount of up to 20% if you’re a thinkmoney customer.
Buying a second car
If you’re buying a second car, you’ll need to take out an insurance policy for each vehicle. When you’re searching around for the best deal, you should enquire with your current insurer to see whether they offer any ‘multi-car’ policies or discounts for insuring more than one car with them.
Instead, you might decide to take out a separate insurance policy for your second car – if you do this, you need to inform all insurers that you have a policy with that you have a new vehicle. Your premiums will be based on how many cars you have in your household and may even fall because of this, as it’s likely that you won’t be driving your original car as much.