When it comes to selling your car, you might be so focused on haggling the best price that you forget to take care of the legalities. Car tax, insurance and online forms for the DVLA are not the most exciting of tasks, but forgetting to do them could leave you in trouble.
Do I need to cancel my insurance if I'm selling my car?
Your existing car insurance
When you're selling your car, you don't have to cancel your car insurance and start again.
In most cases, if you change your car part way through your insurance term, your insurer will transfer the policy to the new car and issue a new certificate of insurance. But there's likely to be a small administration fee, and if the car has a different specification you can expect the premium to be adjusted too.
You could cancel your existing car insurance and take out a new one with a different insurer, but bear in mind that there'll be a cancellation fee.
If you do want to change to another insurer, it might be a better option to transfer your existing insurance to the new car and then switch when it comes up for renewal, especially if there's only a short time before renewal anyway.
You'll be expected to confirm that the driver, any named drivers, the location and the use of the car are staying the same, as these details impact the quote offered.
Your current vehicle tax
And don't forget about your car tax: you must tell the DVLA when you sell your car, or send your vehicle log book (V5C) to them by post. It's in your own interest to do so, as you don't want to be landed with any of the new owner's future offences and convictions.
Once you tell DVLA (preferably online) that you've sold or scrapped your car, any vehicle tax refund is generated automatically.
Swapping over your car insurance
You'll need to tell your existing insurer about your new car and any modifications you might plan to make, so they can make sure your insurance continues to cover you. If the new car is more powerful or valuable than your old car, the price of your insurance could go up. Transferring your insurance could also come with an administration fee, but this is usually a small amount.
Should I shop around for a new deal?
You might decide that getting a new car is also the perfect time for new car insurance. If you're given an attractive introductory offer, you could get yourself a bit of a bargain. However, this could just be a short-term saving as the price is likely to change after the first year. You should also consider that most insurers will charge a cancellation fee, and this is outlined in your policy booklet.
Many insurers will carry your policy over to the new vehicle, though this will come with a new quote based on the car's specifications, and results in a new certificate of insurance.
It's essential to arrange cover for your new car before you pick it up, otherwise you risk a hefty £300 fine, penalty points on your licence and even having your vehicle seized by the police.
Will car insurance for my new car be cheaper or more expensive?
New or young cars have a higher resale value and can be pricier to repair, so you might expect that they're more expensive to insure. However, your new car insurance could work out cheaper because of increased safety features. For instance, a car with AEB (autonomous emergency braking) compared with a similar model without AEB is likely to be in a lower insurance group.
You may be able to negotiate a lower premium with your insurer if you fit security devices, such as a Thatcham-certified alarm, or a tracker device.
Should I let my insurer know on the day I buy a new car?
Ideally, you should let your insurer know about your change of car in advance. In most cases you only need to tell your insurer the registration number of your new car, and the specification will pop up on their system. Remember that you'll have to declare if there are any modifications to the original specification of the car, so check with the previous owner.
If you end up buying a car before selling your old one (well, it does happen), check with your insurer as soon as possible to make sure that you're covered for both cars. Any period of grace while you own the two vehicles is up to your insurer.
We allow a 'delayed substitution' for up to 2 weeks when you have a new car and your old car at the same time. The old car must remain insured and taxed to be legal.
Otherwise you could SORN your old car (Statutory Off Road Notification, i.e. register it as being off the road), but that's only effective if you plan to keep your old car for a while and don't intend to drive it. And then, if you do decide to sell it, you won't be able to give anyone a test drive unless it is re-taxed and insured.
Can I arrange my insurance start date for a new car in advance?
It's always a good idea to let your insurer know about your new car in advance. However, insurance is a risk-based service and prices can change daily.
You can normally future date a quote by up to 60 days, and the quoted price should remain valid as long as your details remain unchanged.
While you could get a reasonable quote a few weeks before you own your new car, it's worth getting a re-quote closer to the time.
At a time when premiums are falling (since June 2017), you might find the recent quote is cheaper. But watch out, some insurers may re-quote, and if the price is higher they may cancel the old one.
What does my car insurance cover if I sell privately?
When you're selling your car privately, you'll need to keep the vehicle roadworthy so that a prospective buyer can test drive it.
Because even if their insurance allows them to 'drive other cars', it usually only applies if the car they're driving is itself insured, taxed and has a valid MOT. And finally remember, if you're insured to drive other cars, this cover is normally limited to third party only.
If you're looking to sell your car, we offer a free service to help you get a realistic idea of what your car is worth – and what car dealers would bid for your car. There's no obligation at any stage.