How do I go about cancelling insurance on a car I’m selling?
How do I go about cancelling insurance on a car I’m selling?
Life changes come to everyone at different paces. You might have gotten a promotion at work, or you feel bored with your car model. At this point, you’re yearning to buy a new car. But how do you sell your old car and cut off auto insurance without attracting any cancellation fee? You might have heard that selling your old car means you have no obligations whatsoever attached to it in case of an accident. What happens if you cancel your insurance some weeks before signing off on the car sale? In this article, we’ll advise you on how and when to cancel insurance after selling your car.
Best time to cancel your car insurance on a car you're selling
Canceling auto insurance at the right time saves money for you and can also help you switch insurance to the new vehicle you’ll be driving. To maintain a clean credit record, avoid the temptation of driving an uninsured vehicle in the midst of selling your old car and buying a new one. The best time to cancel your auto insurance is after the new owner test drives the car and completes Department of Motor Vehicles (DMV) car documentation. At this point, the vehicle won’t bear your name and whatever happens on the road becomes the burden of the new owner.
Tips on how to cancel your car insurance after the sale
1. Contact your auto insurance provider
When you sell your vehicle, your insurance provider may have no idea of this transaction. During a car sale, you’ll fill out a transfer of ownership slip which will notify the DMV of this sale. But you have to call and inform your insurer of the recent change. Some providers offer a refund for prepaid users, while others request a cancellation fee, but all of them require a cancellation agreement form to be filled. This form can be requested and filled before the date of the cancellation to help speed things up for you. Kindly fill this form and sign it before sending it back. Once your insurer gets this form, your request will be processed and approved.
2. Consider transferring auto insurance
Selling your old car most likely means you have a new one to serve as a replacement. Instead of risking any omission on your insurance plan, you can switch to a vehicle replacement plan. You won’t need to cancel your old policy; you’ll have to change its details. Your insurance provider will need to make a few changes on paper. Insurers will need relevant information like your new car’s model, vehicle identification number, and year. This means you keep the same policy but change the vehicle attached to it.
To stay protected and insured, you can always demand a cancellation form a week or two before your car sale is finalized. This gives your provider ample time to access your documents and allows your old vehicle to be test-driven safely. You also have enough time to find out the cost of cancellation and the refund on premiums.
Skipping payment on car insurance with hopes of the insurance provider canceling it will only dent your record. You can get a bill of sale from your state DMV’s website and sign it for legal documentation of the vehicle’s trade. To ensure safety, it’s advisable to sign a release of liability form to detach you from any accidents that may occur with the vehicle you sold.
Canceling your insurance on a car you sold is vital to keep you away from any legal troubles. However, in order to cancel auto insurance the right way, you have to follow the steps listed in this article.
