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?
When you're selling your car, you don't have to cancel your car insurance and start again.
In most cases your insurer will transfer the policy to the new car and issue a new certificate of insurance.
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.
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 look around for a new insurer, but bear in mind that there'll be a cancellation fee.
If you do want to change to another insurer, it may be better 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.
Otherwise you could register the old car as being off the road using a SORN (Statutory Off Road Notification), but that's only effective if you plan to keep it 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.
What about the vehicle 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.
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 (automatic emergency braking) compared with a similar model without AEB is likely to be in a lower insurance group.
You may get a lower quote premium if it has a security device, such as a Thatcham-certified alarm.
Should I let my insurer know on the day I buy a new car?
It's certainly essential to arrange cover for your new car before you pick it up. When you drive without insurance you risk a £300 fine and 6 penalty points on your licence, and even having the uninsured vehicle seized by the police.
So if you buy a car before selling your old one, contact your insurer as soon as possible to make sure that you're covered for both cars.
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.
Tell your insurer the vehicle registration number and this will give them its specification. Remember that you have to declare if there are any modifications to the car, so check with the previous owner.
Some modifications to the original specification can increase the premium, as they present a higher risk than original components. And if your car has more than 3 modifications then it may be harder to get an affordable quote.
Tow bars and parking sensors are not modifications.
Can I arrange my insurance start date for a new car in advance?
You can normally get a quote or buy your insurance up to 30 days before the policy start date.
The quote premium should remain valid as long as your details are unchanged.
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 one 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.
Author: The AA. Published 20 November 2018. Updated 22 August 2024.