Contrary to popular beliefs, scrapping a vehicle is a very simple process. All you need to have is a bit of knowledge of the process beforehand so that you don’t face any hardships along the way. One of the most troublesome aspects for most car owners when scrapping their cars is the implication of car insurance. Car owners aren’t sure as to who will be liable for the insurance when they will scrap their cars and the time frame when the liability will get transferred. They will also be concerned about the paperwork.
Hence, if you’re on the same boat and not sure about the implications of your car insurance when scrapping your vehicle, then you’ve arrived at the correct juncture. In this comprehensive guide, we at Wellington car wreckers will be answering all of your questions relating to car insurance & car scrapping, as in-depth as possible.
Should You Cancel Your Vehicle Insurance Before Scrapping Your Vehicle?
It depends on the current state of your vehicle. It’s always suggested that you contact your car insurance company before opting to scrap your vehicle. The following two scenarios will help you understand the situation better:
1. When Your Vehicle Is Stored Or Parked On The Road
In case you store your vehicle on the road – even if your vehicle has been immobile for some time – it’s illegal to not have an active insurance policy. Thus, the vehicle will be your responsibility until the scrap car company collects the same, after which the responsibility is transferred to the company.
Therefore, the ideal course of action would be to keep the insurance policy until the scrap car company takes away your vehicle for scrapping.
2. When Your Vehicle Is Stored Or Parked Inside Your Property/Garage
If you store or keep your vehicle inside your property or garage – whether you drive or not – there’s no such legal obligation for you to have insurance. Doesn’t matter where you store your vehicle inside your property, the rules remain the same – be it on the driveway or inside the garage – there’s no difference.
You must also remember that there’s no need to pay vehicle tax when your vehicle is off the road and you can opt for the refund of the advance tax you’ve paid beforehand. However, you must remember that during such an uninsured timeline, your vehicle will not be covered in case of any theft or damages.
Hence, it would be ideal to simply consult your insurance provider regarding the same before you decide to cancel the policy because your peace of mind is more worth than any amount of money.
What To Do When You Have A New Vehicle To Already Replace The One That’s Being Scrapped?
As a vehicle owner, you don’t want to ensure two vehicles at once – not only for the extra money that you have to pay but also deal with the added paperwork & hassles.
So, if you can manage the purchase of your new vehicle correctly and receive it on the day when you scrap your old vehicle, then you can simply inform your car insurance service provider to simply amend the car insurance policy.
Should You Change Your Car Insurance Service Provider When You Get A New Vehicle In Place Of The Scrapped One?
There are many vehicle owners out there who utilize the change in their vehicle as a perfect opportunity to change their car insurance service provider – ultimately trying to obtain better customer service.
However, that’s not possible at all times. This is because some insurance providers will only provide you with a partial refund of the advance policy amount that you’ve paid while others will ask you to stay with them till the end of the current policy term. Once the policy term will end, you’ll be able to opt for a better insurance policy elsewhere.
Therefore, it’s better to just contact your insurance service provider and see what’s the solution is. Always remember that it’s the job of the customer service section to retain customers and keep the customers happy – so ensure that you obtain the full benefits.
When Should You Insure Your Vehicle?
If your vehicle is running on the road or parked on the road, then you have to get your car insured. But, if you store your vehicle inside your property and do not drive it, then there’s no such legal obligation to have it insured.
Should You Worry If You Delay Letting Your Car Insurance Service Provider Know That You’ll Be Scrapping Your Vehicle?
Yes. It’s always ideal to keep your insurance service provider stay notified regarding the entire process of scrapping so that you don’t have to continue paying the policy premiums for a vehicle that will no longer be yours. In some cases, not letting the car insurance provider know can attract fines as well.
So, make sure you take care of your car insurance policy before scrapping your vehicle.
