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What happens to my insurance when I sell my car?

What happens to my insurance when I sell my car?

Now that you’ve done the hard bit in finding a prospective buyer, here are a few admin tasks you’ll need to complete once you’ve sold your car, including what happens to your car insurance.

During Sale — Keep Your Car Insurance

Having prepared your car for sale and drafted the online ad, you may be thinking that you can cancel your car insurance, seeing as you don’t plan to drive your car anywhere.

However, no insurance means no coverage should any damage be caused by a prospective buyer during a test drive.

Additionally, cancelling your insurance also means that you won’t be covered against the unexpected, and the last thing you want before a sale is your car to be stolen, damaged in a fire or impacted by hail.

So, until you’ve transferred your rego and the car is out of your possession, it’s best to keep a hold of your current insurance policy, at least for now.

After Sale — Transfer or Cancel Your Car Insurance

Now that you’ve sold your car, what you decide to do with your insurance will normally depend on whether you buy a replacement car.

If you’re selling and buying another car, at the same time, and your insurance is with Budget Direct, then you can quickly update and transfer your car insurance cover to the new replacement vehicle. Unless you request otherwise, these changes can take effect immediately. All changes to your insurance policy are subject to meeting underwriting criteria.

It's worth noting that when you transfer your existing policy to a new car, your premium may increase or decrease depending on many factors including the car and drivers.

If you originally paid a lump sum premium, we’ll either charge you the extra or we’ll pro rata refund the difference between the new premium and the old one. Should you pay your insurance by instalments, your instalments will simply be adjusted to reflect the new premium.

If you don’t intend to replace your car, then we can help you cancel your existing insurance policy and arrange for any applicable refund to be paid to you.

Don’t Forget Your Rego

Before you pass your car over to its new owner there are some other details you’ll need to update first. These include:

Transferring rego - Make sure to transfer your vehicle’s registration into the new owner’s name. If it’s a private sale the buyer has to transfer ownership and if it’s a public sale the dealer is the one who has to transfer the ownership. Each state varies in their requirements so please ensure you check what you have to do with your state or territory road traffic authority.
Updating personalised plates - If you’ve decided to keep your personalised plates then you’ll need to let your local registration office know that they are no longer attached to your old car.
Updating your toll account - If you have a toll account remember to update your details with your local toll road operator to avoid any additional fines or fees for your new car. Also remember to remove any toll tags that are in the car.

Budget Direct can help you manage your car insurance policy before you decide to sell, during the sale and after the sale is complete.

We can help you quickly and easily transfer your insurance over to a new car and provide award-winning Car Insurance cover with Budget Direct.

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FAQs

Once you’ve found a buyer, they’ll more than likely want to test drive your car. This is to ensure that it’s in good working condition and there are no obvious faults while driving.

If you have Comprehensive Car Insurance with Budget Direct, you are automatically covered during the prospective buyer’s test-drive, as long as the person driving is licensed, a non-household member, is not excluded from driving (e.g due to age restrictions) and you are present during the test drive.

It should be noted that Budget Direct policies don’t provide cover for loss, damage or liability if you are not with the car when it is being shown or test driven for sale and it is stolen.

No, the new owner will need to take out their own insurance. Each individual car insurance policy is unique to its owner and therefore won’t be transferable, even in the event of a car sale.

On the other hand, Compulsory Third Party (CTP) Insurance which is usually issued with your rego and can be transferred to the new owner automatically once the car is sold. This generally covers anyone who drives your vehicle (including yourself) for injuries caused to others in an at-fault motor accident, and does not provide any cover to the vehicle.

It depends on whether or not you buy a replacement car.

If you’re selling your car and buying another one, you can quickly and easily transfer your Budget Direct car insurance to your new car.

If you do not intend to replace the car, you can cancel your insurance policy by calling us on 1300 306 560.

To cancel your car insurance policy, please call us for help on 1300 306 560.

It depends on the circumstances.

You will not have to pay a cancellation fee if you:

cancel your policy within 21 days of the policy being issued or renewed – the cooling off period – and have not made any claims, or
decline our annual offer to renew your policy.

Otherwise, you’ll have to pay an ‘early cancellation’ fee of $40.

This information is general in nature only. While Auto & General Services Pty Ltd, ABN 61 003 617 909, AFSL 241411 (AGS) trading as Budget Direct has endeavoured to ensure the information we’ve relied on is accurate and current (at the date of publication), AGS does not guarantee it. Information has been prepared in reliance of the information outlined in the references. AGS accepts no liability for this information.