Car insurance for a vehicle you don’t drive

Car insurance is an essential expense when your vehicle is on the road, but what about when your vehicle is temporarily out of action? Maybe you have a sporty convertible you only take out in summer, or maybe your pride and joy is gathering mothballs while you’re posted overseas for work.

If you own a car you don’t drive very often, putting your car insurance on hold might be an easy way to save money. But do you still need some type of cover?

Why you might want to put your car insurance on hold

There are several reasons why you might want to temporarily suspend car insurance for a vehicle you’re not currently driving, including:

• Your vehicle is kept in storage for much of the year
• Your car is broken down and in need of repair
• You’ve been temporarily posted overseas for work
• You’re travelling overseas for an extended period, for example on a backpacking holiday
• You’re seriously ill or injured and unable to drive

Which temporary car insurance options are available?

Unsure what to do with your car insurance while your vehicle is out of action? Well, there are a few options to choose from.

• Cancel your policy. The simplest option is to cancel your policy completely and then purchase new coverage when your car is back on the road again. This means you won’t have to pay anything for insurance while your car is out of use, but remember that you also won’t have any cover in place against off-road risks like fire, theft and vandalism. Another important note is that, if you choose to cancel your car insurance policy completely, you must declare your vehicle as SORN (see below for more detail).
• Reduce your level of coverage. If you don’t want to cancel your policy, you may want to reduce your level of coverage – for example, switching from comprehensive car insurance to third party fire and theft cover. This may allow you to save money on your premiums while still maintaining a certain level of coverage for your vehicle. That said, comprehensive cover can sometimes work out cheaper, so make sure you check all cover options.
• Choose laid-up coverage. Some insurers offer the option of lay-up coverage, which is designed for vehicles that are off the road while they undergo repair or restoration. This allows you to insure your vehicle against a wide range of risks, but at the same time reduce your premium.
• Pay as you go or short-term cover. Pay as you drive policies allow you to save money by only insuring your car for a limited number of miles each year. The less you drive your car, the less you pay for insurance. A short term policy provides cover for a limited amount of time, but is only valid as an add-on to an existing annual policy, so only suitable for covering a vehicle you might borrow or only own for the length of the cover.
• Suspend coverage. In some cases, the insurer may be willing to let you suspend coverage for a temporary period. However, this option is not commonly offered.
• Remove yourself from cover. Consider removing yourself from your car insurance policy for a temporary period. If you’re no longer a listed driver, you can lower your premiums but still retain coverage for other drivers. Note the policy must have at least one registered driver on it at all times.

Let’s break down the pros and cons of each of these options to see which one is right for you.

Cancelling your car insurance policy

The first option is to cancel your car insurance coverage altogether and then, when you’re ready to hit the road again, take out a new policy. This is the simplest way to save money on your premiums, as you won’t have to worry about paying for insurance the entire time your car is off the road. To do this, you’ll have to declare to the Driver and Vehicle Licensing Agency (DVLA) that the car is off the road and obtain a Statutory Off Road Notification (SORN).

Statutory Off Road Notification (SORN) for your car

Obtaining a SORN for your car tells the DVLA that the vehicle won’t be on the road and therefore you shouldn’t have to pay car tax or car insurance. When you have the SORN for your car, any months of unused road tax should be refunded in the post within six weeks.

As long as you are the registered owner of the car, you’ll be able to request a SORN from the DVLA for your car online, by phone or by post. Once the DVLA receives your request, your SORN should be processed within four weeks. Check out how to obtain a SORN for your car in our helpful guide.

Can you cancel car insurance at any time?

You’re free to cancel your car insurance with any insurer at any time. But you may be charged a cancellation fee. Many insurers will also refund the unused portion of your premium, but it’s worth checking the fine print to make sure of this before you cancel. If you’re paying your premiums by the month, there will be no need for a refund.

The biggest drawback to cancelling car insurance is that you won’t have any coverage in place for your car. While you might think this isn’t a big deal – after all, your car is not being driven, so it’s hardly going to be involved in an accident – it means you won’t be covered against a range of non-driving risks. Fire, storm, hail, falling trees, theft, vandalism and flood can all cause costly damage to your vehicle while it’s off the road. Without car insurance in place, you’ll have to pay to repair the damage out of your own pocket.

There’s also the fact that if there’s finance owing on your vehicle, most car loan lenders require you to maintain comprehensive car insurance for the life of the loan. So if you haven’t paid out a loan secured by your vehicle, this option won’t be a viable choice.

Reducing your level of car insurance cover

If you’re not comfortable cancelling your policy and you want to maintain a certain amount of protection, you may want to consider switching to a lower level of coverage. So if you currently hold comprehensive car insurance, you could significantly reduce your premium by scaling back your policy to third party fire and theft cover. While the liability section of the policy wouldn’t be used because your car is off the road, you’d still be covered for loss or damage due to fire and theft.

However, there are downsides to this approach. First, the reduced level of coverage may not be sufficient for your needs, as there are still non-driving risks, such as storm and flood, that could cause costly damage to your vehicle. Second, if you’re still paying off a car loan, you’ll typically need to have comprehensive car insurance in place.

Choosing laid-up car insurance

Is your car off the road and not being driven while it’s being repaired or restored? If so, you may want to search for an insurer that offers laid-up car insurance. Designed for car enthusiasts, these policies provide protection against a range of risks while your vehicle is off the road, including:

However, while this solution is definitely worth considering for anyone restoring a car, it’s not suitable in all circumstances. If you’re going overseas for an extended period, for instance, then you’ll need to look at other options.

Choosing short-term or pay as you drive car insurance coverage

Temporary or pay as you drive policies are designed to help people who don’t drive their vehicle all that often save on the cost of car insurance. The premise behind these policies is simple: it doesn’t make sense that someone who drives 2,000 miles a year should pay the same for car insurance as someone who drives 20,000 miles a year, so they offer a way for you to only pay to cover the miles you actually drive.

If you know you won’t be driving your car for an extended period, such as three months out of the next 12, you can choose to insure it for a reduced number of miles. This can lead to a significantly reduced premium but still lets you enjoy the peace of mind of comprehensive insurance coverage.

Short-term car insurance covers you for a period of time from 1 hour to 30 days (some providers might allow for longer periods). However, as it is illegal to own an uninsured vehicle without declaring it as off the road, you won’t be able to use this as a replacement to getting an annual policy for your car.

If you only need a car for parts of the year, you might consider borrowing one from a friend or relative if possible. You will then be able to take out a comprehensive short-term policy to cover yourself while driving the borrowed car. This policy sits alongside the owner’s annual cover, but won’t affect their no-claims discount should you have to claim.

Another option to consider is renting a car for the limited time you require one. Companies such as Zipcar and car2go have vehicles parked in streets around the UK that can be easily rented for minutes to weeks. Some of these come with their own insurance already provided, but you might want to add extra cover to it if it doesn’t answer your needs.

Suspending car insurance coverage

Going overseas? You may want to check with your insurer to find out whether it’s possible to temporarily suspend your car insurance coverage. This would allow you to avoid the ongoing cost of premiums and to simply resume the same level of coverage when you are ready, but this also means your vehicle won’t be covered at all during this period.

However, most insurers don’t allow you to suspend car insurance coverage. Some may be willing to help you out in extreme circumstances, such as serious illness or injury, and it can’t hurt to give your insurer a call and ask whether this is possible. You’ll usually be required to just cancel your coverage or consider other options.

Removing yourself from the policy

The final option is to consider temporarily removing yourself as a listed driver from your policy. If you know that you won’t be driving the vehicle for an extended period but other people will, this allows you to reduce the cost of insurance but still maintain the same level of coverage.

Many insurers allow you to add or remove drivers from your policy online, but in some cases you might need to call your provider.

Of course, you’ll need to be sure you won’t need to drive the car when you’re not listed on this policy, as any incidents that occur with you behind the wheel could be very costly.

Can car insurance be transferred to another person?

No. Insurers consider a wide range of factors before deciding whether to insure you, including:

• Your age
• Your driving experience
• Your history of traffic offences and points on your driver’s licence
• Your claims history

Not only do these factors determine whether or not you will be covered, but they also affect your premium amount. As a result, you can’t transfer your car insurance to another person – they will have to apply for their own cover.

Bottom line

If you need to pause or suspend your car insurance without cancelling outright, you do have some options. Talk to your insurance provider to find out the best option for the level of coverage and period of suspension you need. If your current provider won’t help you out, compare other car insurance providers to find the right option for you.

Cancelling your car insurance altogether might also be an option, but you might have to pay a cancellation fee and you will need to declare your car as off the road with the DVLA while it isn’t covered.

If you only need a car for part of the year, you might consider borrowing or renting one and taking out temporary cover for you to drive it. Coverage by miles is also available for those who don’t drive their car often.

All in all, owning a car is an expensive business, but some options are available to make things a little easier when needed.

Frequently asked questions

• Is it ever legal for my vehicle to be uninsured?

  Yes. Although the law states that you must have at least third party motor insurance if you own a vehicle, there are exceptions. If you have a valid statutory off road notification, or a SORN, for example, then you don’t have to insure your vehicle. You also don’t have to if your car has been kept off a public road since before 1 February 1998, if its been scrapped, stolen or exported and you’ve given notice of this, or if your vehicle is between dealers or is being held in stock by an authorised dealer. If you don’t insure your vehicle in normal circumstances though, you’ll receive a fixed penalty notice. If you fail to insure it at this point, it may be seized, clamped or destroyed, and you could end up in court.

• What is a SORN?

  A SORN is a statutory off road notification, and is used to declare vehicles as off road. If your car has a SORN, you won’t be able to drive it but you also won’t have to insure it or tax it, so it’s a good option if you have a car that you don’t drive.

• How do I get a SORN?

  You can make a SORN declaration online via GOV.UK, by phone or by completing the SORN application form and posting it to the DVLA. You’ll receive confirmation within four weeks of the DVLA receiving your application. Any remaining months left on your car tax will be refunded. Get the lowdown by reading our guide on how to get a SORN for your car.

Who is most likely to be researching car insurance for unused vehicles?

Finder data suggests that women aged 25-34 are most likely to be researching this topic.

Written by

Ronny Lavie

Editor

Ronny Lavie was a deputy editor at Finder, specialising in insurance content. She has almost a decade of experience writing about financial topics, including five months spent as the interim managing editor for the Fintech Times newspaper. Ronny has a Master of Arts in Creative Writing from London Middlesex University. See full bio