The coronavirus pandemic has affected our lives in many ways, one of which being that we are using our cars a lot less than we used to.
Whether it’s because we’ve been furloughed from work, are working from home or are simply not going out as much because of the lockdown, a lot of us are driving a lot less – which has led many to question whether they still need to pay for car insurance, while others have asked if there are any ways of saving money on their policy during this period of underuse.
Below we provide advice and guidance on either cancelling a car insurance policy or paying less while you are not driving as much.
Cancelling your car insurance and declaring it “off the road” via a SORN
If you are not using your car at all during lockdown and would rather not pay for car insurance while it’s not in use, then you can declare it ‘off the road’.
Since 2011, it has been a legal requirement to have insurance if you own a vehicle, so the only way to keep your car while not paying for any car insurance is to declare that as 'off the road' via a SORN (Statutory Off Road Notification) which you can get by contacting the DVLA.
You will need to keep your vehicle on private land, such as your driveway or a garage in order to declare a SORN. Once the car is declared off-road, you can then cancel your car insurance – although you need to be aware that it will no longer be covered for any damage, fire or theft while it is off-road. You also won’t get the year’s no-claim bonus if you cancel your policy and some insurers will also charge an admin fee for cancellation.
Declaring a vehicle ‘SORN’ also means you don’t have to pay road tax, so you can also get a refund on the remainder of the year.
- You can find out more about SORN here: What does SORN mean?
How to save money if you are not driving as much
If you are not using your car as much because of the Coronavirus pandemic, then there are some ways you can save money.
Insurance is all about risk, with premiums generally based on the likelihood of you making a claim. Therefore, the less you drive, the lower the risk of you making a claim is, so you will pay less for your insurance as a result.
However, the price you pay for insurance is dependent on a lot of factors, so how much you can save depends on your own personal circumstances – and whether your insurance company charges any admin fees for cancellation.
If you want to try and save some money on car insurance during the COVID-19 lockdown, here are a few things you can try:
Reduce the estimated mileage
The more you drive, the more likely you are to have an accident and make a claim on your policy – whether it’s your fault or someone else’s. Therefore, reducing the estimated mileage figure on your policy (the amount you think you will drive during the policy term) can bring you savings (although it can sometimes have the opposite effect as not driving enough could see you classed as ‘inexperienced’).
Some estimates suggest that dropping your estimated mileage from 15,000 to 3,000 miles per year can result in a saving of £155 per year. So there can be some significant savings if you are dropping from a high mileage to a low mileage and you have a lot of time left on your policy. If you are only reducing your mileage by a small amount and only have a month or two left then the potential savings may not be worth it.
It is important that you try to work out your mileage accurately when purchasing cover. And if you are coming close to reaching your mileage limit, make sure you contact your insurance company straight away to let them know, as your cover may be voided if you are driving more miles than stated in your policy.
Changing vehicle usage
When you take out a car insurance policy the insurance company requires you to state what you will be using the car for. Most people state they will use the car for ‘social, domestic and commuting’ purposes as it is cheaper, but if you use the car for business purposes you must declare this and pay the increased premiums.
However, if you are currently paying for ‘business use’ but are no longer driving for work then you could change the vehicle usage on your policy to save money on your premiums.
How much you save will depend on how long you have left on your policy as well as other factors such as the type of vehicle you have, where it is parked overnight, etc.
- You might like: The Average Cost of Car Insurance UK | How is it Calculated?
Remove younger – and riskier – drivers from your policy
Younger drivers tend to pay more for car insurance as they are typically seen as at a higher risk of making a claim.
If you have younger drivers listed as named drivers on your policy – e.g. your children – who are not using the car as much anymore then you can have them removed from your cover for a significant saving.