Junking your vehicle is a smart move if your car is not drivable or too expensive to repair. But once you sell it to a junk car buyer, what becomes of next—specifically, your car insurance? If you find yourself wondering if you should drop car insurance after the sale of a vehicle, you're not alone.
Here at Cashing Carz, we sell about hundreds of junk cars per month, and one of the most common questions we get asked is:
"Do I need to cancel my insurance now?" The answer is yes—but with some significant steps and considerations.
We'll guide you through what happens to your insurance when you junk a car, and how to cancel car insurance properly so you're not paying for a car that you don't have anymore.
Junking a Car? Here's What Happens to Your Insurance When you scrap your car with a trustworthy firm like Cashing Carz, the vehicle is officially removed from your ownership. That means you no longer need an insurance cover for it.
However, car insurance is not automatically terminated. You need to inform your insurance provider and go about the proper cancellation process.
How to Cancel Car Insurance After Selling Car
Here's how to drop car insurance after scrapping a car—particularly a junked car:
1. Get Proof of Sale or Transfer
After you junk your car with Cashing Carz, you'll get paperwork that confirms the sale or donation. This ownership transfer proof is important in informing your insurance provider and your state DMV.
2. Call Your Insurance Provider
Call your insurer and let them know you’ve junked your vehicle and no longer need coverage. Provide the sale date and, if requested, a copy of the junk title or bill of sale.
3. Request a Cancellation Confirmation
Don’t assume it’s done. Ask for written confirmation that your policy has been canceled. This ensures you’re not billed again or accidentally reported as uninsured.
4. Ask About a Refund
If you paid your 6- or 12-month premium in full at the beginning, you may be eligible for a prorated refund of the unused balance. When you cancel car insurance after selling car, don't forget to ask about this—after all, it's your money!
Don't Wait to CanceI Insurance
Failure to cancel car insurance in a timely manner can lead to:
- Waste of money
- Miscommunication with DMV records Gaps in your insurance record
- Possible renewal fees on a vehicle you don't even own
You could also be liable for anything that happens to the vehicle until it's officially off your policy. So don't wait—cancel car insurance after selling car immediately when the sale is finalized.
What If You Plan to Replace the Car?
If you are about to buy a new vehicle shortly after scrapping your current one, talk to your insurance agent about transferring the coverage. You may be able to roll over your existing policy onto the new vehicle without cancellation—saving you time and even receiving a discount.
We Make It Easy At Cashing Carz
At Cashing Carz, not only do we offer the best prices on your junk car—our staff also clarifies what happens next. Once you sell your car to us, we provide you with all the necessary paperwork to move forward legally and financially—complete with proof that makes cancelling car insurance a breeze.
We believe selling your junk car should be quick, fair, and simple—that includes the insurance.
Final Thoughts
Junking a car isn't just saying goodbye to a hunk of metal—it's saying goodbye to financial mess too. Once you junk your vehicle, be sure to cancel car insurance promptly to avoid unnecessary expense and bureaucracy.
Whether you're cleaning up your driveway or preparing to buy a new set of wheels, Cashing Carz can help facilitate the process from start to finish.
