Car insurance adjustments add to cost of using car scrappage scheme

Whilst the car scrappage scheme seems to be having some impact on new car production, many car insurance companies are cashing in and charging high mid-term adjustment fees, hitting those scrapping and swapping their car.

The SMMT (Society of Motor Trade Manufacturers and Traders) has today announced that car production is down again but the drop in May was the smallest of the year so far.

So whilst the outlook remains difficult there is some sign that the car scrappage scheme is lifting the volume of new car sales.

However, those participating in the car scrappage scheme are, according to uSwitch.com, largely incurring significant ‘admin’ fees for making changes to their car insurance policies as they move their insurance from the old to the new car.

The average fee for a mid-term adjustment is £19.40, although some providers charge significantly more than this.

If a car owner decides to cancel their insurance policy so that they can look for a more competitive deal, then there’s a much higher mid term cancellation fee, for example £75 for the AA policies and £50 for Sheila’s Wheels or Esure.

Mark Monteiro, insurance expert at uSwitch.com, said ‘Motorists must do their research when it comes to charges ‘hidden’ away in the terms and conditions of car insurance polices and could potentially save themselves a significant amount of money if they opt for one of a number of providers who do not charge for making mid-term adjustments to policies.’

Car insurance providers who currently do not charge for mid term adjustments include Marks and Spencer, HSBC Insurance, AIG, Endsleigh and NFU Mutual.

You may find it useful to use a car insurance comparison website, like that offered by uSwitch or Gocompare.com for example, to quickly see a range of insurance quotes.

You can then easily select the one that suits your needs, including understanding which don’t charge for mid term adjustments if this is important to you.