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What to do with your traffic insurance when selling your car

Every vehicle on the road needs traffic insurance. In Estonia, this even includes trams and trolleybuses. Traffic insurance, which is also known as motor third-party liability insurance (MTPL), protects other traffic participants from any damages you cause. It’s a compulsory type of insurance that must be renewed every year and driving without it can incur a fine.

If you have a vehicle, you probably have MTPL insurance. But what to do if you’re planning to sell that vehicle? Do you have to terminate your traffic insurance contract or can it be transferred to the new owner? 

For Estonian drivers, both of these options are available and you should pick the one that best suits you and your car’s next owner. 

 

Option 1: terminate the MTPL insurance contract

According to Estonian Law, when vehicle ownership is transferred to another person (they are registered as the owner in the Motor Registry), rights and responsibilities related to its insurance are transferred to the new owner. That means, once the vehicle is transferred, you can no longer personally end your traffic insurance contract. 

For this reason, if you want to receive a refund on your leftover insurance days, you must terminate the contract BEFORE you sell the car. To do so, you need to submit a form to your insurance provider. The termination process can take a couple of business days so make sure to do it early and don’t leave it for the last moment. 

To cancel an insurance policy bought with Cachet, simply follow this easy cancellation guide

But even if you miss the deadline, don’t worry, because there’s always option 2.

 

Option 2: let the insurance transfer to the new owner

If you don’t want to go through the trouble of terminating your policy or if you want to sell your car as fast as possible and don’t have time to go through the termination process, then you can simply… do nothing. As mentioned earlier, the insurance will automatically transfer to the new owner when the car is re-registered in their name.

The new owner will then need to create a new MTPL insurance contract in their name and they will be able to request a reimbursement for the days that were left on your original MTPL policy by submitting an application to your insurance company. This, in turn, will terminate your policy automatically.

With this option, the new owner (not you!) will get the money back for the unspent insurance days from your policy. 

In such cases, it’s common practice to agree on a higher price for the car that includes the value of the unused insurance days. This way, you get your money back and you don’t have to deal with paperwork.

 

Cheaper traffic insurance with Cachet

When it comes to MTPL insurance, you can either buy an annual coverage or pay for it in monthly installments. It can be up to 30% cheaper to buy a yearly policy, but not everyone can afford to pay ~€450 in one go. 

That’s why, at Cachet, we have made it possible for our users to buy an annual coverage while paying for it in monthly installments. This means anyone can take advantage of up to 30% in savings without having to pay the entire premium at once. 

There are other benefits as well – all documents are accessible digitally in one place, you can file paper-free claims straight with the app, you’ll receive a green card and you’ll be able to drive anywhere in Europe! 

Calculate your MTPL policy price now and see how much you would save. 

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