reclaiming car insurance

How to reclaim tax and insurance when you scrap your car

18th May, 2018

Reclaiming tax and insurance has always been a major consideration for anyone scrapping their car. After all, you pay tax and insurance essentially to keep your car on the road, so it would be – quite fairly – ludicrous to keep paying it after it’s been scrapped. You’ll be happy to hear, though, that in most circumstances most of the heavy lifting is done for you. We’ve gone into a little more detail below!

If your car has been scrapped by your insurance company

If you have an accident big enough to cause your car serious damage, chances are you’ll have to liaise with your insurance company. When you make a claim with them, they’ll tell you whether your car is a write-off or not, and how much they’re willing to award you.

If your car is deemed to be a write-off, it’ll be placed into one of four main salvage categories:

  • Category A: The car and all parts are beyond hope. The entire thing has to be crushed.
  • Category B: The car itself must be crushed, but you might be able to salvage some parts.
  • Category S* : The car has suffered serious structural damage, which has to be repaired before it can be put back on the road.
  • Category N* : The car has suffered non-structural damage, which has to be repaired before it can be put back on the road.

written off car

* Categories S and N were formerly Category C and Category D, respectively. Their initials were updated in October 2017.

Now, if your car falls into one of the latter two categories, you can potentially request your car back, but be aware that it’ll cost a lot to get it roadworthy again. In these instances, your insurer will award you the payout from you premium and sell the car back to you.

Reclaiming car insurance

On the other hand, if it’s too badly damaged or you choose not to keep it, they’ll often scrap it for you as part of their service. (If not, see below!) In these circumstances, the insurer will give you the option of transferring any funds you still hold with them towards insuring a replacement car. Alternatively, they’ll give you a refund for any unused months if you don’t plan to drive again for the time being.

Reclaiming road tax

To reclaim road tax, you’ll often find you’ll have to notify the DVLA yourself. Make sure you do, as you can be fined £1000 if you don’t! You’ll need the following information to hand:

If you scrap your car yourself

If you’ve been lucky enough to avoid an accident and your car is simply reaching the end of its natural lifespan, you’ll probably be looking for an independent scrap car breaker yourself. It’s equally important to make sure you’re transferring ownership correctly by getting the paperwork sorted, or the DVLA will be knocking at your door for costs!

letters

First order of business – you need to make sure you scrap it with an Authorised Treatment Facility. (That’s not a problem if you scrap your car with Scrap Car Network, as every single one of our network of dealers is a registered ATF.)

When you scrap your car – whether it’s with us or another scrap car breaker – make sure you pass on your logbook or your V5C. (Click here to find out what to do if you don’t have your V5C.) Make sure you keep the little yellow slip, known as the V5C/3, for your own records.

Reclaiming road tax

If you’ve sent your car to be scrapped and you’ve prepaid your tax, then obviously you’ll be entitled to a refund of any of the funds still held by the DVLA. The good news is that you don’t have to go to any great lengths to get this. When you scrap your car with a reputable dealer, you’ll get a Certificate of Destruction. It’s essentially a legal document to demonstrate that all legal procedures have been followed by both you and the dealer when scrapping your car. Once you have your CoD in hand, the DVLA are automatically notified, and you’ll get back any tax you’re entitled to.

If you’re paying your tax by direct debits with the DVLA, they’ll cancel them immediately and send you back the money. Quick tip; we wouldn’t advise stopping the payments yourself until you hear back from them. If they notice the payments have stopped before they officially recognise your car has been scrapped, they might start chasing it. It’s not a huge problem, but it’s just a lot of hassle you could save yourself by just leaving the payments alone for a little bit.

Now, if your car’s been scrapped but you haven’t got a CoD, you should be chasing it yourself at all costs. Since it’s legal proof your car has been destroyed, not having one means it’s possible that your car has been sold on rather than scrapped, and may well still be registered to you as far as the DVLA is concerned. That means you’re liable for payments, and any accidents or traffic stops it might get involved in. Don’t neglect your CoD!

Reclaiming car insurance

call to insurer

This one’s easy – it’s just a matter of giving your insurers a ring yourself, and letting them know your car has been scrapped. As above, they’ll likely present you with the option of reclaiming any funds you still hold with them, or simply putting it towards the insurance of your next car.

We hope this post has made it all a little more straightforward for you! After all, that’s a major part of our mission here at Scrap Car Network – to help you get cash for your car with none of the fuss and hassle. Just enter your car reg and postcode into our homepage to get started!