car insurance cancelation fees!

[lab1986]

im now jobless and pay �125 a month car insurance cause im young and drive a bmw,now i simply can not afford my insurance so i need 2 cancel it,however i just phoned ibuyeco and they want �500 to cancel,this is ridiculas surely thats got to be a record cancelation fee,ive been with them for about 15months now,i was intending to block their direct debit but realised it isnt a direct debit they just take it out each month when its due manualy so i cant even do that,can i just refuse them authorization over the phone to take money out of my acount? where do i stand can they just help them selfs to my bank acount if they beleive i owe them money???

[lab1986]

oh and also i signed the agreement on the internet so i have no physical signiture where do i stand, cheers

[Oneeyedvic]

They cannot take money out of your account with out a direct debit (unless you are paying them by standing order). Either of them can be cancelled, however in all probability they will pursue you for the fess that they are owed.

[bednobs]

what abut trading it in for an old banger (dosent have to run) and changing insurance to that instead?

[kempie]

To put the description of your insurance affairs another way:

You were quoted an insurance premium of around �1500 which you elected to pay in monthly installments. You have paid 3(?) months, therefore you have only given the insurer �375 of the �1500 you agreed to pay. By terminating the contract early they could demand the full remainder (�1125) be paid to them but instead the contract includes a short-term premium rate to be applied for early cancellation. Their calculation as to the shortfall of the premium is �500, a figure that will be similar to many other UK insurers in the same circumstances. If you refuse to pay the debt the insurer can seek enforcement through the courts.

Here is an explanation of policy cancellation as provided by Budget, a sister company of ibuyeco (i.e. both are brands within BGL Group)

http://www.budgetinsurance.com/Car-Insurance/C ancellation-of-Car-Insurance-Policies/

and this gives an indication of typical short-term premium rates

http://www.yesinsurance.co.uk/car-insurance/po licy-insurance-cancellation.html

[iwishman]

I had a similar problem, and after all the concerns you have got, I changed banks, might sound unreasonable but I felt instant relief.