Why Is Rac Charging Me A Cancellation Fee?

[Treacle71]

I scrapped my old car yesterday and when I tried to cancel my monthly payments for breakdown cover with the RAC, they said I'd have to pay a £99 cancellation fee!  They said because I've had two call outs hence the reason.  My cover with them started in June this year.  Are they right?  I said I would seek advice first because 'it doesn't sound right'.  I haven't cancelled my monthly DD as yet.

[barry1010]

You took out a year's contract, paying in monthly installments. You have cancelled it early so a cancellation fee is normal. It will be in the terms and conditions of the contract.

Could you transfer the cover to your new car?

[scorpiojo]

//If you cancel more than 14 days after receiving your policy documentation, we will charge you a fee of £45, plus time on cover. This is providing no claims have been made. If a claim has been made, or there has been an incident which may lead to a claim, no refund will be given and all premiums will be due.//

[Treacle71]

barry1010 thanks.  I already have free AA breakdown cover as it came free with my newer car.

[barry1010]

Cancel the free AA cover and transfer the RAC

[Treacle71]

I'm wondering if citizens advice would help.

[barry1010]

They will tell you to pay, the contract is clear and this is normal policy.

Have you had to pay to cancel the insurance?

[barney4444]

Well they being perfectly reasonable I think, your 2 breakdown call outs cost them more than £99.  

[ToraToraTora]

RAC is an annual fee. They let you pay monthly as a concession. If you cancel you still owe the balance. You have no leg to stand on.

[nicebloke1]

I think we now have the right answer from the first post. :0)

[davebro3]

I've always viewed AA/RAC as pretty much of a rip off. I have a basic recovery deal arranged through comparebreakdowncover which costs about £25 pa.

[DDIL]

Personally I would transfer it to the new car even if you have AA on it.

Expensive mistake you have made keeping your old car on!

[barney4444]

Break down and call 'em both out.  

[Prudie]

Why do you even ask a question on this, you get more than two clear and correct explanations from intelligent people on why this fee is due and yet you still think you should go and get another opinion from Citizens Advice?

Have you any idea how much you've saved by getting the RAC to come to your two call outs rather than having no cover and calling a garage? I actually think you have a cheek moaning about it.

[barry1010]

Some people think that when they pay by monthly direct debit they have a rolling monthly contract they can cancel at any time without penalty.

 

[Treacle71]

I got 6 months insurance money back.

[Treacle71]

Thanks everyone xx

[ToraToraTora]

12:17 that is because legally they have to cancel the policy if you no longer have the car.

[nicebloke1]

11.35 yep, when you pay monthly you are borrowing the money, so you are signing up to a finance agreement in effect.

[Treacle71]

Thank you nice bloke. I didn't look at like that 🤷

[nicebloke1]

^^ Same if you pay your car insurance monthly, thats why you pay a little more. Its a Loan agreement, cancel it and you are in breach of the finance contract.