What happens if I can't pay my car insurance this month

Missing a car insurance payment isn't ideal, but it happens. Here's what might happen next and what you can do about it.

Why hasn’t my car insurance come out of my bank account?

There are a few possible reasons why your car insurance direct debit failed:

• Not enough funds: If your bank account didn’t have enough money, the payment may have been rejected.
• Bank error: occasionally issues with your bank could delay payments
• Expired card details: If your card details have changed recently and you didn’t update your insurer, payments could fail.

Not every card type is accepted for recurring insurance payments, but this varies by insurer.

If you’re unsure, contact your insurer or check your bank account for any issues. This way, you’ll know if it's something you need to fix or if it's on their end.

What happens if you miss a car insurance payment?

Having a cancelled car insurance policy on your record could make getting insurance in the future more expensive.

If you miss a payment, here’s what usually happens:

• You’ll get a reminder: Most insurers give you a grace period, usually between 7 and 14 days, to make the payment.
• You might be charged a late fee: Some insurers will add a penalty for missing the payment date.
• Your policy could be cancelled: If you don’t make the payment within the grace period, your insurance might be cancelled. Driving without insurance is illegal, so if your policy is cancelled you won't be able to drive.

Will a missed payment impact my credit score?

Not all insurers report missed payments, some do, and this can have an impact on your credit score. Missed or late payments can stay on your credit report for up to 6 years, so it’s important to stay on top of them.

Bank charge for failed payments

It's also worth being aware that if your direct debit fails due to not having enought money in your account, some banks might charge you a fee.

Can I change my car insurance payment date?

Yes! Most insurers will let you request a different collection date for monthly car insurance payments if you ask. But it's best to do this before you're at risk of missing a payment, not just after.

Notice periods vary by provider, so always take a look at your policy documents if you're unsure. Alternatively, you can ask your insurer directly if you need more guidance.

Don't worry if a date change doesn't apply to the very next payment. One instalment may be closer to the previous one than usual to keep payments within the policy term. This is totally normal, and isn't a cause for concern!

If your policy is due to renew, check whether you've agreed to automatic renewal. Some insurers will automatically renew your policy and collect the payment unless you've opted out.

How to clear an overdue balance online

Most insurers let their customers log in to an online account to see how to pay their car insurance, clear an overdue amount, or review options such as spreading the remaining cost.

It's worth staying organised, so it's a good idea to register for online account access before it's needed, not just when a payment is missed.

Lost, stolen or replaced card?

If a card is lost, stolen, or has been replaced, don't panic! You can order the new card from the bank and update the insurer with the new details before the next payment date.

Most insurers will allow this through their online account. But always check the new details are shown correctly before the payment is due.

What should I do if I can’t afford my car insurance payments?

Here are a few steps you can take if you’re struggling to make payments:

• Speak to your insurer – They might offer a grace period or a payment plan to help you catch up.
• Switch to a cheaper policy – If your current policy is too costly, you could consider switching to a more affordable option. Your insurer might charge you a cancellation fee though.
• Consider temporary insurance – If you don’t drive often, temporary car insurance might be a more affordable option.
• Look into pay-as-you-go insurance – This could be a cost-effective alternative if you don’t use your car much.

Will this affect my car insurance in the future?

Unfortunately, it could. When you apply for insurance, providers often ask about your history with past policies. If your insurance was cancelled because of missed payments, it might result in higher premiums or even some insurers refusing to cover you.

That’s why keeping up with payments (or working with your insurer to avoid cancellations) is so important. If affordability is an issue, our guide on how car insurance costs are calculated might help you find ways to save.

Tips for avoiding missed car insurance payments

• Set up reminders – Use your phone or banking app to alert you a few days before the payment is due.
• Keep your details up to date – Ensure your card and bank details are always current.
• Create a buffer – Try to keep a little extra money in your account to cover any unexpected costs.
• Align payments with payday – Scheduling your car insurance payment shortly after payday can help you ensure the funds are there when needed.

If you’ve missed a payment or are worried about keeping up with your car insurance costs, don’t panic. There are ways to sort it out and prevent it from happening again. If you need more information on this, there are several debt charities that are available to offer advice, including StepChange, National Debtline and Citizens Advice.

Remember, car insurance is a legal requirement, so it’s worth taking steps keep your policy in place.