You should cancel your insurance after junking your car, not before. Keep coverage active until the junk car buyer takes possession and the sale is complete.
Why you should wait to cancel:
Until the vehicle is picked up and ownership transfers, you are still legally responsible for it. If the car is stolen, damaged, or causes damage to property while sitting on your lot, your insurance covers the loss. Canceling coverage early leaves you liable for any incidents before pickup.
When to cancel your auto insurance:
- Complete the sale and sign over the title to the junk car buyer
- Confirm the vehicle has been towed or removed from your property
- Get a receipt or bill of sale documenting the transaction
- Call your insurance company to cancel coverage on that vehicle
Most insurers prorate your premium and refund the unused portion after cancellation. If you cancel mid-month, you receive credit for the remaining days.
If you are transferring plates to a new vehicle, you can often move your insurance policy to the new car on the same day you junk your car for cash. Contact your insurer to coordinate timing so you maintain continuous coverage without paying for two vehicles.