Insurance refund after selling your car: how much you get back
2 July 2026 · 5 min read · PaperValue.sg
Here's the thing nobody tells you at the point of sale: your motor insurance does not cancel itself when you sell your car. The dealer doesn't cancel it. LTA doesn't notify your insurer. The transfer going through on OneMotoring changes nothing on the insurance side.
If you don't pick up the phone, you keep paying premiums on a car someone else is driving. And the refund you're owed — often several hundred dollars — sits with the insurer until you ask for it.
This guide covers exactly how much you get back, insurer by insurer, and the two catches that surprise people: the short-period rate and the claim-year exclusion.
Step 1: Cancel the policy (today, not next week)
Call your insurer or log into their portal and tell them the car is sold. They'll ask for proof — a screenshot of the LTA transfer confirmation from OneMotoring works fine.
Refunds are calculated from the cancellation date, not the sale date. Every day you wait is premium you don't get back.
How much you actually get back
You don't get a simple prorated refund. Most insurers apply a short-period rate: you get back a percentage of the unused premium, not all of it. The percentage varies more between insurers than most people expect:
| Insurer | Refund on unused premium |
|---|---|
| FWD | ~95% |
| NTUC Income | 85–90% |
| Budget Direct | ~80% |
| AIG | ~80% |
| AXA | ~80% |
Rates as at early 2026 — confirm with your insurer, they do change.
Worked example: you paid $2,400 for a 12-month policy and cancel after 6 months. The unused premium is about $1,200. At an 80% short-period rate you get roughly $960 back; at 95% it's $1,140. That $180 spread is one reason the cancellation-refund policy is worth checking before you buy insurance, not just when you leave.
The refund typically arrives in 2 to 4 weeks.
The claim-year catch
If you've made a claim during the current policy year, most insurers refund nothing. The premium is considered fully earned. This applies even if the claim was small and even if you're cancelling with months left on the policy.
If you have a pending claim, settle it before cancelling — cancelling mid-claim complicates everything.
Your NCD: don't let it lapse
Your No-Claim Discount is yours, not the car's. At 50% NCD, it's worth half your premium on the next car — protecting it matters more than the refund.
- Buying another car soon? Ask about transferring the policy to the new car instead of cancelling. You skip the cancellation admin, keep the NCD live, and often save the short-period haircut entirely.
- Taking a break from driving? Your NCD is typically preserved for 12 to 24 months after cancellation, depending on the insurer. Ask for the exact window in writing. Let it lapse and you restart at 0% — on a $2,400 premium, that's a $1,200-a-year mistake.
- NCD cannot be transferred to another person (except in limited spouse arrangements some insurers offer — ask).
What you need before you call
- Policy number
- Date of handover / transfer
- Proof of transfer (OneMotoring confirmation screenshot)
- Your bank details for the refund
Five minutes on the phone. Several hundred dollars back. Do it the same day you hand over the keys.
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Frequently Asked Questions
How much insurance refund do I get when I sell my car?
You get back the unused portion of your premium multiplied by your insurer's short-period rate — typically 80% to 95%. On a $2,400 annual policy cancelled at the 6-month mark, expect roughly $960 to $1,140 depending on the insurer. No refund if you've claimed during the policy year.
How long does the insurance refund take?
Most insurers pay out within 2 to 4 weeks of cancellation. The clock starts when you cancel, not when you sell — so cancel immediately after handover.
Does my NCD carry over when I sell my car?
Yes. Your No-Claim Discount belongs to you, not the vehicle. It's preserved for 12 to 24 months after cancellation (insurer-dependent) and applies to your next policy. If you're buying another car, transferring the policy instead of cancelling keeps it live automatically.
What proof does the insurer need to cancel?
A screenshot of the LTA ownership transfer confirmation from OneMotoring is the standard evidence. For deregistration (scrap/export), the deregistration confirmation works the same way.
Do I get a refund if I made a claim this policy year?
Almost always no. Once you claim, the year's premium is treated as fully earned by most Singapore insurers, regardless of when you cancel. Factor this in if you're weighing a small claim close to a planned sale.
Related Guides
- What happens after you sell your car: the full post-sale checklist
- Road tax when you sell your car: transfers vs refunds
- How to sell your car in Singapore: the complete guide
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