If you’ve got an old car sitting in the driveway that’s more rust than ride, chances are you’ve thought about scrapping it. Maybe it’s been in an accident, or maybe it just gave up one day and never came back to life. Either way, selling it to a cash-for-cars company is a smart move—you get paid, and it’s out of your way. But there’s one question that often comes up: Do you still need car insurance when you’re selling a scrap car?
Let’s talk about it.
The Short Answer: No, You Don’t Need Insurance to Sell a Scrap Car
In most cases, you don’t need active insurance to sell your car to a scrap yard or a cash-for-cars company. Unlike selling a drivable car to a private buyer—where a test drive might be involved—scrap cars are usually towed away. That means there’s no need for roadworthy certificates, registration, or insurance to cover potential incidents during the sale process.
That said, while you don’t need insurance to sell the car, there are a few things you should know before you pick up the phone and call a car removal service.
But Wait—What If My Car Is Still Insured?
Let’s say your old Corolla is still technically insured, even though it hasn’t moved in six months. If you’re selling it for scrap, you should cancel your policy once the sale is complete. Why pay for coverage on a vehicle you no longer own?
A good friend of mine, Dave, learned this the hard way. He scrapped his old ute last year but forgot to cancel the insurance. Two months later, he realized he’d been paying premiums on a car that was already recycled into soda cans and paperclips. Not ideal.
Most insurers will let you cancel mid-policy and may even refund you for the unused portion. Just give them a ring and provide proof that the vehicle’s been sold or deregistered.
What About Liability While It’s Still in My Name?
This is where things get a bit more serious. Until you officially transfer ownership or cancel the registration with your local transport authority (like VicRoads here in Victoria), you could technically still be liable if something happens with the car.
Let’s say the buyer tows your car away and dumps it illegally. If it’s still in your name, guess who gets the fine? Yep—you.
To protect yourself:
- Make sure to get a receipt or proof of sale from the buyer.
- Notify your state’s transport department that the car has been sold for scrap.
- Remove your plates (if applicable) and return them if required.
These steps make sure there’s a clean break between you and the car.
Can I Drive My Car to the Scrap Yard?
You can—but you probably shouldn’t.
If the car is still registered and insured and you believe it’s safe enough for a short trip, technically you could drive it to the scrap yard. But let’s be honest: most scrap cars aren’t roadworthy. If you get pulled over, you could be fined for driving an unroadworthy or unsafe vehicle. Worse, if something goes wrong on the road, your insurance might not even cover you because of the car’s condition.
It’s almost always safer (and easier) to just let the cash-for-cars company tow it away. Most reputable services offer free towing, so there’s really no reason to take the risk.
Do Towing Companies Need Insurance?
A quick word on the other side of the deal: the towing or removal company should have their own insurance. When they hook your car up and take it away, they’re responsible for what happens during that transport. That’s one reason it’s so important to choose a trusted and licensed cash-for-cars business.
Here at our company, we’re fully insured for towing and handling vehicles of all shapes, sizes, and conditions. We’ve picked up everything from smashed-up hatchbacks to old trucks that have been sitting in a paddock for ten years. Our drivers know what they’re doing, and you’re covered every step of the way.
Conclusion
You don’t need insurance to sell a scrap car. But you do need to be a little smart about how you go about it. Cancel your existing policy, inform your state authority, and make sure you’re dealing with a legitimate buyer who will take care of things properly.
One Last Thing…
Selling your scrap car might feel like a small thing, but it’s actually part of a much bigger picture. You’re not just clearing space in your garage—you’re putting money back in your pocket, recycling materials, and saying goodbye to something that no longer serves you. And if you do it the right way, it’s a stress-free process from start to finish.
So if you’re ready to scrap that old ride, we’re here to help—no insurance required.
If you are in Murrumbeena, and looking for a cash for cars service, this is the best way to visit us.
Burwood Cash For Cars
www.burwoodcashforcars.com.au
(03) 7047 6732