Two different policies, two different answers, and one question most sellers only think about after they've handed someone the keys.
Your comprehensive insurance is yours — you cancel or transfer it. Your compulsory third party cover is attached to the vehicle's registration, so it generally follows the car. And whether you're covered while a stranger test-drives your car depends entirely on your policy.
Ask your insurer two questions before you list: what happens to my policy when I sell, and am I covered if an unlisted driver test-drives the car? Both answers are policy-specific, and neither is one a guide can give you.
Comprehensive insurance
This is the one you control.
Don't cancel it before the sale completes. Until the buyer has paid and driven away, it's still your car, still parked where you park it, and still exposed to everything it was exposed to yesterday. Sellers who cancel the moment they list are taking an uninsured risk for no benefit.
Cancel or transfer it once the sale is done and your notice of disposal is lodged. Do both the same day if you can, so nothing sits in an ambiguous state.
Ask about a pro-rata refund. If you've paid annually, there may be unused premium to come back. Insurers differ on whether they refund it, charge a cancellation fee, or both — worth asking rather than assuming.
If you're replacing the car, transferring the policy is often simpler and cheaper than cancelling and starting again, and may preserve a no-claims position. Ask before you cancel, because it's harder to undo afterwards.
CTP — the one that follows the car
Compulsory third party cover attaches to the vehicle's registration rather than to you personally, so it generally travels with the car when the registration transfers.
Beyond that, CTP is genuinely different in every state — how it's bought, who from, and what it's called. That's why "green slip" is a New South Wales term rather than a national one, and why an answer you read on a forum from someone in another state is unlikely to apply to you.
What to actually do: ask your CTP insurer, or your own state's transport department, what happens to your CTP on sale and whether any refund arises. The answer turns on your policy, your state, and whether registration is being transferred to the buyer or cancelled with the plates returned. Those two paths have different outcomes. It's a short phone call, and it's the only reliable way to get this right.
We're not giving you a rule here on purpose. The refund question in particular is one where a confident general answer would be wrong for some readers, and being wrong about someone's money isn't a trade we'll make.
The test-drive question
This is the gap. Most sellers don't consider it until a stranger is sitting in the driver's seat.
Are you covered if an unlisted driver crashes your car during a test drive?
It depends on your comprehensive policy. Some cover any licensed driver with your permission. Some exclude drivers under 25. Some apply a much higher excess to an unlisted driver. A few address test drives specifically, in either direction.
Find out before you list, not during a handover. If the answer is unfavourable, you have real options:
- Go with them and don't let them drive — you drive, they observe
- Restrict the drive to a short agreed route
- Accept the risk knowingly, having priced the excess
All three are reasonable. Discovering the answer after an incident is not.
While you're on the phone, ask what happens if the buyer is at fault versus if you are, and whether your excess changes. See our seller safety checklist for the rest of the test-drive process.
The gap between sale and transfer
There's a window — sometimes a few days — between the buyer driving away and the registration actually changing hands. Two things worth knowing about it:
Your notice of disposal is what protects you in that window, not your insurance. It's the record that you no longer own the vehicle. Lodge it the same day.
Don't agree to keep the car insured "just until the transfer goes through." Once it's sold, insuring it is neither your obligation nor sensibly your risk, and an arrangement where you're covering a car someone else is driving is one you don't want to be in when something happens.
If the car isn't sold yet but isn't being driven
If it's sitting unregistered or off the road while you sell it, ask your insurer about a reduced or laid-up cover option. It's cheaper than full comprehensive and better than nothing, particularly for a car that might take months to sell — see selling a car with expired registration.
What this means if you're selling on MotorLoop
Insurance is between you and your insurer — no marketplace changes that, and nobody selling you a listing should be telling you what your policy says. What we can do is the listing side: listing a car on MotorLoop is free.