Impounded Vehicle Insurance – Your Expert Guide!
There are many different types of car insurance available to drivers in the UK – and one for impounded vehicles is called compound insurance or impound insurance.
Penalties for breaking the law or rules of the roads can lead to serious problems.
In this guide, we show you what you need to know about retrieving your vehicle and how compound/impound insurance works.
What is compound/Impound insurance?
Compound insurance, also called impound insurance, is a car insurance policy designed for situations where a car has been impounded.
Although there are many possible variations of this, compound car insurance usually provides coverage for up to 30 days.
This is because if your car has been seized, you must prove it’s insured for at least a month to recover it.
Drivers must remember that they can take out an annual car insurance policy if their vehicle is impounded, but they will need to check that the insurer will allow it to be released from the impound or cover a vehicle that has been impounded.
It is important to note that if your existing car insurance policy doesn’t cover impounded vehicles, then you may need to take out a specialist compound insurance policy.
In many cases, this specialised coverage starts immediately, enabling you to reclaim your vehicle.
Why do you need compound car insurance?
The main reason for taking out compound car insurance is to release an impounded car. This is because you must present proof of insurance that’s valid for a minimum of 30 days.
Why are cars impounded in the UK?
Vehicles can be impounded by the police, local authorities, or the DVLA for several reasons that drivers should be aware of.
Here are some of the main reasons why cars are impounded:
- Driving without insurance
- Driving without a license
- Driving dangerously
- Illegal parking
- Illegally blocking the roads
- Abandoned
- Not having a valid MOT
According to the latest DVLA data, in 2024, over 197,000 vehicles were impounded in the UK.
60% of seizures were due to uninsured driving.
Our Region (West Midlands) Seizures in 2024:
Total Seizures: 24,197 Vehicles
Returned to owners: 15,663 Vehicles
Destroyed or sold at auction: 8534 Vehicles
Key Information
- DVLA targets untaxed and uninsured vehicles aggressively, using ANPR and regional patrols.
- Impoundment costs can be substantial—typically £400+ for release, including fees and insurance requirements.
- Only about 60% of seized vehicles are returned to their owners; approximately 40% are auctioned or scrapped.
How to reclaim an impounded vehicle?
The first step after receiving the letter that the vehicle is impounded is to locate the vehicle.
If you didn’t receive a notice letter, call 101 to find out where your car has been taken. You will need to have all the relevant documents for owning a vehicle.
The notice letter will outline the steps and timeframe for retrieving your car, as well as the process you will need to carry out.
Each seizure may vary depending on the reason for action taken by the police.
The next step is to go to the designated car pound (or police station) with the seizure notice or penalty ticket, a valid UK driving licence, another form of ID, proof of ownership, V5C log book, a valid MOT certificate, and proof of insurance that covers impounded vehicles.
Finally, the offender will need to pay the release fee and any daily storage charges. Failure to collect your car within the notice period (normally 7-14 days), could result in your car being sold or scrapped.
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