Blog: Car Insurance – Don’t Pay Twice!

My car insurance renewal just landed on the doormat at home. Lousy timing. Christmas is just around the corner; children’s birthday’s looming; heating bills about to soar.

Of course what’s needed is a really good price on a really good motor insurance policy so naturally the first thing to do is to hop on to and run a quote. Only takes about 4 minutes and immediately I can see that I can save about 10% on my current policy price and keep the same level of cover from a good insurance provider. Sorted.

Avoid Monthly Installments for Car Insurance

But as I’m looking at the quote results I thought of some work we did here at last year when we analysed the added cost of paying for motor insurance in monthly instalments rather than in a single lump sum.

Wherever we have the details from insurers clearly shows the total cost of paying by monthly instalments. Looking at the five cheapest quotes it only took a minute to see that, on average, I would have to pay a total of 19% more for my insurance if I paid monthly rather than in a lump sum. And one of the quotes added a whopping 32% on to the premium for paying “on the drip”.

I’m relatively lucky in that my premium is lower than average – a combination of older driver, non-city dweller, old car and no claims – so I can afford to pay in one lump sum.

But there’s a lot of people, especially young drivers whose premiums are sky high, who can’t afford to do this.

The simple solution here for most people is to get a credit card with a “0% interest on purchases” promotional offer and simply pay for insurance using this. Of course you will still need to pay off the balance on the card but it does allow you to spread your payments and end up paying the lower “lump sum” rate. For a driver with a £1,500 premium, this could easily save over £300 and, based on the example from my own quote results, up to £480.

To make this even easier you can use to find a range of great 0% credit card offers.

So don’t be a monthly instalment sucker and pay twice for your car insurance!

23/11/2012 14:31:46 Eren

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