Car insurance by instalments.

cashflow

Martin has written in his book that we should check if there are additional costs to obtaining car insurance by instalments, and that the overall cost can be as much as 20% higher.

I'm afraid I can beat that number - I just had a quote from Kwik-Fit, and they state that it is 35.4% if I want to renew by instaments!

kenshaz

Never Never Never Ever Pay You Car Insurance By Installments

jockettuk

kenshaz wrote:

Never Never Never Ever Pay You Car Insurance By Installments

oh if only .. i can afford the monthly payments but i couldnt afford the lump sum so i ring around and get the best deal .. yes some charge but some dont charge a lot.. difference is can you afford to pay a lump sum ... no in my case.

kenshaz

understand,but if you get your policy down low,at least it has paid for the cost of installments,guess I sounded smug sorry

MooseRich

I didn't realise how much it was costing me until the other month, Churchill are onto a winner for sure.

Maybe a list of the insurers who don't charge?

jockettuk

i found more than didnt charge that much and i always check on the net every year for the cheapest. i've even cancelled one insurance and got it on the net cheaper from the same insurer..

ArchieB_2

By saying that Kwik Fit charge 35.4% is not a 35.4% increase on the premium. The APR figure (which they must quote if it falls under the consumer credit act) is not very useful for comparing annual insurance paid by DD.

You need to look at the fee which would be nearer 13% (still high though). This would mean for a £1000 premium you are paying £130 on top to pay monthly. APR's can be affected by the number of instalments and the size of the deposit.

If you pay monthly you need to compare the total costs which are simply the deposit (if in the first year) plus the total paid in instalments. You only save by going to a 'free' DD insurer if the total you pay each year is less than the insurer adding 15% to the annual premium.

B

macca64

jockettuk wrote:

oh if only .. i can afford the monthly payments but i couldnt afford the lump sum so i ring around and get the best deal .. yes some charge but some dont charge a lot.. difference is can you afford to pay a lump sum ... no in my case.

Have to agree, my first years insurance (4 years ago now) cost £1,750, inlclude around £115 of interest. I know I could have paid by credit card and then done 0% etc to save money, but didn't have the time to apply for the cards etc. Anyway no way I could afford the cost upfront, so had no choice but to pay monthly. Luckily my insurance is now only £485 :j which was a saving of £250 over my renewal from my previous insurer :beer:

cashflow

ArchieB wrote:

By saying that Kwik Fit charge 35.4% is not a 35.4% increase on the premium. The APR figure (which they must quote if it falls under the consumer credit act) is not very useful for comparing annual insurance paid by DD.

You need to look at the fee which would be nearer 13% (still high though). This would mean for a £1000 premium you are paying £130 on top to pay monthly. APR's can be affected by the number of instalments and the size of the deposit.

If you pay monthly you need to compare the total costs which are simply the deposit (if in the first year) plus the total paid in instalments. You only save by going to a 'free' DD insurer if the total you pay each year is less than the insurer adding 15% to the annual premium.

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Hello ArchieB.,

Thanks for the information about actual charge compared to a quoted APR. I've had another look at the Renewal Notice I received, and I didn't read it carefully enough! It states that the final amount ' includes interest charges of ..., 35.4% APR.' In fact, the actual extra charge would have been 14.4%.

netty061

My car insurance just came up for renewal and as usual, I looked around to see if I could get a better deal. Because of an accident my husband had in 2003 (in another car that was covered by a no claims discount insurance by a different company), last year More Than wouldn't let me have NCD insurance unless I didn't have my husband on the policy. I decided to risk it as it was a good deal but then it came to renewal!!! I went to Sheila's Wheels and got a quote including NCD insurance (with husband and accident declared) and Green Flag recovery (More Than use their own), including the charge for paying monthly, it was only £4 more for the year. I phoned More Than to cancel and they offered me a £20 discount...still not including NCD insurance. Apart from anything else, it proves it is always worth telling them you've got a better quote from somewhere else.