Car insurance interest charges

Wreckdiver_2

I have just renewed my car insurance which was a continuation from last years policy. I always pay monthly installments (in advance).

The insurance company has sent me my new certificate and it shows the annual premium plus an annual interest charge.

Can the interest be charged as I am paying in advance, month by month and therefore always in credit? Come to that, if I were to pay the whole year in advance I should be elligible for interest from them.

They could argue that they incur extra charges to collect the monthly payments, but that couldn't be charged as "interest" could it?

BenL

They work it so that you are in effect taking out a loan for the total premium and the premium is being paid up front for the policy by this loan.

You then have the whole amount plus interest to pay back over the term of the agreement.

Ben

iceicebaby

Your insurance co pays your premium in full on your behalf for you and you are paying them back, like a loan so thats why interest is charged.

lisyloo

Can the interest be charged as I am paying in advance, month by month and therefore always in credit?

The quoted premium is base on it all being paid up front, so no you are not in credit.

This is a loan for an annual premium.

There is one company I know of that do "pay as you go" cover that you might like to look at

https://www.ecarinsurance.co.uk

I have no connection with the above company (I use https://www.ebikeinsurance.co.uk), I'm just familiar with their slightly extraordinary product offering.

Stephen_Leak

Its a bit late now, but I respectfully suggest that, sometime between now and next year's renewal, the OP should read Martin's article on car insurance on the main website.