Insurance Premium Installments Hidden Cost

euan26

Hi, just thought I should post this as a warning to others, I have just insured My Alfa Romeo Brera through AXA and the premium was high enough to warrant using their installment scheme.......that was until I noticed the 59.7% INTEREST RATE. This is more than most low score Credit cards and could well catch out those in need of the facility. fortunately I had alternative funding but just be careful.

photome

On tge AXA website the APR is half that of which you have quoted

AdrianC

"Always check the APR on any form of credit".

Hold the front page.

Car_54

euan26 wrote: »

Hi, just thought I should post this as a warning to others, I have just insured My Alfa Romeo Brera through AXA and the premium was high enough to warrant using their installment scheme.......that was until I noticed the 59.7% INTEREST RATE. This is more than most low score Credit cards and could well catch out those in need of the facility. fortunately I had alternative funding but just be careful.

How did you notice it if it was hidden?

facade

Forget APRs etc.


Simply multiply the monthly payment by the number of months, add in any initial payment and compare the total to the "in one go" premium.


Insurance in instalments catches some people out, as they imagine that they are paying for "each month" when actually they paid for the whole year up front, by taking out a loan, that they are paying off monthly. (So if they stop paying, or write the car off and make a claim, they still have to make the rest of the payments, and the bailiffs eventually come round if they don't......)

Mercdriver

facade wrote: »

Forget APRs etc.


Simply multiply the monthly payment by the number of months, add in any initial payment and compare the total to the "in one go" premium.


Insurance in instalments catches some people out, as they imagine that they are paying for "each month" when actually they paid for the whole year up front, by taking out a loan, that they are paying off monthly. (So if they stop paying, or write the car off and make a claim, they still have to make the rest of the payments, and the bailiffs eventually come round if they don't......)

Interesting though that insurance companies cancel the policy if a repayment fails. Surely if it is solely a loan, then they'd have to go via enforcing the agreement rather than cancelling the cover.

facade

I wondered about that too, you've paid for the full policy at inception, and it is the loan you are in default on, not the premium, and most insurers claim to not be moneylenders, merely credit brokers...