Insurance by monthly payments - how much do I pay in total?

chrish2

I don't understand APR. I am planning to take out an insurance policy with Hastings that is £805.25 annually. I want to pay monthly, which gives this:

Initial payment: £77.13
Monthly payments: 11 x £77.10
Total amount payable: £925.23
Total amount of credit: £805.25
Interest rate: 14.90%
APR: 29.9%

But then I read this - Total amount payable: This means the amount you have borrowed plus interest and other costs. Please note that this is an example figure and not the amount you will actually repay. The total amount payable would be £1378.80 (assuming an initial borrowing of £1,200). The actual amount you pay will depend on how much you borrow and how long you borrow it for. Each time you pay for another policy under this agreement we will write to you to let you know what your payments will be.

So I will actually pay more than £925.23 over the 12 months? Can someone tell me how much more?

neilmcl

chrish2 wrote: »

I don't understand APR. I am planning to take out an insurance policy with Hastings that is £805.25 annually. I want to pay monthly, which gives this:

Initial payment: £77.13
Monthly payments: 11 x £77.10
Total amount payable: £925.23
Total amount of credit: £805.25
Interest rate: 14.90%
APR: 29.9%

But then I read this - Total amount payable: This means the amount you have borrowed plus interest and other costs. Please note that this is an example figure and not the amount you will actually repay. The total amount payable would be £1378.80 (assuming an initial borrowing of £1,200). The actual amount you pay will depend on how much you borrow and how long you borrow it for. Each time you pay for another policy under this agreement we will write to you to let you know what your payments will be.

So I will actually pay more than £925.23 over the 12 months? Can someone tell me how much more?

No, it as is stated, £925.23 is the total you will pay.

Joe_Horner

As part of their responsible financial dealings they have to give examples to explain things like APR and these are based on nice round numbers like £1200 (as in the example they gave you above).

That has nothing to do with your actual situation, where they've listed exactly what you'll pay:

1 payment of £77.13 then a further 11 payments of £77.10.

That gives a total of 11 x £77.10 + £77.13 = £925.23

That's made up of £805.25 borrowed (for the premium) plus 14.9% of that amount (£119.98) in interest.

£805.25 + £119.98 = £925.23

chrisw

A ridiculous amount of interest.

Do you know anyone who could pay up front and then you pay them back in instalments? That's how I do it with my son's insurance.

seatbeltnoob

Can you get a 0% purchase credit card? get one if you can and pay insurance with it.

DUTR

chrisw wrote: »

A ridiculous amount of interest.

Do you know anyone who could pay up front and then you pay them back in instalments? That's how I do it with my son's insurance.

I do and lots of people I know, in the past I have paid it in full with a CC and then repaid that in instalments (over 3 or 4 months).

chrish2

chrisw wrote: »

A ridiculous amount of interest.

Do you know anyone who could pay up front and then you pay them back in instalments? That's how I do it with my son's insurance.

Ended up paying the full £805 in the end. Figured I may aswell take the hit to save that £120, plus it's nice to only have to consider petrol and maintenance costs for the next 12 months.