Car insurance

Star01

Hi Recently renewed my car insurance with Esure decided to take the monthly payment  option having checked my credit score this has been adversely affected by 30+ Points having looked into this apparently this is just for having it paid monthly this is now classed as a new finance account effectively a personal loan 
Spoken with Esure they are saying this due to the credit search well considering they did not do one as I have been a customer for 10 years they just set it up and can see it on my Experian account they didn’t  so that’s irrelevant
They mentioned missed payments maybe ? never missed one with them Irrelevant again 
The actual  situation is if you take the monthly payment option this will adversely affect your credit by 30+ points just for having it as this classed as loan agreement additional finance debt but they seem oblivious of this intentionally or not 
Nothing in their paperwork advises the customer of this my insurance is relatively low if I had known this I would of just paid it off 
They don’t seem to get it that Just taking this option will adversely affect your credit rating 
Has nothing to do with credit search or missed payments 
My question is are they required by law as a finance provider to advise people prior to take up 
Ps their main head line on your renewal is you don’t have to do anything 

DebtHurricane

The score is irrelevant. Only you see it. Lenders use your credit history to assess you. The credit reference agencies and third parties like Credit Karma, ClearScore etc will always show your ‘score has changed’ whenever something changes, good or bad. 

Any new accounts or new searches will either increase or decreased the ‘score’. It’s meaningless. Made up numbers 

bazzyb

Star01 said:

My question is are they required by law as a finance provider to advise people prior to take up 

If you mean are they required to advise you that it is a loan and give you details, then yes - and they do. They will have provided pre-contract information in the form of a SECCI, and you will have signed a Fixed Sum Loan agreement. 

MinuteNoodles

Star01 said:

Hi Recently renewed my car insurance with Esure decided to take the monthly payment  option having checked my credit score this has been adversely affected by 30+ Points having looked into this apparently this is just for having it paid monthly this is now classed as a new finance account effectively a personal loan 

It has always been a finance loan when you pay in monthly installments unless it's with the very few companies who don't such as Direct Line. You are taking out a finance agreement with a loan company to cover the cost.The APR is also horrific too much more than most credit cards at typically around 27-30% APR for choosing to take your car insurance monthly. My sis in law recently had to insure her car and was going to take monthly payments on a £450 annual policy which would take up the total repaid to £600. Told her in no uncertain terms she wasn't to do that and paid for it myself with her paying me back over the year plus a fiver for the interest it would have got.

If you're so worried about the impact to the credit score that no lender uses then maybe you should have paid it all at once. Not only would you have saved a load of money, £100 or more, you'd not have changed the mickey mouse number.

D3xt3r5L4b

You’re not “adversely affected” by anything 

MalMonroe

You just keep renewing annually with the same insurer? That way bigger bills lie.

And I'd beg, steal or borrow rather than pay monthly. It's, as you say, just a loan and that goes on your credit report and it seems never ending. I did it once but never again. You have to pay for the privilege, it affects your credit report and it just hangs over your head. That may just be me but I prefer to pay annually, do not give them any more than you have to for car insurance. I'm just about to find another car insurer after being with Hastings last year. My renewal quote is £50 more than last year. I'm going elsewhere, as I do every year. It really is worth doing a bit of research each renewal time, you can save yourself a bundle. Oh and don't pay monthly!

MalMonroe

D3xt3r5L4b said:

You’re not “adversely affected” by anything 

Beg to differ. It goes on your credit report as a loan and it DOES affect it adversely. I've been there.

bazzyb

MalMonroe said:

D3xt3r5L4b said:

You’re not “adversely affected” by anything 

Beg to differ. It goes on your credit report as a loan and it DOES affect it adversely. I've been there.

It will affect you if you pay it late or don’t pay it at all. Otherwise it is unlikely to affect you in any way. 

MalMonroe

MinuteNoodles said:

Star01 said:

Hi Recently renewed my car insurance with Esure decided to take the monthly payment  option having checked my credit score this has been adversely affected by 30+ Points having looked into this apparently this is just for having it paid monthly this is now classed as a new finance account effectively a personal loan 

It has always been a finance loan when you pay in monthly installments unless it's with the very few companies who don't such as Direct Line. You are taking out a finance agreement with a loan company to cover the cost.The APR is also horrific too much more than most credit cards at typically around 27-30% APR for choosing to take your car insurance monthly. My sis in law recently had to insure her car and was going to take monthly payments on a £450 annual policy which would take up the total repaid to £600. Told her in no uncertain terms she wasn't to do that and paid for it myself with her paying me back over the year plus a fiver for the interest it would have got. 

If you're so worried about the impact to the credit score that no lender uses then maybe you should have paid it all at once. Not only would you have saved a load of money, £100 or more, you'd not have changed the mickey mouse number.

How come your sis-in-law's car insurance was so high anyway?  I pay no more than £250 pa and now I'm a pensioner I have to pay more than younger folk. (Just in case, you know, I suddenly lose all my faculties/marbles.) 

MalMonroe

bazzyb said:

MalMonroe said:

D3xt3r5L4b said:

You’re not “adversely affected” by anything 

Beg to differ. It goes on your credit report as a loan and it DOES affect it adversely. I've been there.

It will affect you if you pay it late or don’t pay it at all. Otherwise it is unlikely to affect you in any way. 

Well it affected me in a way. 

Lenders judge you because you are so poor that you have to pay car insurance on a monthly basis and it DOES affect your credit report adversely. It certainly affected mine, nothing to do with the credit score which obviously went down too (although I know lenders can't see that).

I paid it on time by direct debit every month. No late payment and no missed payment.

Surely I cannot be the only one???

Shakin_Steve

MalMonroe said:

MinuteNoodles said:

Star01 said:

Hi Recently renewed my car insurance with Esure decided to take the monthly payment  option having checked my credit score this has been adversely affected by 30+ Points having looked into this apparently this is just for having it paid monthly this is now classed as a new finance account effectively a personal loan 

It has always been a finance loan when you pay in monthly installments unless it's with the very few companies who don't such as Direct Line. You are taking out a finance agreement with a loan company to cover the cost.The APR is also horrific too much more than most credit cards at typically around 27-30% APR for choosing to take your car insurance monthly. My sis in law recently had to insure her car and was going to take monthly payments on a £450 annual policy which would take up the total repaid to £600. Told her in no uncertain terms she wasn't to do that and paid for it myself with her paying me back over the year plus a fiver for the interest it would have got. 

If you're so worried about the impact to the credit score that no lender uses then maybe you should have paid it all at once. Not only would you have saved a load of money, £100 or more, you'd not have changed the mickey mouse number.

How come your sis-in-law's car insurance was so high anyway?  I pay no more than £250 pa and now I'm a pensioner I have to pay more than younger folk. (Just in case, you know, I suddenly lose all my faculties/marbles.) 

If you have no previous claims, your quote is based on the car you drive, your age and your postcode. I would suggest that OP's SIL's situation is very different from yours. Age, car and postcode.