Paying monthly for car
insurance is now the aim of millions of UK
motorists, with more than 50% of them, particularly
young drivers, trying to pay the very minimum
possible deposit with the longest period to pay the
balance.
Who needs no deposit car
insurance?
Most drivers who prefer to
insure their cars by buying policies with the
smallest possible deposits upfront are,
unsurprisingly, those whose premiums are the
highest. This includes the under 25s, those with
convictions or fault accidents, and those with a
low, or no, no claims discount.
Does it cost more to pay for
insurance monthly?
Yes it does. Whilst no –
interest deals do exist from time to time, nearly
all insurers make interest or management charges on
top of the basic premium for those who don't pay the
full cost of their insurance cover upfront.
Does a low credit rating
affect the premium I will have to pay?
Many insurers do take into
consideration the credit rating of an applicant when
working out that motorist's risk factor – which is
what insurance premiums are based on. The poorer the
creditability of drivers, the more chance there is
of them driving unsafe cars or failing to maintain
them properly. Also, there is the danger that the
agreed repayments will not be met in full.
Are there 'no deposit'
insurance policies?
No– deposit insurance those
not normally exist, at least for those who are
moving to new insurers buying a policy for the first
time. UK contract law states that at least some
payment must be made before an insurance contract is
valid. However, this can often be as little as a
12th of the total premium.
Do young drivers pay more
for monthly repayments policies?
Most 17 to 25-year-olds have
little or no credit record. Some insurers see them
as being more risky since they prefer to see
evidence that their customers pay their bills
regularly and and time. So, yes, many under 25s are
hit with a double whammy of higher than average
premiums, plus punitive interest rates on top of
that.
Should I buy low deposit car
insurance?
If you can afford to pay the
premium in advance, or even borrow the money, you
will usually benefit financially by doing so. Many
of the cheapest insurers are not prepared to accept
repayments on a month-to-month basis; this means
that not only will those who prefer to buy their
policies in this way have possibly heavy interest
charges to pay, but there will also be unable to
access the very cheapest possible premiums. This can
add a huge additional financial burden to many of
these drivers.
Conclusion
Yes, it is possible to pay
for your next motor insurance premium with a very
low deposit and up to 12 months in which to repay
the balance, by regular instalments. It is, however,
usually a much more expensive way of buying your
policy and should be avoided if it is at all
possible.
