I don't know about you but every year my current insurer sends me a quote that always seems to be higher than the year before. This starts me off on my annual search for a cheaper quote to try and lower my premiums.
Many of us will perform this ritual yearly and most of us will find a cheaper quote and pay for our premiums in full. But what if the quotes you are getting for your car insurance are too high to pay all in one lump sum? Many of us in these circumstances will opt for a monthly payment option where we can pay our premiums in monthly instalments rather than having to come up with all the money up front.
Whilst monthly payments make it more affordable it odes however make it more expensive. For the convenience of being able to pay for your car insurance one month at a time you will usually end up paying interest charges in addition to your premiums. Your insurer will not just divide your yearly premium into 12 equal amounts. This means you are already paying a lot more.
You may also be charged an administration fee as it will cost the company more to manage 12 payments than it would to manage 1. This will usually be a one off fee, they may ask you to pay this up front. You can also expect to have to pay a deposit which usually adds up to two months worth of premiums. Whilst it is still easier to find this money than it is for the whole year it can still work out pretty expensive.
So what are the alternatives? There are car insurance policies with no deposit that are run by insurers who specialise in providing monthly insurance with no deposit. You pay the same amount each month with no hidden extras and no deposit to pay up front. You also have the advantage with no deposit car insurance of only having to pay for the months that you want insurance for so there is no cancellation fee if you decide you only want insurance for one month.
