Car insurance could be costing you more if you are paying for your car insurance in monthly instalments. Recent news articles have shown that you could be paying on average £250 more a year.
More than 50% of motorists are paying more because they are signing up to monthly instalments instead of paying for their car insurance all at once. Some people are even shelling out 20% more for their payments that are spread out over 12 months.
When comparing premiums from leading insurers, Auto Express found that on average drivers who pay for their policy on a monthly basis are charged 10% more for the same cover due to high interest rates.
Even if buyers are choosing the cheapest option for car insurance, they can still spend £50 a year more compared to people who pay it all off in one go.
These findings have came out after the Association of British Insurers (ABI) said motor premiums have reached record high levels and an average comprehensive policy is costing £462.
An ABI spokesperson said: “Customers paying for their car insurance in monthly instalments are effectively taking out a loan for the cost of the cover and paying it back over 12 months, which means they incur interest and generally pay a higher total bill.”
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