With car insurance rates and other related motoring costs still rising, many drivers have begun to explore new ways to pay their premiums, such as through the use of a credit card.
Purchasing motor car insurance is one of the largest costs in keeping a car, due to its compulsory nature. However, many have turned to purchasing insurance on a monthly instalment plan in order to keep it more manageable.
This can sometimes be a costly mistake, according to one car insurance comparison site, however. Many car insurance companies will charge hefty fees to their policyholders for the service, with those opting to pay their premiums monthly sometimes paying more than 10 per cent extra in fees.
Not all insurers charge such exorbitant rates for the privilege of paying by the month, however. Research shows that there are some that charge fees of anywhere between 5 and 6 per cent, and other drivers have decided to go another route altogether – by using a 0 per cent purchase credit card to pay for their insurance premiums.
Experts say that consumers need to be just as careful if they opt for this route, however. The 0 per cent purchase promotion on your credit card will almost certainly expire, and leaving a balance on the card after that date could leave you paying off even more in fees than if you had purchased it outright.
There are other options when it comes to managing the cost of your insurance cover, experts say. In addition to deciding on the best payment option for your budget, you can also ensure that you only carry the amount of cover that suits your motoring habits, such as increasing the excess payment or reducing the annual mileage.