With fuel costs and car insurance rates continuing to increase, drivers have turned to paying their insurance premiums in monthly instalments in order to spread the cost of their motor car insurance cover over the course of a year instead of paying a massive lump sum, experts say.
However, consumers have been warned that a great many car insurance companies will charge extra for this privilege, which could lead them to actually paying more than they would have otherwise. A study conducted by an online provider of discount car insurance quotes discovered that motorists can see fees equal to nearly 11 per cent of their initial premium for paying monthly, though some insurers will charge much less than this.
If you don’t want to pay such additional fees, there are alternatives. Many motorists have used a credit card with a 0 per cent interest rate for purchases, though financial experts warn that you’ll need to repay the debt in full before that 0 per cent promotional period ends.
Many credit cards available currently provide 0 per cent purchase bonuses for a period of up to 15 months, such as the Halifax All in One and the Tesco Clubcard credit cards.
One car insurance expert from the insurance website, Pete Harrison, remarked that consumers need to find alternative ways of paying for insurance, as the costs of keeping a car on the road have been on the rise. Mr Harrison advised against paying high premiums upfront if this would strain a motorist’s financing and instead counselled drivers to look for a way to make smaller and more manageable monthly instalments, even if this might cost a few more pounds in the long run.