No Deposit Car Insurance
Many car insurance providers will allow you to avoid the pain of forking out a lump sum to pay for you cover by instead offering the option of a monthly payment plan.
However, as well as charging interest, most providers will make you pay a deposit of around 20% of the entire policy value up front.
But there are insurance companies out there who will offer a monthly payment plan without requiring you to pay a deposit up front.
Spread the Cost of Your Insurance by Paying Monthly
Car insurance can be costly, with some policies coming with premiums in excess of £1,000. Having to come up with this money up front can be difficult, even devastating to some, and so paying monthly can often be a much easier option.
If your policy costs £500 for example, you could avoid having to come up with this money all in one go, instead paying monthly instalments of around £41.60 in theory.
However, most providers will add additional costs to the monthly instalment plan, meaning that you pay for the convenience. This generally takes the form of added interest, meaning that by opting to pay monthly you will, almost always, end up paying more than if you paid it all in one go.
If you can afford to pay off your premiums up front in one lump sum, then you’ll be getting a better deal.
There are other ways to reduce your premiums, helping to reduce the amount you’d pay up front if you were to pay annually.
Opting for a larger voluntary excess is one of those ways. The excess is the amount you pay in the event of a claim, and the insurance provider will pay for the shortfall between the excess and the value of the claim.
If you pay a larger excess, then your premiums will be lower than they would otherwise be.
However, this only sidesteps or delays you having to fork out a larger lump sum.
Deposits and Monthly Payment Plans
Most insurers, when you start a monthly payment plan, will make you pay a deposit up front. This is usually about 20% of the entire policy cost, but can sometimes be even higher.
In some cases, particularly for the most expensive policies, this doesn’t really avoid the issue of having to come up with a large amount of money in the first place. Given that avoidance of this is the main reason most customers opt for monthly payment plans, the availability of no deposit car insurance is crucial.
No deposit car insurance policies tend to differ from standard policies will monthly payment plans only in the lack of deposit. The costs are generally the same.
Compare No Deposit Car Insurance with Money Expert.
You should always shop around when taking out a car insurance policy, and the best and quickest way to do this is by comparing quotes with Money Expert. Head over to our car insurance comparison page and we’ll help you find the perfect deal for you, at no extra cost.