No Deposit Car Insurance
Many insurance providers will allow you to avoid the pain of forking out a lump sum to pay for you cover by opting for 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 some cheap car insurance companies out there who will offer a monthly payment plan with no deposit.
In this guide:
Spread the Cost of Your Insurance by Paying Monthly
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, and so paying monthly can soften the blow a bit.
However, most providers will add additional costs that mean you end up paying more in total than you would 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.
For example, you can opt for a larger voluntary excess. The excess is the amount you pay in the event of a claim, with the insurance provider paying for the shortfall between that and the value of the claim.
If you pay a larger excess, then your premiums will be lower, but bear in mind that this can prove false economy if you do have to shell out in the event of an accident.
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 Insurance is crucial.
Apart from the lack of deposit, these policies are exactly the same as any other.
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You should always shop around when taking out a Insurance policy, whatever kind of policy you're after. Head over to our car insurance comparison page and we’ll help you find the perfect deal for you, at no extra cost.