I always pay my car insurance annually, but my poverty-stricken son is taking on the old family Fiesta. He wants to pay his insurance premium monthly - which could prove useful if the car fails its MoT test in the summer and he cannot afford to continue with it.
I was assuming that a monthly payment would be sufficiently flexible so that it could be terminated during the year - but, could anyone on the Backroom tell me if there is normally any sort of committment to continue the payments for a whole year if the car dies?
|
|
Yes I believe the commitment is for the year which catches a lot of people out if they scrap the car after only a few months have passed. Normally you would then buy another car so the policy can just run on with the replacement car. but if you don't buy another then I think you are liable for the remainder of the year.
|
|
Drat!!! But many thanks for the information, Xileno. Is anyone else able to confirm that - possibly by experience? Thanks, Waino.
|
|
Motor Insurance is normally an annual contract even if the Insurer agrees to accept monthly payment. In the event of cancellation the insurer will normally cancel at what they call "short rate" terms. Typically if they have been on risks fo 6 months or more they wiil charge you 100% o the annual premium. One month might be 20%
|
Yes, normally paying by instalments is just that - not monthly insurance.
Worst case scenario is that you make a claim in month one, car gets written off and you have to pay the next 12 months in one go as the policy is terminated.
Martin
|
|
|
|
|
It depends on the insurer, check before buying
|
|
Budget Insurance used to do monthly car insurance years ago - they were marketed as "Budget Monthly" Don't know if they still do this. Other than trying them, my only suggestion would be to read the cancellation small print of as many insurance co's as you can and perhaps select the one that combines the best combination of low premium with best refund policy - i.e pro rata would be best.
|
|
Try ecarinsurance.co.uk - They seem to have a genuine monthly scheme (look under 'pay as you go').
|
|
|
|
From memory - and I'm not sure - Direct Line allow you to cancel in year 1 and just charge you for one extra month (ie you cancel 4 months in you pay for 5 months). I paid monthly with them a couple of years ago because they offered me 0% terms and I vaguely remember reading this somewhere. I believe once you had then been with them a full year, if you paid monthly again you were allowed to cancel at any point with no extra fee.
But I'm not sure - might be worth ringing them to check.
|
|
Many thanks for the replies. As it was only TP insurance we were looking for, we took the cheapest quote from confused.com. It would have been possible to pay monthly (more expensive) - but a larger portion of the premium had to be paid at the beginning. In the end, we did the usual and paid the whole premium in advance.
|
|
When I was younger and had no cash I paid monthly. I was tied into 12 months. I was told that essentially the insurance got paid on day 1 of the policy for the year using a 12 month loan provided to me by the insurance company, or third party. With the intererst rate they charge for paying monthly it works out better borrowing money from the bank.
|
|
|
|
![2025 Volkswagen Tayron 1.5 eTSI Elegance 5dr DSG7 [7 Seat]](http://images.honestjohn.co.uk/imagecache/url/crop/90x60/https/cdn.uk.prod.group-mobility-trader.com/images/cas/e6dd2cd44c6e0080297347fdf71bf5af/c348753c96bae40930b0dbc53b488366.jpg)
