Pay Monthly Insurance – How much?!
Discussion
So the girlfriend has just bought her first car (she's 24 but had a license for years) and it now comes to insuring the thing. 1.2 2008 Punto gives a premium of about £1250 for the year, although she is paying monthly, so I told her to expect a bit of interest for the finance and it would be maybe £100-£150 more...
So quote goes through fine, then she gets told unflinchingly by the person on the other end of the phone that the option to pay monthly "just" puts it up to £1950! I've paid monthly before and it wasn't a price hike of £700. This is by far the cheapest we've found too. That's over a 50% rate on interest. Feel properly violated by the insurance companies.
Is this normal, and why would it be so high?
So quote goes through fine, then she gets told unflinchingly by the person on the other end of the phone that the option to pay monthly "just" puts it up to £1950! I've paid monthly before and it wasn't a price hike of £700. This is by far the cheapest we've found too. That's over a 50% rate on interest. Feel properly violated by the insurance companies.
Is this normal, and why would it be so high?
LuS1fer said:
Can she not apply for a credit card offering 0% on purchases for 12-18m and then pay that off monthly?
That's definitely an idea, although she's just taken a lump of finance out to close credit cards etc. So not sure if it would work. My frustration is really why the same product can cost £700 more.
It's probably to take account of the risk that the insured stops paying if they write the car off after 6 months. So many people seem to think that paying monthly means they have a monthly policy, when it's an annual policy and a finance agreement over 12 months, so you have to keep paying whatever happens.
APanda said:
That's definitely an idea, although she's just taken a lump of finance out to close credit cards etc. So not sure if it would work.
My frustration is really why the same product can cost £700 more.
It is the same product and it does cost the same. When you ask for "pay monthly" you are just asking the insurer to give you credit for the premium. In this case you are paying £700 to borrow the money. My frustration is really why the same product can cost £700 more.
Amateurish said:
It is the same product and it does cost the same. When you ask for "pay monthly" you are just asking the insurer to give you credit for the premium. In this case you are paying £700 to borrow the money.
Thanks for clarifying that, she was prepared to pay some, but I just don't think over 50% interest is on to be honest. We've tried different insurance companies, but they all seem to be at it.
Amateurish said:
It is the same product and it does cost the same. When you ask for "pay monthly" you are just asking the insurer to give you credit for the premium. In this case you are paying £700 to borrow the money.
Sort of. Admiral offer a discount for paying annualy (that is price on the aggregator). So if you want to pay monthly you get a) Interest Charge b) Removal of Discount.Of course, this is clearly an idiot tax. The idea that Admiral would put a very low price on a comparison site to drive them to the top spot, take you to their site, where they can get you to call up to get a monthly policy and sell "face to face" is clearly a nonsense
Edited by Noger on Tuesday 19th June 10:59
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