car insurance pay monthly no deposit

We live in a world of low inflation – also we are told – so why is it that when our car insurance premiums are due there are anywhere between 10 and 50% higher than they were a year ago? The car insurance companies claim that most of the cars of this is the readiness with which people seek compensation on the slightest pretext, and there is indeed some justification for this claim, although their claim that fraud is costing them an inordinate amount rings a little hollow when we look at all the ways in which certain companies have attempted to wriggle out of paying claims in the past! Whatever the truth is, the fact is that insurance costs for our cars has risen dramatically to the point when it is not only causing problems for young people (who traditionally are charged the most for their policies, because of the accident rates of the lower age groups) but even people who have always considered themselves to be safe drivers. It is hardly surprising that no deposit car insurance has proven so popular over the last couple of years. For more information visit www.lowdepositcarinsurance.co.uk

Whilst the term "no deposit car insurance" is a misnomer – it is not possible for an insurance contract to exist without, at least, some deposit being paid – in practice no deposit policy does exist. The way that it works is that the insurer calculates a premium based on the normal risk, plus the extra costs that are involved in a policy which is not paid in full upfront, and this is divided into 12 equal monthly payments. The first payment is made by credit card which means that the buyer does not have too out any money at all in advance, the deposit only being paid when the credit card bill for that particular transaction is due. It all sounds very easy, but the hard and simple fact is that the premium has to be paid at the end of the day whether it is paid in full right at the outset or over 12 months, and since insurance companies much prefer to have their money in advance it can prove far cheaper to pay in this way than to make monthly repayments.

It is not so long ago of course that it was impossible to pay monthly at all, but car insurance being the competitive business that it is, insurers have had to embrace this new type of business or see their market share fall further behind. Whether or not it is wise to seek market share as being more important than profitability is something that may not become clear for some considerable time.

One very important point that must be borne in mind is that anyone who takes on a policy of this type is committed to making all payments and completing the contract. To fail to complete all the payments would be a breach of contract; most policy documents specify charges which will be levied in the event of such a failure to pay up and anyone who cancels their payments before the end of the contract period can find themselves not only without insurance but also with debt collectors chasing them for not inconsiderable sums. In addition, insurers are legally bound to inform the licensing authorities when a car insurance policy comes to an end, and people who find themselves terminating a policy may well discover how Draconian the penalties are for driving without insurance far more quickly than they expect; yes, big brother really is watching us.