Car insurance prices can plummet for drivers with a simple change - 'It could save you some money'
Drivers spend more when paying for their insurance in monthly instalments
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Drivers could save roughly £200 on car insurance premiums by paying in a lump sum rather than monthly, as motorists continue to struggle with high prices.
According to new data, drivers who pay for insurance monthly are spending more on average than those who pay upfront.
In total, drivers could save around £249 by paying for their policies in one go rather than paying monthly.
Go.Compare found that in April 2023 drivers who paid for policies up front were charged £357 compared to the spread-out fees of £584.
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Premiums were up more than 50 per cent compared to last year
GETTYThe data also showed that for the same period this year in April 2024 drivers were charged £452 for annual insurance costs but £684 through monthly payments.
Tom Banks, car insurance spokesperson for Go.Compare, explained that when motorists pay for insurance policies monthly, “the insurer treats it like a loan and therefore charges interest”.
He said: “This is why the total cost for car insurance premiums is generally higher when split monthly. So, if you can afford to pay all in one go, it could save you some money.
“It’s also worth considering exactly when you are purchasing a new policy, getting car insurance 26 days ahead of your renewal date could save you an impressive 55 per cent on average, compared to purchasing on the same day.”
The cost-saving hack comes as car insurance premiums more than doubled since last year with drivers now paying 56.4 per cent more for cover.
To help combat the impact this has on drivers, the Association of British Insurers said it was working on a solution.
Jonathan Fong, manager of general insurance policy at the ABI, detailed: “Insurers are aware of the financial challenges customers are facing and are determined to keep motor insurance as competitively priced as possible.
He stated that the increase in prices was largely driven by “above inflation increases” in the cost of repairs, thefts and replacement cars.
This meant that insurers were forced to pay out a record £9.9billion in claims for the same period, roughly £1.13million per hour.
Banks added that while the cost of car insurance is slowly stabilising, it is still higher than it was this time last year.
Hecommented: “We always recommend doing your research, and using a comparison site is a great way to consider all your options side by side so you can get the right cover at the right price.”
According to data from Confused.com, the average car insurance policy costs this year were £941, £54 less than in the last three months of 2023.
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The average price of car insurance is now £941
GETTYLouise Thomas, from Confused.com, said in the current climate the group want to help drivers do "all they can" to make their insurance more affordable.