For drivers, car insurance is just another expense to deal with. After all, it’s not like you can just decide you’re not going to pay it, as driving without at least third-party insurance is against the law. Many people opt to pay for their motor insurance monthly as this spreads the cost of cover and make it more affordable.
However, if you’ve had problems with your credit history, some insurers might be more likely to turn you down for monthly car insurance payments and will instead only accept you if pay your annual premium in full.
You might not think of monthly car insurance as a form of borrowing but your insurer is essentially covering you for a year and letting you pay this back every month. That’s why it’s more expensive in the long-run to pay for insurance monthly rather than annually. However, paying monthly for insurance may be the only option for many drivers who can’t afford to stump up the full annual cost of their motor insurance in one go.
Depending on the insurer, you might find that you have more difficulty getting accepted for monthly car insurance premiums if you’ve had problems with your credit history in the past. Even if they are willing to let you pay monthly, you may find that some insurers will ask you to put down a deposit as a percentage of your annual premium. For example, if your total annual premium is £1,000 and your insurer asks for 20% as a deposit, you’ll have to put down £200.
You might find it difficult to get this amount of money together to put it down as a deposit if you’re on a tight budget. That’s why you might want to consider shopping around to find an insurer who will let you pay monthly.
How you could pay monthly
If you’re a thinkmoney customer, you could get accepted for monthly premium payments when you take out your insurance through thinkmoney motor insurance, even if you have bad credit. The credit is provided by Ideal Finance, which is also part of the Think Money Group.
When you have any money coming in, the account will automatically hold any funds needed to cover regular bills that you’ve told us about, including your motor insurance premiums. The money that’s left over will then be transferred to your card so you’ll be able to spend it without worrying that you’ve forgotten anything important.
To find out more about how thinkmoney could cover you to drive your car, check out our car insurance section.