Monthly car insurance doesn’t have to break the bank

With car insurance premiums rising by nearly 40 per cent on average this year, drivers looking to keep car insurance costs manageable may opt for the convenience of monthly instalments; failure to identify the best deals could prove to be costly so shopping around is crucial, according to research by moneysupermarket.com.

moneysupermarket.com looked at the options available to consumers who want to pay their annual car insurance premium in monthly instalments. Unfortunately insurers charge their customers for this privilege and those who decide on monthly repayments can expect to pay on average an additional 10.13 per cent to the cost of the original premium. This can be dramatically reduced however, if motorists shop around for the best deal - as little as a 5.35 per cent increase.

Steve Sweeney, head of car insurance at moneysupermarket.com, said: "Running a car doesn't come cheap, and many of us will be looking for ways to trim our outgoings and make our finances more manageable. Paying for your car cover on a monthly basis is a good way of keeping your initial outlay for car insurance down, however, while this may be more convenient compared with forking out for the whole year's premium, it's crucial to make sure you're aware of the additional costs involved. It is also necessary to ensure that you scour the whole market to find the most reasonably priced deal. Insurers can also help motorists by not charging more than they need.

Motorists could consider other financially-savvy ways to pay for their car insurance premium, such as using a zero per cent purchase credit card.

Steve Sweeney continued: "By putting the cost of the premium on to a zero per cent purchase credit card, drivers would be able to pay for their policy in monthly instalments without paying interest. There are a number of zero per cent purchase cards on the market, so if you are eligible, you'll only pay for the original price of your policy. However, you need to be disciplined if you use a credit card, and aim to pay off the balance before the end of the promotional period, and within 12 months if the promotion is longer otherwise you will still be paying when your insurance is up for renewal."