British motorists are in for a significant financial relief as new research reveals a simple yet effective way to slash their car insurance costs. By making a small change in their payment method, they could potentially save an average of £239.
The data shows that the payment approach for car insurance policies can lead to a substantial difference in the overall cost. When motorists choose to pay for their car insurance annually, the typical cost for an annual policy is just £418 if paid upfront. However, those who opt for monthly instalments face a much steeper bill. Over the course of a year, their payments add up to £657, which is a staggering 57% increase compared to the upfront annual payment.
This large variance exists because monthly payment plans usually come with additional interest charges and administrative fees. These extra costs gradually inflate the total amount paid over the year. Tom Banks, the car insurance spokesperson at go.compare, commented on these findings. He said, “It may surprise many drivers that there is such a large difference in the cost of car insurance, depending on whether you choose to pay monthly or annually.” He further added, “Our latest data shows you can make huge savings if you’re able to pay up – front for your car insurance. Choosing to pay monthly often involves added interest or admin fees, so paying annually can really help to keep the costs down.”
While monthly payments might seem more manageable for some, given the spread – out nature of the payments, the potential savings from annual payments are hard to ignore. Banks acknowledged this, stating, “It may be tempting to opt for a monthly payment as this can make it easier to manage your finances, but with an average saving of £239 for an annual policy, it’s certainly worth considering paying annually if you have the budget to do so.”
Beyond this payment method change, there are other strategies motorists can adopt to reduce their insurance costs. Timing plays a crucial role. Go.compare’s data indicates that buying car insurance cover 26 days before the renewal date can lead to average savings of 30%. According to Banks, “Using a comparison site like go.compare makes it quick and simple to get quotes from multiple insurers in one place. You only have to input your details once and you can see exactly what each policy includes, all in one place.”
Accurately estimating annual mileage can also have a positive impact on insurance premiums. The fewer miles a person drives, the less their insurance is likely to cost. Maintaining a clean claims history is another key factor. Insurers often reward motorists who haven’t made any claims with discounts on their premiums. Banks noted, “This will help to get a cheaper policy because insurers reward motorists who are claim – free with discounts on their premiums.”
Vehicle security enhancements can also lead to savings. Adding features like wheel locks and insurer – approved alarms to a vehicle could potentially lower insurance premiums. With the average UK driver potentially saving hundreds of pounds through these simple adjustments, these findings offer much – needed relief in the face of broader cost – of – living pressures that are affecting household budgets.
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