For those who are tired of paying a large deposit on auto insurance, there is the choice for those who qualify of selecting a policy that does not require a deposit.
When you pay monthly for insurance, a deposit is required which can be upwards of 20% of the total amount of the policy. However, a no deposit insurance coverage foregoes the deposit, and you only pay the monthly premiums.
For the most part, people with good credit ratings and those who have paid regularly on their insurance over time may qualify for not having to pay a deposit. There are auto insurance companies in the UK that offer this type of policy.
What makes no deposit policy worth it includes at least five reasons which work for all drivers. You can take advantage of this type of coverage if you qualify.
Lower Price: Generally speaking, the price that no deposit car insurance companies charge will be less than those who demand a deposit for monthly payments. This means that you will save money both immediately and in the long run because you are not adding the typical 20% deposit to your insurance bill.
Easier Budgeting: When deposits are required, it is tacked on to the first payment of your auto insurance. With no deposit, each month is the same when paying your insurance premiums. So, it is a lot easier to budget your insurance when you only have to pay the same amount each month. You will not be caught off-guard by a large deposit payment that often messes up budgets.
Greater Convenience: It is far more convenient not to have to pay a deposit for your insurance which naturally makes it easier on you and your budget. Many people who are caught off-guard by having to pay a deposit may wind up short on other bills, so not being caught by surprise when paying their auto insurance is always a good thing.
Fewer Hassles: It may seem like the deposit is always due in the same month that you have to pay other large bills. By not having to scrounge for the extra money, you can instead focus on other bills and necessities. This means fewer things to worry about and far less hassle with paying what you owe.
Better Options: Because you qualify for no deposit auto insurance, it also means that you are in a better position to be eligible for lower rates when they occur. For younger drivers who have yet to build up their experience on the road, no deposit offers a considerable advantage that may lead to lower premium cost in the future as long as they maintain their driving record.
There are different no deposit schemes in the UK where you can select the right policy that fits your needs. This means with no deposit policy you still get to choose the type of coverage you want at a price that easily fits your budget.
You may have noticed when paying for car insurance one month at a time that the first payment is significantly larger than the rest. This is known as the car insurance deposit, and it is important to understand its significance as part of your monthly payments.
If you do not pay for the entire insurance coverage at once and instead pay month to month, you are essentially taking out a loan from the insurance company. As part of paying this loan on a monthly basis, a deposit becomes necessary to protect the insurance company in case future payments are not made.
When monthly payments are viewed as paying back a loan, then the deposit does make more sense as a concept. Plus, there are low and no down payment insurance policies geared toward those who have good credit which again refers to the lending nature of monthly car insurance. Learn how to qualify for no deposit policy.
It’s possible to get a refund if you cancel your policy within 14 days after you sign the contract. If you make a claim within the 14 day period, the insurance company will usually deduct the sum paid out from the refund itself along with the first premium. However, if you wait until after the 14 day period, it is still possible to get at least a partial refund of your deposit which is usually pro-rated for the time that passes. So, a car insurance deposit refund is possible even several months into the policy itself.
The typical cost for most policyholders is 20% of the total value of the insurance. For example, if the entire policy for the year is £1000, then the deposit will be £200 as that is 20% of the whole policy. Again, this amount may vary depending on many factors, but 20% is the standard that most people will face when making monthly payments for their auto insurance in the UK.
As a reminder, it is possible to get a policy with a lower or even no deposit payment required depending on the insurance company you choose.
Your first month’s payment will include the entire deposit. So again, if your policy in total costs £1000, then your first month’s payment will be £300. The remaining payments will be at £100 each month.
It is possible to avoid paying a deposit if you decide to pay for the entire insurance policy at once. Because it is all paid for from the beginning, no deposit is required and the coverage will last for the duration of the policy. Also, if you have good credit or a long history of paying your insurance bills on time, you may qualify for no deposit policy.
In the end, your auto insurance deposit is a part of your overall insurance coverage when you pay on a monthly basis. Be sure to check out all the options to see if you qualify for a low or no deposit auto insurance.
There is no doubt that car insurance payments are expensive in the UK. Despite measures to ensure that all UK drivers purchase some form of car insurance, the payments can be considerable. This is especially true for young drivers and those who have yet to build up a good driving record. You can pay for the entire policy up front or pay each month and have a large deposit due on your first payment.
However, the good news is that you can spread out the payments to make it easier on your budget thanks to no deposit car insurance.
This is a type of car insurance that does not require a deposit. Normally, auto insurance companies require a deposit of up to 20% if you decide to pay every month. That can make monthly payments difficult for those on a budget, particularly the first instalment when the deposit is added. However, you can make no deposit car insurance which means that the monthly payments are the same.
You will need to qualify for no deposit insurance which means having a good credit score and history of making your insurance payments on time. The good news is that for those who qualify they can save a considerable amount on their policy.
Without having to pay the deposit, you can quickly spread out the payments of your auto insurance month by month. Because no deposit is present, your first payment will be the same as every payment that follows. The advantages of this form of insurance are considerable, particularly for those who are young and facing high premiums.
Lower First Payment: The most obvious advantage is that you pay significantly lower amounts on your first payment. Quite often, the first instalment with deposit included can be quite overwhelming. So, not having to pay the deposit can save you a considerable amount of money and make it easier to fit into your current budget.
Budget Your Payments: It is far simpler to plan your payments when you do not have to pay a deposit. This means pulling out the same amount of money from your account or having the insurance company receive regular payments direct from your bank.
Build Good Payment Record: Insurance companies like to get their payments on time and over the course of year or two may reward your efforts with lower premiums. Naturally, this will depend on other factors such as your age and driving record, but eventually paying your insurance premiums on a regular basis will pay off.
In the end, spreading out your payments using no deposit car insurance will save you money and will start adding up over time thanks to your good payment record. You can find no deposit insurance with several carriers, and the rewards are considerable when you choose this type of policy. This is a great opportunity especially for those who are on a tight budget or paying high amounts for car insurance.