A large number of people who pay for auto insurance prefer to go month by month as opposed to paying a large sum to cover all of their insurance for the year. This is certainly understandable as it is a considerable amount of money to spend at one time. However, there are big disadvantages in that paying your premiums monthly means adding an additional deposit of up to 20%.
Fortunately, there are certain low deposit car insurance schemes that will allow you to pay on a monthly basis without having to make a deposit. This can be exceptionally good for young drivers who may have difficulty finding enough money to pay for their insurance, fuel, taxes, repairs, and the like for their vehicle.
When it comes to finding the right schemes for no deposit car insurance, it helps to understand just how the monthly premiums are charged. If for example the total yearly premium is £520, then you will have to pay installments of £51.60 for eleven months which is £47.60 more than if you paid all at once. This means that you are paying about 5% to 10% more by going monthly rather than paying it off at the beginning. This is because the monthly premium system is much like a loan where you are granted the insurance coverage for a year and have to pay it off in monthly installments with interest.
This is where most people shop around to see which insurance company will offer the lowest price monthly plan. Comparing rates is an excellent way to find the least expensive so that you will keep more money in your pocket.
There are good reasons to choose such a plan, particularly if you are willing to take a little time to search through a number of insurance companies. For example, if you were to choose a policy that costs £644 per year, you might have to pay a whopping £128.80 as your first installment before paying around £51 for the remaining monthly premiums. Considering how difficult it may be to just get past the first payment, shopping around for a no deposit car insurance pay monthly system is certainly a better option.
The good news is that out of the more than 100 insurers in the UK, there are many who do not ask for an initial deposit. This can save you a considerable amount of money if you decide to pay per month. You will need to look for these insurers and see if there are any qualifications when it comes to getting this type of insurance. Of course, if they do not ask for a deposit, then you should not try to enlighten them that they can.
Some insurers will want you to have a good credit rating, driving, record, and a record of paying your insurance on time. If you have accomplished all of them, then getting insured without having to pay a deposit becomes far more likely.