Insurance questions

NickXX

NickXX

NickXX

Soldato
Joined
19 May 2005
Posts
7,049
Hi all,

I'm going to pick up a new car on Wednesday, and intend to insure it from tomorrow evening (so I can get tax sorted). Does anyone know if I have a penalty free option to cancel the insurance for a certain number of days, just in case things fall through?

Also, is there usually much difference in paying insurance monthly compared to annually (in price)? I can't really afford to pay the £1k deposit, car tax and £1600 in insurance in a single month. I will be insured with Elephant.

MTIA,

Nick
 
Better to pay insurance all at once as then you dont incur the interest, have you thought about opening a credit card up and putting all on that for a few months? Norwhich union i know give 14 days to cancel so maybe same with elephant?
 
NickXX said:
Hi all,

I'm going to pick up a new car on Wednesday, and intend to insure it from tomorrow evening (so I can get tax sorted). Does anyone know if I have a penalty free option to cancel the insurance for a certain number of days, just in case things fall through?

Also, is there usually much difference in paying insurance monthly compared to annually (in price)? I can't really afford to pay the £1k deposit, car tax and £1600 in insurance in a single month. I will be insured with Elephant.

MTIA,

Nick
Click to expand...

You usually get 14 days to cancel the policy and you wont have to pay any fees.
Paying for insurance -
Insurance companies usually have 3 methods for customers to pay for their policies.
1st is paying it all off in 1 go. This is the best method because you won't pay any interest on it and you won't have to worry about a direct debit etc.
2nd method is usually paying monthly. You pay an initial deposit of 2 months (usually) then for the next 10 months you pay pay the rest in installments. This method is the one where you end up paying the most. The insurance companies usally slap on 10% interest for this.
3rd method (not sure if all companies do this) is paying 4 month installments. You just pay the insurance for the first 4 months and it's all paid up. the monthly installments are quite manageable as well. This is the method i chose becuase you dont have to shell out a large amount of money in 1 go and you're not tied to a 10 month direct debit deal either (just a 4 month diretc debit). However, with this method you usally pay about 8% interest.

Like i said, if you can pay it all off in 1 go and forget about it.
If you cant afford to do that then go for the 4 month installment option (if it is available).

Hope the above helps.
 
Cool, many thanks guys - I think I'll load it onto a credit card, and pay it off in the month if I can, if not spread it over two months.
 
If you buy over the phone or on the internet, I think you are covered by the distance Selling regulations, which give you a 14 day money back period. Obviously if you stack it on the way home don't think of canceling.

As to ways of paying, there are loads of different methods ot pay... basically look at how long you owe money. The more you owe, for the longer a period, the more you will pay in interest charges.

The ultmiate credit dodge is to pay on Credit card, then switch the balance to a zero rate transfer, then pay it off on your own time. Make sure you do though, otherwise it's debtors prison for you....
 
Up until this year I always paid my car insurance monthly - I just got into the habit I suppose.
Wasn't until I actually sat down and worked out how much interest I was paying by paying over 12 months that I decided to change.
As said above, Virgin now don't charge for spreading the policy out over 12 payments - however they weren't competitive when I asked them for a quote.
Norwich Union do a spread over the first 4 months of the policy which is considerably less interest than the over 12 months options.
 
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