Drivers paying millions extra for monthly car insurance payments

Wed, 11 Jun 2008

Drivers in the UK are spending a total of £624 million extra annually by paying their car insurance monthly, says a new survey.

According to research by uSwitch, around 13 million people opt to pay this way rather than make a one-off payment, even though they are being charged 23.8 per cent APR on average by insurance providers in order to do so.

Petrol prices have risen by 31 per cent since 2007 and with insurance premiums costing more, uSwitch have suggested that monthly payments are worth considering. Ashton Berkhauer, insurance expert at the consumer watchdog, said: "It may seem like a neat solution if you're cash strapped but it carries a hefty interest price tag so should be avoided where possible." A recent survey from Tesco has found that those who are approaching their 40th birthday favour Porsches, while Fiats and Peugeots are more popular with younger people.
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