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Paying monthly for car insurance is now the aim of millions of UK motorists, with more than 50% of them, particularly young drivers, trying to pay the very minimum possible deposit with the longest period to pay the balance.

Who needs no deposit car insurance?

Most drivers who prefer to insure their cars by buying policies with the smallest possible deposits upfront are, unsurprisingly, those whose premiums are the highest. This includes the under 25s, those with convictions or fault accidents, and those with a low, or no, no claims discount.

Does it cost more to pay for insurance monthly?

Yes it does. Whilst no – interest deals do exist from time to time, nearly all insurers make interest or management charges on top of the basic premium for those who don't pay the full cost of their insurance cover upfront.

Does a low credit rating affect the premium I will have to pay?

Many insurers do take into consideration the credit rating of an applicant when working out that motorist's risk factor – which is what insurance premiums are based on. The poorer the creditability of drivers, the more chance there is of them driving unsafe cars or failing to maintain them properly. Also, there is the danger that the agreed repayments will not be met in full.

Are there 'no deposit' insurance policies?

No– deposit insurance those not normally exist, at least for those who are moving to new insurers buying a policy for the first time. UK contract law states that at least some payment must be made before an insurance contract is valid. However, this can often be as little as a 12th of the total premium.

Do young drivers pay more for monthly repayments policies?

Most 17 to 25-year-olds have little or no credit record. Some insurers see them as being more risky since they prefer to see evidence that their customers pay their bills regularly and and time. So, yes, many under 25s are hit with a double whammy of higher than average premiums, plus punitive interest rates on top of that.

Should I buy low deposit car insurance?

If you can afford to pay the premium in advance, or even borrow the money, you will usually benefit financially by doing so. Many of the cheapest insurers are not prepared to accept repayments on a month-to-month basis; this means that not only will those who prefer to buy their policies in this way have possibly heavy interest charges to pay, but there will also be unable to access the very cheapest possible premiums. This can add a huge additional financial burden to many of these drivers.


Yes, it is possible to pay for your next motor insurance premium with a very low deposit and up to 12 months in which to repay the balance, by regular instalments. It is, however, usually a much more expensive way of buying your policy and should be avoided if it is at all possible.



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