Paying an upfront deposit for your car insurance can be a pain, particularly as the deposit is always likely to be more than the monthly payments. In this guide we look at what low deposit insurance is and why you should consider it.
Whilst many people benefit from paying for their car insurance upfront and in full, for many others it is simply not possible. As the car insurance industry has seen significant price rises in the past few years, the majority of people face paying for their insurance in monthlyinstalments.
Usually car insurance is paid in 11 monthly instalments, with the first being paid as a deposit. Because of the way the cost is split, this deposit will usually be at a higher rate than the monthly payments.
Low deposit car insurance is where the initial payment is no larger than the remaining monthly payments.
A low deposit car insurance is good for drivers who need cover and don't have the full amount of money needed for the cover. Still when you are looking at policies with low deposit, keep an eye on the total sum of the policy. It can get quite high while the deposit is still low.
There are many companies that now provide low deposit car insurance; however it’s always important to ensure you’re comparing insurance policies like for like as there can be small but important differences between them. If you’re unsure then just make sure you read the company’s small print, as with many things in life, the devil is very often in the detail.
To search out the best deals you can try looking on comparison websites; these invariably are the best option when it comes to comparing deals. However, that said, you should always ring around companies that do not feature on these sites, as they may well have just as good a deal, if not better, as the ones that do feature.
The reason why low deposit car insurance can cost more is due to a couple of reasons; first and foremost, there are always a small number of drivers that following the taking out of a low deposit insurance plan, fail to complete all of the payments; this, in turn, costs the company money. The second reason is that the insurance companies cash flow must be considered, where drivers pay up front, the cash is available immediately, as opposed to coming in smaller, frequent payments.
Whilst low deposit car insurancecan cost a little more in the long run, it certainly has its benefits, particularly when the driver in question is having a particularly tight month on the finance front. To find the best deal you should use comparison sites in addition to contacting companies directly; by simple doing a little research, you can benefit from all low deposit car insurance has to offer.
You may want to read about: Car Insurance