Having chosen which company that you wish to arrange your car insurance with and you are happy with the quote you then need to think about paying for the insurance for the next twelve months. So, what options do you have?
Well, the most popular choice that people make is to arrange to pay the car insurance premiums on a monthly basis by direct debit. This is undoubtedly the most convenient way to pay and is ideal for those that don’t have several hundred pounds to pay for the annual premium all in one lump sum.
As part of the application process you will be asked to provide your bank details including the account number and sort code so that the car insurance company can set up the direct debit. In addition, you will usually be asked to pay one or two months premiums in advance that you can pay by debit or credit card.
What you do need to be aware of is that if you select to pay monthly you are in effect borrowing the money from the car insurance company so they are likely to charge you extra for this by adding interest to the normal premium. This will have been reflected in the quote that you had been provided with but it is worth looking at how much the interest comes to as, if you had been able to pay the annual premium all in one go, you would have saved yourself some money.
If you can afford to pay for the car insurance premium in full when the policy is set up, then the normal way of doing so is to pay by debit or credit card but future annual premiums may often be payable by direct debit meaning that you don’t have to remember to pay it in 12 month’s time.
So, hopefully, you now have a better idea about the different ways of paying for your car insurance.