You probably think that most people pay their car insurance premiums on a monthly basis by direct debit. In fact, you would be wrong in making that assumption as, apparently, just less than 48% choose to do so meaning that over 50% of motorists pay for their car insurance on an annual basis.
For those who pay annually, they are able to make a significant saving over those opting to pay monthly. A major price comparison website looked at just under 24 million quotes for car insurance to find that the 48% of drivers paying monthly were paying an average of £621 per annum for their car insurance. However, motorists who have opted to pay annually, pay £532 per annum – that is a saving of £89. That is a significant sum that, if all monthly paying drivers were to switch to paying annually, could result in a huge saving of about £1.6 billion.
The research also showed that those drivers who have chosen to pay monthly tend to have car insurance that is a higher premium than those that pay annually. In fact, the average cost is 24.7% higher.
Yes, of course, the cost factor is undoubtedly the deciding reason why people prefer to pay on a monthly basis although there are no doubt some people reading this who have been totally unaware that they could save money by switching to pay their car insurance premiums on an annual basis and would be quite happy to do so. There are a minority of car insurance companies who do not impose an additional charge if you pay monthly.
So, if you feel that you are in the fortunate financial position of being able to pay for your car insurance on an annual basis rather than on a monthly basis you could contact your car insurance provider to discuss the matter further.