Paying monthly vs annually for car insurance

Pay-monthly car insurance will cost you more overall than paying annually for car insurance on the same policy.

Car insurers say pay-monthly insurance is more expensive because they are, in effect, agreeing to loan you the full cost of the insurance, and for this they will charge you interest. You pay them back for the insurance, plus the interest, in monthly instalments over a year.

Pay-monthly car insurance is very popular. Almost half (46 per cent) of car insurance…

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