Type both prices from the same quote.
Monthly costs £54.00 more
Paying monthly totals £654.00 against £600.00 in one go — 9% extra.
That works out at roughly 21.31% APR. Your quote must show the real APR, so compare it with this figure.
Paying monthly is usually a credit agreement, so the insurer or a finance company may run a credit check. If you can afford it, paying yearly is normally cheaper; a 0% credit card is another option some people use.
Why monthly usually costs more
When you pay monthly, the insurer — or a finance company working with it — is usually lending you the rest of the year's premium. That makes it a credit agreement, with interest, and it may involve a credit check. The quote must show the APR and the total you'll pay.
Ways to avoid the extra cost
- Pay the year in one go if you can afford it.
- Ask whether the insurer offers interest-free monthly payments — some do.
- Compare the APR between insurers, not just the monthly figure.
If you miss a monthly payment your cover could be cancelled, which would leave you driving uninsured. Contact your insurer straight away if you're struggling to pay.
The starting figures are examples, not prices we've checked or quotes. Replace them with figures from your own policy, quote or receipts. Nothing you type is saved or sent anywhere.
Next steps
Found this helpful? Share it with family and friends.
Know someone who might find this useful? Share it with them.