Drivers could benefit from money off their car insurance premiums every year by using a saving hack to help them bring down inflating prices.
The method could see drivers save up to £46 on their insurance costs by paying upfront in a single lump sum rather than in monthly instalments.
Research found that the total yearly cost of paying monthly for a car insurance policy is £938 on average, but paying an annual lump sum is £46 cheaper at £892.
As car insurance premiums rise rapidly across the country, drivers will be looking for cheap, reliable options that will see their vehicles covered all year long.
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The hack could see drivers save nearly £50 on their insurance premiums
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Julie Daniels, motor insurance expert at Compare the Market, said: “There will be many motorists feeling the impact financially from the increasing cost of car insurance, amongst the rise in other household bills.
“With the cost of car insurance now around £900 on average, some motorists may be considering paying smaller amounts on a monthly basis, rather than one lump-sum payment.
“Although monthly payments might seem easier and may be the only viable option for some households, if you’re in a financial position to be able to pay your car insurance policy annually, this could typically lower your premium by up to £46.
“If you are unable to pay your premium in one go, there are other options which could help save you money.”
Offering advice to drivers, Daniels explained that shopping around ahead of renewal is one of the best ways to see what deals are available.
Switching to a telematics policy may also be a good option for some young motorists, whose premium could be reduced if they demonstrate they are a safe driver, she added.
Monthly car insurance payments are one of the main monthly costs for drivers, with motorists willing to pay more to ensure they are covered in the case of a breakdown.
Most insurers will require motorists to pay an initial deposit, which is usually 20 per cent of the annual amount. Interest is then added to the remaining 10 or 11 monthly payments.
For motorists trying to make reductions to the cost of their
car insurance, Daniels detailed how it’s worthwhile shopping around before the
policy is renewed to see what deals are available.
Meanwhile, drivers have identified finding car insurance providers which pay out after claims as a high priority.
It follows the recent Financial Conduct
Authority review which found cases of insurance companies refusing to pay the
full amount after an accident.
One couple had been involved in a car accident and received
a compensation settlement of £8,400, despite paying £12,000 for the vehicle just four months earlier.
The pair then rejected two further offers of £8,610 and £9,285. Their insurer even sent an expert out to survey the damage to the written-off vehicle.
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Some insurers have been accused of not paying out the full amount of compensation after an accident
PA
A spokesperson for the insurer apologised for the payment delay and said it judges cases by the market value of the vehicle when it is written off.
