No Deposit Car Insurance

How many people, I wonder, will buy a car today, and completely forget about just how expensive it is going to be to ensure their new pride and joy? With a huge rise in the cost of car insurance over the last few years, and particularly over the last 12 months, premiums for many people are getting way beyond a joke and it is not much fun to have bought a new motor only to find that one cannot afford the insurance premiums for it!

Nowadays we are looking at absolutely frightening premiums for many motorists, with quotations on average approaching or even exceeding four figures for even relatively modest vehicles and drivers with good records. A lot of motorists, to put it bluntly, simply cannot afford to pay these premiums upfront and it was common back in the days of unlimited loans for people to borrow the money to pay their car insurance, often over long periods and extortionate interest rates, in order to get themselves on the road. Those days are now gone; the problem still remains and a lot of insurance companies have answered it by producing no deposit car insurance schemes, about which you can find info here.

It started with a small number of companies offering monthly payment facilities for the bulk of a policy, with a deposit of around 20% payable in advance, and then some enterprising insurers realised that they would capture far more business if they could eliminate the deposit and so no deposit schemes were born. These entail the splitting up of the premium into 12 equal bites, which are paid monthly, the first payment at least be made by credit card. This means that it is possible to ensure the vehicle even if the buyer has no money at all in the bank with which to pay the premium! What has to be recognised however is that this is usually a more expensive way of buying insurance because the insurance company would far prefer to have the money in its own bank accounts, in advance! Hardly surprisingly then, most of them do add interest of anything between zero and 24% APR or even more, and so it is a product which has to be bought carefully in order to avoid making an already expensive policy even more so.

Insurance will never be cheap again; there are however a lot of offers on the market because car insurance is a highly competitive business to be in and so insurers will sometimes bend over backwards in order to attract new clients. Since a very large number of people nowadays wish to pay for their insurance on a monthly basis it is very often possible to get a very attractive deal indeed by shopping around, and the easiest way to do this is by using a dedicated no deposit comparison engine. This will sort through a large number of companies and provide you with details of not only what the basic premium is but also what it will cost you if you make your payments on a monthly basis with no deposit. Sometimes the difference in premiums are surprising; insurance companies recognise the fact that although someone buying their policy may require monthly payments at present, but does not necessarily mean that the same situation will exist when the policy comes up for renewal. Insurance companies are extremely fond of people who renew without looking around for alternative insurers, because they do not have to to offer them any initial discounts and can often get away with sneaky price increases, relying upon natural human inertia to stop their customers from looking around for a better deal. The moral therefore is, if you buy your car insurance through a no deposit scheme that you found through a good comparison site, then use the same comparison site again next year when your renewal premium is due; you could save yourself a great deal of your hard earned money!

Copyright Jean Lefebre 2008