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How I coped with the cost of car insurance

I was well into my thirties the first time I bought car insurance, having left it later than most people to learn to drive. You would be forgiven for thinking that my age might serve me well in terms of making insuring a vehicle cheaper, but my inexperience in the motoring world really did cost me when it came to securing cover. The lump sum that insurers needed to cover me was just too much for me to pay in one go after having just shelled out for a car and so, I decided to pay for my insurance on a monthly basis.

How did I find the best policy?

We’ve all seen the TV adverts for price comparison websites, these are probably the first places that most people think of to go to when they need to buy a new product or to renew. I was no different, I went straight to Compare the Market, once I’d decided to purchase my Citroen C3, entered all my details and then winced as the prices for a year’s cover were delivered. I then selected a tick box that allowed me to look at what the policies would cost me on a monthly basis, and breathed again, as the price looked much more affordable.

What happened next?

At this stage in my driving life, the best policy for me was always going to be the cheapest and so I chose to go with the insurer at the top of the page, which happened to be Admiral. I clicked to go over to Admiral’s website to complete my purchase of car insurance. Once I had selected any extras I needed, such as breakdown cover and cover for legal expenses, I clicked through to complete payment for my policy. I had to, at this stage, make an initial payment, a deposit if you like. This amount was around twice as much as I would be paying on a month to month basis. I then had to agree to make 10 more payments towards my cover in monthly installments throughout the year.

How did paying monthly affect my budget?

Finding money to pay for something new every month is difficult for most people, and it certainly was in my case. I did have to look at my budget and make some sacrifices to be able to afford my car insurance. Having said that, I did appreciate not having to find the money up-front. I had prior warning of just how much money I needed to find each month and I could plan my finances accordingly without having to worry about finding enough cash to be able to pay a lump sum amount for the year. I did enjoy that last month of the year as well, where there was no payment because my policy was paid for in 11 months.

Did the policy cost more in the long run?

Yes, the policy did cost more, I estimate about 10% more than it would have had I selected an annual policy. I believe this is because the insurer treated my premium as they would a loan and applied interest. I feel, however, that the convenience of being able to budget on a month to month basis and the reduction of stress in having to find the money for the policy up-front made this extra cost justifiable.

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