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Paying monthly for a car insurance policy (get more details here)  is a very popular option, since many people simply cannot, or do not wish to, pay for a large premium in advance. It may help with budgeting, but there are disadvantages.

Do car insurance companies accept monthly payments?

Most of them do. However they can be selective. If you have a poor accident record, one or more motoring convictions, live in a postcode with a high level of claims, or are young and inexperienced driver you may not actually be turned down for monthly payments, but it is likely that you will either be asked to pay a large deposit, or you may find the interest rate increased.

Some insurers, however, don't accept monthly payments at all and insist on full payment of the premium right at the start. Unfortunately these companies tend to be those who offer the best value cover; particularly to older and more experienced drivers.

Can young drivers pay monthly for car insurance?

Yes they can, subject to certain conditions, and the majority of motorists under the age of 24 do, in fact, pay for their policies in this way. This is hardly surprising since a premium for a younger driver can easily be well into four figures. Again, though, they may be charged extra interest.

Is it possible to pay monthly with no interest?

Sometimes individual insurers may offer special no interest deals. However these almost invariably only last for the first 12 months. If you continue with a monthly paid policy at renewal time you will probably find that their usual service or interest charges will be applied.

Can I pay monthly with bad credit?

This will be up to each individual insurer to decide. A lot depends upon just how bad a credit rating is. They may increase the initial deposit, or the interest charge, or both. It is vital however that if a policy is taken out with the premium paid by agreed instalments, that these payments are stuck to firmly. If a payment is missed it is possible that cover could be withdrawn and this could have very severe consequences. It could not only mean the possibility of the motorist driving without insurance, but also facing the possibility of severe difficulties in finding insurance in the future.

Is it possible to drive uninsured?

The penalties for driving without insurance are considerable. Firstly, it is likely that the car that the uninsured person was driving would be impounded. This would mean having to get it insured before it could be released, and since the vast majority of policies specifically exclude cover for impounded vehicles, a specialist policy would have to be bought and these can be very expensive indeed. Failing to get a car out of a police pound within a couple of weeks of it being seized can, and usually does, result in the vehicle being confiscated completely and then either sold or crushed for scrap.

To sum up:

Anyone who can afford to do so should buy car insurance in the normal way, by paying for the policy in advance. This not only saves interest and other charges, but also means that, since some of the best insurers do not offer monthly payments, there would be a wider choice of policies to choose from.

Paying monthly may be a necessity for many drivers on a tight budget, but if at all possible it should be avoided.

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