How to buy car insurance without paying a deposit

Monthly Car Insurance

According to reports, something like 5% of all the motorists on British roads are driving without any car insurance whatsoever. Furthermore, it appears that the vast majority of them are under the age of 25. Could this have something to do with the fact that this particular age group suffer from the highest car insurance costs of all?

This is not something to blame the insurance companies for, because the hard and unpalatable fact is that the under 25 is are responsible for a very high proportion of accidents on the roads. Partly this is due to inexperience, but much of it is because of overconfidence and, in the case of the males, testosterone induced recklessness. It's a very reasonable comment to say that if car insurance was only granted to people between the ages of 25 and 65, average premiums would fall considerably.

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Along with the increase in the cost of insurance policies over the last few years have been a growth in the number of people who are obliged to pay monthly, rather than pay in advance, as has been the norm in previous years. This is hardly surprising, since insurance rates have risen for all risk categories at a rate well in front of inflation. There are many reasons for this but the main ones cited by the insurance companies are an increase in fraudulent claims, and the compensation culture. It may come as a surprise to learn that far from feathering their own nests, most car insurance companies are actually running at a loss on this type of business, which indicates that further price increases will be necessary in the future if they are to at least balance their books.

This brings us back to the necessity for so many people to pay their fees monthly. This was completely unheard-of several years ago, but market conditions have forced it upon the insurance companies, because they either accept monthly payments or the client goes elsewhere. Many of them have tried to make up for the shortfall by charging interest, or placing management charges, on the people who pay monthly, but this is a very competitive market indeed in which price is the greatest motivator, which has led to a price war between many insurers. The result may be a good thing for insurance buyers in the short term, whether this will be a good thing in the long-term remains to be seen.

We are seeing price resistance amongst motorists; fuel prices in particular are driving down the miles that we drive, and now higher insurance costs and making many people question whether they really need to run their cars or not. Already, short term car insurance has become a major seller as people seek to minimise the use of their cars and rely upon foot, bicycle or public transport for the majority of their transport requirements. Perhaps we will see an even greater increase in the number of people buying monthly car insurance in the future.