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Single payment insurance? Watch

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    Really confused about what I will be paying for this car insurance? I'm going to ring up Diamond tomorrow to check but I was wondering if anyone could share some light on this?

    I went to Diamond.co.uk for a quote and at the end of it came up with:

    'Your single payment: £620.57
    Monthly installments from only £84.95'

    Does this mean if I want to pay the total cost in one go it's £620.57 or is that the deposit? Because £84.95 seems really cheap.
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    £620 for the year. Times £84 by 12 (months) and it will be more than £620. The one off payment is meant to be cheaper than paying in instalments
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    £620 is your payment for the entire year. Paying in one chunk is much cheaper than paying in installments. You will probably find that you will have to pay for 2 months as a deposit at the start of your cover so don't be surprised when the first month is more than you expect. Generally, if you have the money then pay your insurance in one go!
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    As others have said, apart from you usually pay a deposit, and then 10 monthly payments, so your last two months are 'free' (or actually you have paid it off). So yearly it is £620, monthly it is a say £170 deposit, and then 9/10 further payments of £85.
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    If you take out the insurance with a monthly payment what you are essentially doing is taking out a 12 month loan of the £620.57 with a rather high APR. In your case, it's about 103% APR. The vast majority of insurance companies have a ridiculous APR when you take it out monthly. The best options are the following:

    1) Take out a 0% for 12+ month credit card - then you can pay for the car insurance on the credit card, and you'll have an interest free alternative to paying off the £620.57 - so if you were to pay it each month you'd only pay £51.71 a month.

    2) If you're on good terms with your bank, get them to loan you the money instead - or use any loan company. At around £1,000 most loans won't be more than ~30% APR (at the absolute worst I'd say) and you'd pay about £50 interest in total.
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    Thanks for all your information guys, very helpful.

    (Original post by Noble.)
    If you take out the insurance with a monthly payment what you are essentially doing is taking out a 12 month loan of the £620.57 with a rather high APR. In your case, it's about 103% APR. The vast majority of insurance companies have a ridiculous APR when you take it out monthly. The best options are the following:

    1) Take out a 0% for 12+ month credit card - then you can pay for the car insurance on the credit card, and you'll have an interest free alternative to paying off the £620.57 - so if you were to pay it each month you'd only pay £51.71 a month.

    2) If you're on good terms with your bank, get them to loan you the money instead - or use any loan company. At around £1,000 most loans won't be more than ~30% APR (at the absolute worst I'd say) and you'd pay about £50 interest in total.
    This is such a good idea, but sadly I don't have the time to do that. I have to take the insurance out today really.
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    If you have online banking increase your overdraft on your account to the amount you need? The decision is usually instant and would probably still be cheaper than the APR the insurance company would charge you.
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    (Original post by ann13)
    £620 for the year. Times £84 by 12 (months) and it will be more than £620. The one off payment is meant to be cheaper than paying in instalments
    I agree.
    Id recommend the one off payment. As well as being the cheaper option, it means that you have paid it off and dont have to worry about paying it every month, as its already paid off.
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    I've found elephant/diamond/admiral who are all the same company basically offer good quotes if you pay in one go (sub £1000 at 18, 1yr ncb) but if you pay monthly you are crushed with interest, 18.6% APR or something silly.

    My renewal is in feb, quoted £940 with diamond in one go if I pay monthly I end up paying £1700 back which is a joke nearly double, borrow the money from someone or use an overdraft!
 
 
 
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