Author Topic: British drivers paying 20% more on insurance for no good reason  (Read 551 times)

Paul der Krake

  • Magnum Stache
  • ******
  • Posts: 3524
  • Age: 9
  • Location: WA
British drivers paying 20% more on insurance for no good reason
« on: October 09, 2017, 07:16:36 PM »
http://www.bbc.com/news/business-41551810

Excerpt of choice:

Quote
Another comparison website, GoCompare, found that one "typical" annual car insurance premium of 498 turned into a total cost of 597 when paid monthly. It suggested that 38% of drivers paid for their car insurance by monthly instalments.

Georgie Frost, head of consumer affairs at GoCompare, said: "When you pay monthly, you are not really paying for your insurance, you are paying back a loan that comes with interest charges.

"Not only will you pay more because of that credit, but our research shows that you are less likely to switch in future if you pay monthly, and that could end up costing you even more each year."




cerat0n1a

  • Pencil Stache
  • ****
  • Posts: 757
  • Location: Cambridge, UK
Re: British drivers paying 20% more on insurance for no good reason
« Reply #1 on: October 10, 2017, 02:47:29 AM »
I'm slightly sceptical about stories like that which come from the press department of companies which are basically middlemen for car insurers.

Find it hard to believe that 838 is really the average. Our insurance is under 250! Anyone like to admit to paying more than 838 for their car insurance?

UKMustache

  • Stubble
  • **
  • Posts: 144
Re: British drivers paying 20% more on insurance for no good reason
« Reply #2 on: October 10, 2017, 06:04:24 AM »
I'm slightly sceptical about stories like that which come from the press department of companies which are basically middlemen for car insurers.

Find it hard to believe that 838 is really the average. Our insurance is under 250! Anyone like to admit to paying more than 838 for their car insurance?

It's skewed by new drivers, when my wife first got her licence it was 2k for a 15 year old ford KA.

dogboyslim

  • Bristles
  • ***
  • Posts: 266
Re: British drivers paying 20% more on insurance for no good reason
« Reply #3 on: October 13, 2017, 11:52:23 AM »
I work with insurance in the US.  Retention on monthly pay is significantly better and has been for every company I've worked with.  Also, monthly pay customers often pay more for insurance.  The insurance company makes money by holding the premium cash between purchase and claim payment and keeping the returns.  This is more or less a leveraged investment purchase.  If you pay monthly, the company will make you pay more.  This is most often done by providing a pay-in-full discount, but some companies also add transaction fees per payment and other misc. fees.

I have no context to say if the amount listed is a reasonable average, but as the other poster mentioned, new drivers or high risk drivers will certainly pay very large premiums that will tend to skew the average higher than the median.

cerat0n1a

  • Pencil Stache
  • ****
  • Posts: 757
  • Location: Cambridge, UK
Re: British drivers paying 20% more on insurance for no good reason
« Reply #4 on: October 13, 2017, 02:57:03 PM »
It's skewed by new drivers, when my wife first got her licence it was 2k for a 15 year old ford KA.

Yeah, having declined to insure my teenage sons for that reason, I know that young people and new drivers pay a lot more. Still, I imagine your wife wasn't paying 2k in her second year of driving?

There's 45.5 million UK driving licence holders and fewer than 200k pass the test each year, so I don't think young/new drivers alone can push the average up that much. Maybe it's all those expensive luxury German cars?