No deposit car insurance companies, and how they can help you.
Car insurance is in the news again. Scarcely a day goes by without big headlines appearing in the newspapers about further losses suffered by insurance companies, yet another outrageous compensation claim being allowed by the courts, yet more increases in car insurance fraud. Since all this is paid for ultimately by the policyholders, it is hardly surprising that many of those are starting to stagger a little under the weight of our car insurance premiums.
Insurance companies are run by hardheaded businessmen these days so it is hardly surprising that a number of them have decided to capitalise on the fact that so many people are having problems paying their insurance bills by bringing out no deposit car insurance schemes. Under one of these schemes an insurance premium is worked out and then it is divided by 12, and that sum becomes the monthly repayment which is paid either by credit card or direct debit. The first payment is then made by credit card, which means that the client does not have to find any deposit whatsoever at the time of taking out the policy.
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It sounds very simple and
sensible but there are drawbacks. The first and perhaps obvious one
is that although no payment has to be made in the first month by the
buyer (the deposit having been paid by the credit card company) he
or she will have to pay that first payment eventually, as well as
the normal monthly payment. The other drawback is that, not
unreasonably, insurance companies charge more for this type of
policy because of the extra risk that they run. It is an unpleasant
fact that more often than not the people who can least afford to pay
have to pay the most so if it is at all possible a no deposit policy
should be avoided. By paying in a conventional manner not only are
the additional credit charges avoided, but it is also sometimes
possible to negotiate considerable discounts.
Copyright 2010 John Maxwell