Paying your car insurance premium over several months - good budget planning or a waste of money?

Car insurance should be cheap compared to what it would have been if the Internet had never been created. Price comparison sites have completely disrupted the market, leaving many insurers scratching to make a profit on the policies they sold. However, factors such as Insurance Premium Tax, widespead fraud and our compensation culture have all forced up premiums, making it even more necessary for customers to shop around for the best rates.

Several years after we first pointed it out, the news media has realised the fact that (a) those motorists that renew their policicies year after year are subsidising those who compare prices automatically, and (b) paying monthly, whilst often more convenient, is usually more expensive in the long term.

Experiences differ, however. For example, a student who can just about make ends meet, and who simply can't afford to pay many hundreds, or even several thousands, of pounds for insurance may have a low credit score. This motorist faces a double whammy of higher charges for making regular payments for cover, as well as huge premiums. On the other hand, someone who is older and more comfortably-off, with good driving and credit records, but limited savings, may find a combination of much cheaper premiums and easier financing terms much more easy to afford. For this person, spreading the cost of a policy over a longer period may be better for the budget.

So, are monthly payments still better for you?

That depends on your own situation. We have tried to help by asking people for their own experiences in buying their policies in this way, and the results are below.

My student days      Insuring my Vauxhall Polo     Insuring multiple cars      Price comparisons for my Ford Focus    Getting Quotes For my Vauxhall Astra Hatchback     Getting a quote for my Toyota Hilux Pickup Van

Care to tell us about your experiences? Then please with your comments.