Buying Car Insurance Without a Deposit
Is car insurance with nil, no, zero deposit really available? No, because an insurance policy without a deposit is unenforceable. HOWEVER it is possible to find policies with low deposits which can be paid by credit card, and you won't get the bill for that for more than a month. Therefore, you don't have to pay anything out of your own pocket right now.
Why should it even be necessary? Simple. Car insurance is diabolically expensive. It would not be so bad if premiums bore a fair relationship to the sums that insurance companies have to pay out in claims, but this is a fairly minor part of the total expenses now. What really makes a difference is insurance fraud – the British must have the weakest necks in the world, looking at the number of motorists claiming for whiplash injuries these days – and organised gangs are regularly causing accidents by braking hard at roundabouts, and then collecting multiple payouts from the insurance companies. The whole system is stirred up by lawyers and claims firms and according to the Association of British Insurers a full 10% of the premiums we pay end up in the hands of these people and around 50% of all claims are for whiplash claims, fraud and the associated costs. Add the £30 a year that uninsured drivers cost each and every one of us and it is easy to come to the conclusion that we live in a madhouse.
So, now that car insurance premiums have been pushed up to these dizzy heights hundreds of thousands of motorists simply cannot afford to pay the premiums all in one go, particularly those who are the worst affected, which are the younger drivers whose premiums have risen most of all.
A number of insurance companies have responded by offering "nil deposit" policies. The system is very simple; the basic premium is split into 12 payments, which are paid monthly by credit card. Sometimes the first payment (which can be paid by credit card) is one twelfth of the total premium, sometimes a little more. This means that motorists don't have too pay out anything at all from their own pockets initially since they only have to settle their credit card bill one or two months later. The problem of course is that the bill still has to be paid, and some insurance companies charge interest on the payments but it is possible to use a price comparison engine that can check a large number of insurers to find their best offers both for payment upfront and for monthly payments with nil deposit. Sometimes there are special offers by insurance companies who cut the extra charges or even give interest free payments; these only last for a short while and are difficult to find but again a good specialised price comparison engine can find them for you.
There is more to the cost of an insurance policy than just the basic premium. Some unscrupulous insurers charge very heavy fees for changing a policy, and very often this is unavoidable for motorists who may wish to change their car at some stage. Another heavy bone of contention can be cancellation fees; some people who are paying monthly are under the impression that they can cease their payments and cancel the policy without penalty, but this is almost inevitably incorrect, and buried somewhere within the terms and conditions there will probably be a hefty charge for those who do not complete the contracted payments. The moral to all this is; read the policy before buying it, and make absolutely certain that you understand all the payments that you are committing yourself to before going ahead.
It is hardly coincidental that just as car insurance costs have become more expensive than ever before, greater efforts are being put into catching uninsured drivers who face not only the possible loss of their driving licences but also having their cars crushed when they are inevitably caught by one or more of the high-tech systems that the police now have available.