The Newshound

Car insurers charging struggling drivers up to £370 extra just to pay monthly, Which? investigation finds

Some providers charge APRs above 50 per cent — higher than most credit cards — with around 15 million UK drivers relying on monthly payment plans because they cannot afford annual lump sums.
Some providers charge APRs above 50 per cent — higher than most credit cards — with around 15 million UK drivers relying on monthly payment plans because they cannot afford annual lump sums.

Consumer group Which? has exposed a two-tier car insurance system that forces the poorest drivers to pay the most, with monthly instalment rates hitting 53% APR — higher than most credit cards. Around 15 million Britons use premium finance to spread car insurance costs, and Which? is now demanding a ban on the practice before the Budget. Rocio Concha of Which? warned too many drivers have already been "pushed out of driving or into financial peril."

Which? mystery-shopped 30 insurers using a 42-year-old Sheffield driver with a clean record and found a median APR of 26.2%, with some quotes exceeding 50%.

James Daley of Fairer Finance said: 'It can't be right that the poorest people in our society are forced to pay the most for their car insurance.'

Labour is being urged to use the Budget to scrap the so-called 'poverty premium', which campaigners say punishes drivers who simply cannot afford to pay annually upfront.

MoreGB NewsCar insurance: Labour urged to scrap 'poverty premiums' in Budget as drivers risk paying £370 extraAOL News UKCar insurers blasted for extra charges as 'poorest pay most'Evening StandardWhich? calls for ban on charging extra for pay monthly motor insuranceEconostrum (English)Car insurance under fire as millions of drivers face extra costs just for paying monthlyWhich?Which? calls for an end to unfair charges for paying monthly for car insurance - Which?
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