Drivers could save nearly £60 a year by paying for car insurance up front

Motorists could save up to £59 on car insurance by paying for it in a single lump sum rather than via monthly instalments.

New data from Comparethemarket shows that while paying for a whole year of insurance in a single payment will cost £693 on average, opting for 12 monthly payments will see this rise to £752.

It follows a similar trend in 2021, where the difference between paying monthly and annually was £59 on average. Between January and December 2021, drivers would pay £699 on average via monthly payments, whereas those paying in full would see total premiums of £640.

Those opting for monthly payments incur a premium as a result of the benefit of having insurance broken down into more manageable sections, as well as the additional fees incurred by the insurer who may have to run a soft credit check. Most insurance providers will require an initial deposit – usually, 20 per cent of the annual amount – with interest then added onto the remaining 11 payments.

Alex Hasty, director at comparethemarket.com, said: “As living costs and bills continue to rise, many families across the UK are feeling financially squeezed. Saving on your car insurance is always attractive, considering that the average cost of car insurance is nearly £700. Although it might seem easier to make smaller monthly payments, if you’re in a financial position to be able to pay your car insurance policy annually, it could lead to helpful savings of around £60.”

When it comes to home insurance the difference between monthly and one-off payments is less apparent, with comparethemarket stating that the difference comes in at £13.