Right then can some one tell me if it is the “norm” for your insurance company to quote you say £400 for the year, then when you decide to pay monthly, this is out-sourced to a finance company.
Said finance company then pay your policy, and do it in the fashion of a “loan”, this then is subject to admin charges, and interest as its a loan, and by the end of the policy you have efectively paid 25% + interest (admin fees included to the final total) over the space of the year.
I cant quite get my head round this, am i being ripped off in a big way or is this indeed the “norm”?
What i have done is just pay the thing off in full, but this has resulted in a massive hole in my bank balance.
Oh and i was never informed that any of this was going to be taking place, all i was told is the cover will cost you £X end of story
It is normal for installments to be done through a loan unless you are paying for monthly insurance becasue on an annual policy you get a years cover from day one. But you should be quoted an APR at the outset and a total price including fees etc.
Thats exactly my beef, i wasnt made aware of any “hidden costs” and as far as i was concernd when i finished on the fone the price they told me was what i had to pay, that was until i got half a dozen letters saying i owe this that and tother to every man and his dog.
Get some advice from CAB or something. If you ar sold a loan without the law being followed to the letter you are on very strong grounds for not paying the extras.
Don’t see a problem here.
You were quoted £x for a year’s cover.
All well & good, that’s what you expected.
Then they say, if you want installments that is £y per month, where 12 times y comes to, say, 20% higher than your single premium.
Instalments is an option - if you don’t like it, don’t take it.
If you want to pay monthly, use a loan elsewhere if you can get it cheaper.
Insurance companies do insurance, lending money isn’t their core business, so they often parcel it out.
By the time you look at up-front expenses (admin, commission etc; ) and the risk of monthly payers stopping the policy early, they need to allow for the extra risk.
Best way to do is put on credit card then transfer lot to new credit card doing 0% transfers.
See it that once you’ve out the lot up front, you’re saving money for the rest of your life.
It’s all part of life…
Ian
ps I do work in insurance!
