Bad Cars

A collection of complete lemons

Do you have to pay anything in advance for car insurance?

You have to pay at least something. A car insurance policy is a contract between yourself and the insurer; and for a contract to be valid you both have to benefit in some way. The insurance company benefits from receiving money from you, and you benefit from the indemnity against possible future claims against you that the policy provides.

How much will I have to pay upfront?

To find that out you need to compare quotes at a good no deposit car insurance website like this one that I can recommend. Just how much you have to pay will vary from one insurer to another. This will also depend upon your age and driving experience. Insurers prefer to have clients who are less likely to make claims, so they treat older and more experienced motorists better than they do younger ones. This means that young drivers usually have to pay at least 20 percent of their premium upfront, whereas older drivers, particularly those over 50 with a clean driving record, may be offered deposits as low as 8 1/2 percent.

Can I still pay monthly with bad credit?

Your credit rating will be taken into consideration. If you take out a policy and pay for it monthly, instead of settling the whole premium in advance, you are in effect taking out a loan. This may be provided by the insurance company itself, or a finance organisation that it has an arrangement with. A credit check will be made before this transaction can proceed, and if a poor credit record is revealed this loan may either be refused, a larger deposit may be required or the interest charges may be increased.

Can the premium be increased after I have had a quote on a price comparison site?

A quote isn't binding on either party. No contract exists between yourself and the insurance company until you have accepted a quotation and paid over your premium or a deposit.

In the company's terms and conditions (you should always be given a copy of these before making a commitment) it will stipulate that the cover is subject to you having given correct answers to all their queries on the application form. If you have made any errors they have the right to cancel your policy or even to refuse to pay out if you have a claim in the meanwhile. It is absolutely vital that you take care to make sure that everything you write on the application form is a hundred percent correct.

Will the insurance company know about every accident I have ever had?

Insurers share information between themselves about the accident and conviction records of their customers. They are are allowed to do this because it is written into their terms and conditions. Very few people read these of course!

What happens if I put incorrect information on an insurance proposal form?

If you make any statements on your application form which are incorrect your insurer is likely to find out, get back to you and either request an increased premium or cancel your policy. Having a policy cancelled is a very serious matter since every insurer will take this into consideration in the future in deciding whether or not to offer you cover, and at what price.

If I pay monthly, will I still get a no claims bonus?

Yes you will, provided that you have no accidents in the meanwhile. Your policy will be identical to one that you have paid for in advance, except that you have an obligation to continue the agreed payments in order to keep it alive.

Can I stop paying at any time and cancel the policy?

You will have contracted to pay the full premium over the agreed term. Whilst you have the right to cancel a policy at any time, and receive back any balance of payments that you have made in respect of cover for the future, the insurer also has the right to charge you a cancellation fee. Sometimes this can be a higher sum than your refund. If you are paying monthly you will probably have to pay something extra in order to get out of the agreement.

What will it cost me to cancel a policy?

Every insurer has it's own cancellation rules, and you should check their terms and conditions before buying a policy. These, by law, must be made easily available to you, and be written in plain English. Some insurers will charge as little as £25, but we have seen others that charge over £100.

If you do not read the terms and conditions, but you feel that their cancellation fees are excessively high, it is extremely unlikely that you will get much sympathy from either the company itself, or the regulators, since in order to take out a policy you will have to accept these terms and conditions.

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