Beware monthly car insurance premium hike trap

A cost comparison across 13 different car insurance providers has highlighted that only one, Real Insurance, did not increase their premiums for monthly payments.

The independent cost comparison covers three different quotes and shows that, on average, Australian consumers are paying nine percent more by opting for monthly premiums with all other car insurance providers on the market.

The cost comparison shows that the increase on premiums if paid monthly can range anywhere from one to 17 percent depending on the insurance provider.

Some of the firsts the Awards took into account when evaluating Real Pay As You Drive Insurance include:

Said a Real Insurance spokesperson: “With the monthly household budgets of the average punter already stretched, there is no reason why car insurance premiums should go up because someone opts to pay monthly.

“We recognize this and for this reason have always kept our monthly premiums the same pro rata as our annual premiums. Most people don’t have a lump sum to pay an annual premium for their car insurance and why should they be punished as a result.”

The independent cost comparison took into account three different customer profiles as well as a number of assumptions such as: The car was owned for longer than a year; there were no extras or extra security added to the car; there was no secondary driver under 25, and; there were no other registered vehicles in the person’s name.

The three fictitious car owners, two females and one male live across different suburbs in New South Wales. The range in age from 45 to 52, all garage their cars, all want comprehensive insurance, none had prior convictions and all wanted an excess of $600. Their cars included a 2003 Ford Focus, 2002 Subaru Outback and a 2002 Mitsubishi Lancer.

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