Apparently more than half of us pay for our insurance by monthly instalments. If you do, then beware: according to the Financial Conduct Authority (FCA), insurance companies are not being clear about how much more this will cost.
According to reports, there’s just not enough detail if you buy insurance online about the difference in cost between paying monthly or yearly. Not only does this mean you may end up paying more than you expect: it also makes comparing products very difficult.
The review by the FCA looked at 13 insurers and 30 intermediaries, including four price comparison sites which of course market themselves on offering the best deals. Apparently 19 out of the 43 websites did not provide ‘clear and consistent’ information on the full cost of paying by instalments, and some didn’t even state that choosing to pay in this way would cost more. Twenty six firms didn’t display the interest rate charged, while some don’t show the APR and the eventual total sum of payments.
An FCA spokesperson has been quoted as saying: “Regardless of whether people choose to pay upfront or in instalments, it’s important that they can see exactly what they are signing up for and how much it costs, so they can decide whether they are getting a fair deal”.
So better, clearer information is needed: simples!