Car insurance without a deposit

So there you are sat eating your rice crispies on a sunny morning, with the daily paper on your lap, and there is a thump on the doormat as the post arrives (in that case it must by now be late afternoon, but you get the gist) and, happy days, your car insurance renewal letter has arrived to inform you that you practically need to sell your house in order to pay for your next 12 months insurance cover! Fair enough, you're not the only person in the world in this situation, but knowing that doesn't help when your bank balance is hovering dangerously above zero and the price of everything from carrots to Chardonnay has yet again gone through the roof at your local Tesco's.

Thanks to the enlightened laws in this country you have no option but to pay up, but using what? The answer is no deposit car insurance.

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It cannot have escaped anyone's attention that there is a commercial war going on in the car insurance market with insurers spending vast sums on television advertising, cut-price promotions and all sorts of sales gimmicks in order to grab your business. It has to be borne in mind that once someone has become a customer of an insurance company it is far more likely that that person will buy more insurance products from that same company in the future, and therefore it is common sense for the insurers to be a little more lenient than they otherwise would be in order to get you on board as a client. One method which has become very popular indeed over the last couple of years is offering no deposit cover. What they do, is to split the premium up into 12 equal payments, add (here's the unpleasantly bit) any administrative charges they feel they can justify and then the first payment is made immediately by credit card. Hang on, you may well say! I thought this was no deposit car insurance! Well, it may not be a literal definition, but it is in practice; because you will not have to pay that deposit for at the very least a month and quite possibly for considerably longer. The deposit is, in effect, paid to your insurer by your credit card company and it has to be borne in mind that it is a legal requirement that a deposit is paid, otherwise an insurance contract is null and void and in the event of you having an accident your insurer would be completely within its rights to refuse to pay your claim.

Do bear in mind of course that next month you will have not only a credit card bill for your first payment, but also your second payment will be due, so make sure you budget with this in mind.

So there we have it. Your car insurance is sorted for another 12 months, during which time you will be to ensure your rice crispies every morning until another year hence when yet another huge bill is likely to drop through your letterbox; but let's not worry about that, a year is a long long time.