The varying costs of car insurance can see consumers hit by a number of financial pitfalls. While many motorists will already be aware of a number of factors that can reduce the cost of a policy, such as raising deductibles or restricting mileage, many insurance companies apply a series of hidden costs that most consumers will not be aware of.
Credit ratings can have a particularly negative impact on insurance kids. If an insurer finds that a potential policyholder doesn’t make payments on time, a premium can increase to account for this. Making regular checks on your credit rating and having any settled items removed can actually help to bring down the costs of car insurance.
If a motorist doesn’t have enough financial acumen to pay off a policy in full, they will usually be able to make monthly payments as long as they have a respectable credit rating. However, many insurers will charge an interest fee for this privilege so it is usually prudent to find a company that applies a 0% rate to staggered payment plans.
Insurers use a scale running from 1 to 27 which provides a profile on the vehicle you drive. If a car is more susceptible to accidents, theft or criminal damage, hidden charges are applied when the policy is underwritten to account for the increased factor of risk.
Even cancelling a policy can leave motorists out of pocket. Some companies charge a cancellation fee which is hidden within the terms and conditions of a policy and if you choose to take your custom elsewhere, there’s a good chance you will be financially penalised because of it.