Admiral milks £40m out of motorists who pay monthly

ADMIRAl squeezed more than £40m out of customers who split their bills into monthly instalments during the first half of 2019.

like most of its rivals, the car insurer charges extra if a driver decides to spread the cost of their premium over a year instead paying a lump sum.

Critics claim the practice is unfair and means that struggling young motorists least able to afford a higher bill are forced to cough up.

Admiral earned £42m from this so-called instalment income in the first six months of the year, accounts show.

James Daley, of consumer group Fairer Finance, said: ‘It is bizarre that insurers charge more if you want to pay for a policy in monthly instalments, since you’re effectively insured day by day.

‘It can add an enormous amount to the cost of insurance, which is already prohibitively high for young drivers.

‘If you’re a young driver who has been offered a premium of several thousand pounds, you probably have no choice but to pay monthly.’

Admiral charges 20pc interest for customers who pay insurance bills monthly, as if they have taken out a loan.

For example, a typical 28-yearold living in Newport, south Wales, insuring a Mercedes C Class would pay £981 for a year’s cover up front, according to analysis for the Mail by comparison website Go Compare.

If the same driver wanted to split the cost, then they would be charged £98.81 a month or £1,102 for the year – £121 extra.

Admiral also raked in £110.3m from add-ons and fees.

Every time a motorist pays for extra support such as breakdown cover or legal insurance, it boosts the company’s profits.

Admiral made an overall firsthalf profit of £218m, up 4pc on a year earlier, and hiked its interim dividend by 5pc to 63p per share. The stock rose 4pc, or 83p, to 2115p.

The firm had no comment.