... as insurers cash in with rip-off monthly payments

MOTORISTS whose finances have been hit by Covid are being penalised with rip-off car insurance charges.

An extra three million drivers are now paying monthly for their car cover because they cannot pay the premium in one lump sum.

But many do not realise that this is the most expensive way to pay as insurers charge an interest rate.

The difference between the average cost of a policy paid annually and monthly has more than doubled to £312 since January.

Younger drivers who typically pay higher premiums and those on tight budgets are among those most likely to be caught out.

Martyn James, of complaints dispute service Resolver, said: ‘The insurance industry has saved a huge amount of money this year in claims as we have been confined to our homes. Yet there is little sign of these savings being passed on to their customers.’

The number of drivers paying monthly for car insurance has increased by 9 per cent to almost half of all motorists.

With 31.6million cars on the road, this suggests 14.9million drivers paid monthly, up from 12million at the start of the year.

In January the average premium for those paying monthly was £997 and £854 for an annual fee, with a difference of £143.

But by October the average premiums were £1,095 and £783 respectively – an extra £312.

Trade body the Association of British Insurers said anyone struggling to pay for car cover should speak to their insurer.