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Can You Afford To Pay Annually For Your Cover?

December 20, 2018 by Logan Biggs

If you run your own motor trade business such as a motor trader or perhaps a mechanic or car body repair shop then you will no doubt have suitable motor trade insurance in place to provide you with suitable protection in the event of something untoward happening. This could be say a road traffic accident, a customer injuring themselves on your business premises or someone breaking into your factory and stealing your tools.

A large percentage of businesses no doubt spread the cost of paying for the cover over a 12 month period but if they could have paid for the cover all in one go at the time of taking out the policy they may have been able to save themselves some money. Why is this?

Well, a lot of insurers charge interest when you pay monthly for the cover as, to all intents and purposes, you are borrowing the money from them. The interest payment can be a significant sum of money.

As an example, if the annual premium is say £1,000 and the insurance company charge you let’s assume an interest rate of 19.9% if you choose to pay monthly, then you will be charged almost £200 per annum more for obtaining the motor trade insurance policy. That money would have been better being retained in the business to be used for some other purpose such as to buy additional supplies.

Obviously, many new business start ups are stretched for cash in the early days and therefore may not be able to take advantage of paying annually and must resort to paying monthly. However, as the business grows, it may be better placed to pay annually and save some money.

If you are looking for motor trade insurance either for the first time or your existing cover is shortly due to be reviewed then why not get in touch with us and we will help obtain a competitive quote.  



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