Customers borrowing to fund insurance are feeling the strain
Many consumers who borrow money to pay for insurance policies are taking on extra jobs and selling their cars as they struggle to afford cover, new research from the UK’s leading premium finance company, Premium Credit, shows.
Premium Credit’s research shows 24% of those who have taken on more credit to pay for insurance over the past 12 months have struggled to afford policies in the past year.
Its Insurance Index study, which monitors insurance buying and how it is financed, shows 10% of people who have used credit to buy their insurance over the past 12 months have taken on extra jobs as a result, while 9% have sold their cars. That is three times more than the 3% who had sold cars when Premium Credit asked the same question in March last year.
Around 6% say they have had to have pets put down because they cannot afford veterinary treatment while 4% have driven their vehicle without insurance and 2% claim to have turned to crime to raise cash to fund insurance.
Others have cancelled or amended policies - around one in twenty (5%) of those who use credit to buy cover have cancelled or amended buildings insurance because they can’t afford the total cost of their insurance, and 7% have cancelled or amended home contents insurance.
Premium Credit is advising customers to consider premium finance which, for a small charge, enables them to pay monthly for cover instead of in a lump sum. Spreading payments in such a way can help ease cash flow challenges and make paying for vital insurance simpler.
Adam Morghem, Premium Credit’s Strategy & Brand Director said: “It is concerning that people are struggling to afford important insurance and having to resort to selling their cars and taking on extra jobs as a result.”
“Premium finance is specifically designed for insurance buyers. Using the right credit to maintain important insurance policies is sensible. Looking to spread the cost of an annual policy into more manageable monthly payments works for many consumers and businesses.”
Authored by Premium Credit
About Premium Credit
We are the leading provider of premium finance in the UK and Ireland, and the only company endorsed by BIBA.
We are authorised and regulated by the Financial Conduct Authority, and work with over 3,000 producers of all sizes. We serve over 2.1 million customers, process 24 million direct debits and receive advances of £3.5 billion.
For over 30 years, we’ve led the market through thought leadership, innovation and technology and have helped our partners offer finance compliantly to their customers through face-to-face, telephony and online channels.
We continue to invest to ensure we provide a quality service and support that helps you grow your business and commission. From the delivery of a seamless customer journey, which includes real time decisioning for financing and 24/7 account servicing, to consultation that improves the offer of finance to customers, we are committed to growing the premium finance market.
Our Specialist Lending division also provides finance to pay other annual costs, such as professional fees, membership subscriptions, commercial service charges, golf clubs and school fees.