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Whether your van is for personal or business use, van insurance is a necessary expense. Paying less upfront for insurance may sound like an attractive option, but there are certain costs to doing so. If you want to avoid paying a deposit, you may want to consider paying an annual premium on your van insurance.
No deposit van insurance is any policy that does not require you to pay anything upfront when taking out the policy. However, in reality, there is no way to avoid paying nothing when you first take out insurance, even if you’re not technically paying a deposit.
While in the past you would pay for insurance on a yearly basis, insurers nowadays are willing to let you make monthly premium payments. This may make it easier for you to cover the cost of insurance, but you’ll generally be charged interest to do so, meaning you’ll end up paying more for insurance over the course of the year. If you choose to make monthly payments, many providers will also require that you pay an upfront deposit of around 20% of your annual premium.
That means that the only way to get no deposit van insurance would to be pay your entire annual premium upfront.
When it comes to paying for van insurance, choosing a policy with no deposit is not necessarily the best way to get a better deal. Choosing to pay a one-off annual premium means you’ll not pay any interest on your insurance and won’t need to pay a deposit. However, it will require you to be able to make a large upfront payment, which may be difficult.
By choosing a policy with monthly premiums, you’ll pay less upfront, but will generally end up paying more over the course of the year, due to interest. You may also be required to pay an initial deposit, along with your first month’s premium. While you’re likely to save money by paying for your van insurance annually, this may not be feasible for some people and may cause others issues when it comes to managing your day-to-day finances.
|Deposit||Interest charges||Upfront cost|
|Annual premium||No||No||Entire annual policy cost|
|Monthly premium||On some policies||Yes, on most policies||First month’s premium (and potential deposit)|
There are a number of things you can do to reduce the cost of van insurance, regardless of whether you choose to pay monthly or annual premiums. These include:
Finding van insurance with a low deposit can help keep your upfront costs down, but may not be the cheapest option over the long term.
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