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    Do you pay for car insurance in advance?

When you buy car insurance you have to pay something up front. This only has to be a fairly small sum of money though, and there are ways you can cut the cost of your insurance to keep it within your budget.

How much would I have to pay upfront for a car insurance policy?

This varies from one insurer to another. If you visit this crazy car insurance website you can get an idea of car insurance costs. Some will ask for as little as a 12th of the premium; some 20 percent or more; and there are those that will not accept monthly payments at all, at least from new customers.

How do I find the lowest possible deposits?

You need to compare prices; the better comparison sites will not only show you the cheapest prices but they will also show you those companies that will accept payments over 12 months, with low sums payable upfront.

Does it cost more to pay monthly?

In most cases, yes. A good comparison site will show you the total amount payable if you buy your insurance in this way, as well as the premium that you would have to pay if you settle this all in one lump sum at the beginning. Throughout last year the average extra payment for those making monthly payments was around 11 percent, although this can vary considerably.

Can I cancel a monthly paid policy at any time?

You can cancel any car insurance policy whenever you wish. However there are almost invariably cancellation charges. You may find that, if you have only had a policy in place for a fairly short time, there could be a substantial sum that you would still be liable for.

Do I have to take out a loan if I pay monthly?

Yes. In effect you are borrowing the premium from the insurer. Sometimes they advance you the money themselves, sometimes it is provided by a separate finance company. Either way, you would in effect be entering into a credit agreement.

Are there any disadvantages to buying a low – deposit policy?

Some insurers will not accept this type of business at all. Unfortunately some of the most competitive insurers, such as LV, will only accept clients who pay in full in advance. This means that you would not be able to buy one of their policies, and perhaps miss out on a bargain price.

How can I buy insurance if I have no money?

Some motorists have used interest-free credit cards to buy their insurance. This means that they have avoided both the interest charges that the insurers heap on, and they have been able to choose from which ever insurance company they wished to deal with, including those that insisted on full up front payment. This has helped many drivers save a great deal of money.

Is there a snag to buying insurance in this way?

It is important that you pay off the credit card debt within the interest – free period, otherwise you may find yourself facing substantial charges from the card company.

So is there no such thing as no–deposit car insurance?

No insurer will issue a policy to a new customer without at least something upfront. However this does not necessarily have to be a large sum. Plus, if you cannot afford to pay a small initial deposit, you would have to wonder whether or not you could afford to keep up the monthly payments. Failing to do so could invalidate your cover and leave you open to possibly driving without insurance.

So don't forget: look for crazy car insurance prices now!