General Insurance Article - The changing shape of monthly car insurance payments

 Motor insurance customers are paying less to spread the cost of their cover but fewer can do so at all.
 
 The latest Consumer Intelligence MarketView data shows the average cost of credit on monthly motor insurance payments fell from 10.6% in August 2024 to 9.7% in August 2025, continuing a year-on-year downward trend. Almost half of all active insurers reduced their instalment costs during this period.
 
 This fall reflects a wider shift in market behaviour. Several providers have withdrawn or adapted their instalment models, contributing to lower overall averages. At the same time, some insurers have introduced simpler ways to spread payments such as using flat monthly surcharges instead of traditional credit agreements which helps to make instalments more accessible and transparent. Together, these changes have helped make monthly payments more affordable for many customers.
 
 However, this positive movement on price comes with a note of caution. The proportion of insurers offering a monthly instalment alongside most of their annual quotes has dropped by 11 percentage points year-on-year, suggesting that fewer customers are being given the choice to spread payments.
 
 Meanwhile, the market has largely converged around a standard 11-month payment plan, now used by around three-quarters of insurers. This subtle shift affects how premiums are presented to consumers comparing policies by monthly cost.
 
 Michael Dingwall, Insight Analyst at Consumer Intelligence, said: “This is a story of balance. The market is working to make instalments fairer, but also tightening who gets access. Understanding that balance is key to maintaining trust and affordability in motor insurance.”