Interest On Car Insurance Payments

EDM number 1086 in 2003-04, proposed by Harry Barnes on 29/04/2004.

That this House notes with concern that car insurance companies generally and routinely charge interest of up to 20 per cent. to those who pay their insurance by monthly instalments, although the payment is for a service that is not provided in advance and which does not represent a loan; believes that this sharp practice is entirely different from utility and other organisations which take payments for services provided on a monthly or quarterly basis; notes new research conducted by www.confused.com, which shows that one in every two drivers pays over the odds for car insurance because they choose to pay by instalment rather than by one lump sum and that this can add up to 20 per cent., or tens to hundreds of pounds, to their annual insurance bill, although they could dramatically cut the cost of their annual insurance bill by taking out a low rate APR loan from sources other than their insurer or broker to cover the cost of the lump sum; calls upon the car insurance industry to desist from this unnecessary practice of charging interest to those paying by instalments, which tends to confirm the popular perception that they are seeking to make huge profits at the expense of the consumers because they believe that they can get away with it; and urges the Government to investigate this abuse with a view to persuading the industry to abandon it.

This motion has been signed by a total of 36 MPs, 1 of these signatures have been withdrawn.