If you spread the payment of your car insurance by paying by direct debit, watch out! Some motorists are being charged as much as 40% interest by their insurers for the facility. The impact will be felt most by those with the highest premiums and the lowest incomes – typically the younger driver.

Research shows that many car insurers are routinely charging an APR of around 25% whilst some go up to 39.4%

Let’s name and shame the worst first – it’s the Green Insurance Company, charging more that 38 times more than the bank of England’s base rate, the massive 39.4%. That’s followed by that champion of cheap groceries, but it would seen not insurance, Asda. They are charging an APR of 28.6%. Virgin and Budget both charge 25.9% followed by Privilege and Churchill at just over 24%.

If you want to have interest free credit then have a look at Saga and Age Concern but the odds are you’ll find that their premiums are uncompetitive.

Insurers do not usually display their APR’s for their credit facilities until you receive their formal quote. And sometimes you have to scrutinise the difference between the annual and the monthly premiums to discover how much in pounds and pence, it’s all going to cost you.