New research from Premium Credit revealed that increasing numbers of consumers are using credit to pay for insurance, with nearly half valuing the option to spread costs monthly.
The firm’s latest Insurance Index revealed that 28% of adults are now more accepting of using credit for insurance than a year ago, continuing a multi-year upward trend.
The findings showed that 46% of customers valued paying monthly for insurance, and 18% did so for all their policies.
Among those opting for instalments, 49% said it helps with budgeting and 30% said it improves cashflow.
The shift comes as many households face financial strain.
Around 27% of adults expected their ability to pay bills to deteriorate over the next year, while 49% were concerned that rising personal tax bills will affect their standard of living.
The index also reported behavioural changes across key insurance lines.
In the past 12 months, 14% of motor customers and 9% of home insurance customers switched to monthly payments, primarily due to affordability pressures.
Overall, 56% of respondents said credit helps them manage their money, with 38% citing the rising cost of living and 21% pointing to higher insurance premiums.
Jon Howells, chief commercial officer at Premium Credit, said: “The growing acceptance of paying for insurance with credit is firmly established and it goes hand in hand with the numbers of people valuing the ability to pay monthly for cover.
“Insurance customers are switching to using credit mainly as it aligns payments to money coming in and helps with budgeting given other cost of living pressures they face.
“Whether premiums are going up or down, and we are seeing a decrease with car insurance premiums currently, it is the ability to use premium finance to manage payments on a regular basis that consumers find helpful.
“When compared to other forms of credit such as credit cards or overdrafts premium finance continues to be competitively priced and helps customers manage their money.”
