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Many car and home insurers still charging over 25% APR to pay monthly
The insurers charging more than credit card lenders
Dean is an award-winning personal finance writer who’s spent over 15 years helping consumers navigate the tangled and fascinating world of insurance.
Around 23m car and home insurance policies are paid for monthly, according to figures from the Financial Conduct Authority (FCA).
In 2024, we started tracking insurers' interest rates for paying in instalments, and concluded they were unfair to lots of customers.
Two years on, many providers have cut their rates, likely reflecting regulatory scrutiny and our campaigning. While that's a positive step, steep rates remain common, particularly for car insurance.
Here, we explain how premium finance works and what's changed since we began examining insurers' rates. You can also see how scores of providers compare in our most recent survey results.
How much does your insurer charge?
See the table below to see what your provider charges.
Car insurance APRs
| Clegg Gifford Insurance Brokers | 29.90% |
| Dial Direct | 29.90% |
| Hughes | 29.90% |
| iGO4 | 29.90% |
| Lancaster | 29.90% |
| nutshell | 29.90% |
| The Insurance Factory | 29.90% |
| Wise Driving | 29.90% |
| zenith insurance | 29.90% |
| The Co-operative Insurance | 29.89% |
| Budget | 28.90% |
| Autonet | 28.40% |
| BeWiser | 28.40% |
| Carole Nash | 28.40% |
| Policy Expert* | New customers 27%; renewing customers 29.9% |
| Geoffrey insurance | 26.90% |
| Swinton | 26.90% |
| Santander | 25.50% |
| John Lewis | 23.50% |
| Hastings Direct | 22.80% |
| InsurePink | 22.80% |
| People's Choice | 22.80% |
| Darwin | 22.5% (new business); 20.3% (renewals) |
| 1st Central | 19.5%-25% |
| Tesco | 21.40% |
| Ageas | 19.90% |
| Churchill | 19.90% |
| Direct Line | 19.90% |
| M&S Bank | 19.90% |
| Privilege | 19.90% |
| RIAS | 19.90% |
| Allianz | 17.5% (renewing)-19.1% (new business) |
| LV | 17.5% (renewing)-19.1% (new business) |
| AXA | 16.10% |
| Swiftcover | 16.10% |
| Bank of Scotland | 15.90% |
| Halifax | 15.90% |
| Lloyds Bank | 15.90% |
| Admiral | c15.5% |
| Bell | c15.5% |
| Diamond | c15.5% |
| Elephant | c15.5% |
| Aviva | 15% (average) - 19% (max) |
| General Accident | 15% (average) - 19% (max) |
| Quotemehappy.com | 15% (average) - 19% (max) |
| Marmalade | 0-29.9% |
| Hiscox | no charge |
| NFU Mutual | no charge |
| AA | no response |
| Arkwright | no response |
| Covea | no response |
| CoverSure | no response |
| esure | didn't disclose |
| First Alternative | didn't disclose |
| GoSkippy | no response |
| Marshmallow | no response |
| OneSure | no response |
| Post Office | no response |
| RAC | no response |
| Saga | no response |
| Sheilas' Wheels | didn't disclose |
In February and March 2026, we surveyed 61 car insurance firms and 50 home insurance firms, and asked them what APRs apply to customers paying in monthly instalments. In most cases, one figure was provided, while some insurers provided a range. Some providers either didn't respond to our survey ('no response') or declined to tell us their rate ('didn't disclose').
*Policy Expert Since responding to our survey in March, Policy Expert has reduced its rates to 24.9% APR – both for car insurance and home insurance.
Why paying monthly can cost more
If you need to drive or have a mortgage, car and home insurance aren't optional. But for many people, paying the full premium upfront isn't affordable. FCA data suggests this is one reason why around half of customers pay monthly for their car or home cover.
In most cases, paying in instalments is technically a credit arrangement where the insurer loans the customer the annual premium, which they then repay over the year. This is known as 'premium finance'.
Different providers charge different interest rates. In our most recent survey, APRs ranged from 0% to nearly 30%.
Where rates were charged, the average car insurance rate was 23%, while for home insurance it was 21%. This makes them broadly comparable to credit card rates. At the end of April, the median and most common credit card APR was 24.90%.
- Find out more: best car insurance providers 2026.
Why we think 25% APR is unfair
Like other lenders, insurers face costs when providing finance, including administration costs and losses when customers fail to repay. However, unlike a credit card provider or bank offering a loan, insurers are unlikely to lose the full annual premium if a customer defaults because they can cancel the policy.
However, as our table shows, 20 out of 48 car insurers disclose their rates charge 25% APR or more. Among home insurers, seven out of 38 charge at least this much.
At the same time, two car insurers (Hiscox and NFU Mutual) and almost half (15 out of 38) of home insurance providers can offer monthly finance interest-free.
We've long been concerned that many customers have been receiving poor value for an essential product – often when already struggling with cost.
- Find out more: best home insurance providers 2026.
How interest rates have changed
We've campaigned for better value for insurance customers for over two years.
During this time, we've surveyed the market four times to determine what rates insurance firms are charging customers who pay monthly.
The FCA has also carried out a market study into premium finance. It found that some firms, particularly brokers, were earning substantial profits from premium finance. However, it concluded that wider intervention wasn't needed because average APRs had fallen over recent years, and it had already intervened directly with 10 firms charging high rates. Four of those firms reduced their rates.
We've also seen many providers reduce their rates since we began tracking them, with the average among firms surveyed in both April 2024 and 2026 down by around five percentage points, on average.
Nonetheless, we're not convinced that the FCA's light-touch approach will secure fair value for the millions of customers who need to pay for their cover monthly.
'The FCA must take further action'
Rocio Concha, director of policy and advocacy at Which?, says:
'Millions of motorists rely on monthly payments to afford essential car insurance cover, yet many are still being charged interest rates comparable to an expensive credit card.
'While some of the worst offenders have reduced their rates following regulatory scrutiny, the FCA’s weak approach appears to have been taken as a green light by the industry to keep charging extortionate rates. This means those who can least afford it are still paying significantly more simply because they can't pay upfront.
'The FCA must take further action to drive down rates across the market and ensure all consumers receive fair value.'
- Find out more: Read more about our insurance campaign.
