Car insurance firms slammed for charging 'poverty premium' to drivers who pay monthly

The consumer group Which? is calling for a ban on two-tier pricing for motor insurance to establish a fairer and more competitive system. Currently, drivers paying monthly face a poverty premium, as these arrangements act as credit agreements. Consequently, these customers are charged additional interest or administration fees for spreading the cost of their premiums. Which? argues that removing these extra charges for pay monthly motor insurance would benefit consumers and increase overall market competition.