Consumer watchdog Which? is calling on the government to ban insurance providers from charging customers who pay their motor insurance on a monthly basis following a mystery shopping exercise that uncovered interest rates as high as 53%.

Which? estimates that around 15 million people use premium finance to pay monthly for their motor cover. Its investigation found five providers charging annual percentage rates of between 33% and 53%.

Across all 36 quotes analysed in the investigation, the median APR was 26.2%. This is in excess of the median credit card APR of 25.9% (October 2026).

Which? wants the government to ban motor insurers from charging extra for monthly payments and to require them to offer a pay monthly option.

Rocio Concha, director of policy and advocacy at Which?, said: “Too many consumers have already been pushed out of driving or into financial peril because of these unfair pricing practices that we’ve found can charge less wealthy customers more.

She added: “The Prime Minister has pledged to create more ‘breathing space’ for consumers, and that’s why we’re urging him to use the upcoming budget to announce a ban on two-tier pricing for motor insurance. We believe it is the best way to create a fairer, more competitive system that doesn’t punish the customers least able to pay.”