How Sally and Paul saved themselves £3,700

The PPI saga goes on. Reports of mis-sold policies, inadequate sales processes and consumers being ripped off abound. But, apart from the positive news that Office of Fair Trading (OFT) and the Financial Services Authority (FSA) are taking a firmer stance with companies who provide a poor and / or expensive product, there are ways that you can ensure that you are not part of the great PPI scam.

Here is Sally and Paul’s story showing how they saved themselves hundreds of pounds on PPI. And you can, too…

When taking out PPI, Sally and Paul Black learnt first hand just how expensive some policies can be. The book keeper and Business Development manager from Gloucestershire took out a £8,000 unsecured loan recently to fund the purchase of a new car. The competitive loan interest rate of 8% seemed a great proposition.

The couple were offered insurance to protect them in the event that they were unable to repay the loan due to redundancy, illness or accident. It seemed the right thing to do, until they realised how much they would have to pay out in premiums.

While the loan would cost them £304 a month, the PPI came in at £79.

Sally and Paul had second thoughts. They wanted the loan but did not want to take it without some form of loan protection. Then by chance they came across a standalone policy from British Insurance on the internet.

Sally says: “At first we didn’t realise that you could buy PPI from someone other than the lender. When we found out that we could get a policy offering even more benefits than that offered by the loan provider – and at just £6.76 a month – we were really pleased”

Over the term of the loan, Sally and Paul will save nearly £3,735 on PPI repayments compared with what they would have paid from their loan provider.

The moral of this story is shop around for PPI and don’t be coerced into buying an expensive policy from your loan provider.