Pay and claim breakdown cover

Pay and claim is generally regarded as a budget method of purchasing breakdown cover. Is it an option you should consider?

Key points

  • With pay and claim, if you have a breakdown you'll need to pay the costs up front then claim the money back from your policy provider
  • The annual fee may be cheaper than with other policies
  • Pay and claim options tend to be few and far between

Pay and claim is usually the cheapest type of breakdown cover available to drivers and it's something of a niche policy.

As with a standard policy, with pay and claim you pay an annual fee up front, but the cover you receive is likely to have certain distinct characteristics.

Firstly, the breakdown company will not operate its own patrols.

Instead, it will contract its services out to a local recovery service.

Secondly, and perhaps most significantly, you'll be required to pay the local service when you call them out and then reclaim the money by sending the receipts to your breakdown provider.Jump leads

Advantages of pay and claim cover

As opposed to standard breakdown insurance, pay and claim cover is usually cheaper and so can seem attractive to drivers on a smaller budget.

If your car is reliable, pay and claim cover could be a good option.

If you're faced with the cost of transporting your vehicle home from a considerable distance and you don't have the money to pay, you might be stranded with no cover and no way of getting home

It's hard to know when mechanical problems will strike, though, and if your car's old or has a history of unreliability, standard cover and its additional features may be a more attractive choice.

Before making your mind up, consider how you use your car.

Do you travel long distances for work or go on regular holidays to Europe? Or, do you use your car infrequently and only locally?

Think about your habits as a driver, your mechanical skills and the behaviour of your vehicle before deciding on a certain type of cover.

Disadvantages of pay and claim cover

One of the major disadvantages of pay and claim is judging your ability to pay when the time comes.How to cut the cost of breakdown cover

"If you go for a pay and claim breakdown policy it's important to consider your ability to pay the bill in the first place," said motor insurance expert Scott Kelly.

"Can you ensure that you'll have enough cash, or capacity on your credit card?

"If you're faced with the cost of transporting your vehicle home from a considerable distance and you don't have the money to pay, you might be stranded with no cover and no way of getting home."

For pay and claim to work for you, it's important to plan ahead in case an emergency presents itself.

A credit card put aside could be the answer, but for this to work you'll need to be disciplined.

Some current accounts offer attractive rates of interest or a dedicated savings account could be an option, but again you'll need the self-control to keep your emergency fund intact.

By Emily Bater