A young driver was quoted £1.2 MILLION to insurance his 10-year-old Vauxhall Corsa – and told he could pay monthly instalments of £104,000.
Rhys Barker, 27, of Manchester, bought the second-hand car with an 2003 plate earlier this year and paid just £1,400 for it.
When he went online to look for an insurance quote he was frustrated to find most were far higher than what he actually paid for the car.
But he was stunned when he logged onto the Zenith Insurance website – and they quoted £1.2m.
He said: “I went through all the questions and then the quote came up for £1,165, 977.75. I was convinced it must be a mistake, so I called them up on their helpline. They didn’t even seem to be shocked by it.
“They checked it for me and then said it was right.”
Not only that – but they reassured Rhys that for a slightly higher fee he could pay in instalments – with a first payment of £233,000 followed by 10 months of £104,000 per month.
He said: “I’m convinced they were just trying to price me out of buying insurance with them but it’s a ridiculous way of doing it. I’d love to know how they would have reacted if I’d just agreed to it – although with a car worth less than £1,500 it was never going to be likely was it?”
Rhys passed his test two years ago and had been paying £2,000 to insure a Ford Fiesta before he bought the second-hand Corsa and got the £1.2 million quote.
Rhys, a project analyst for Manchester United, says it is just one of many examples of how badly young and new drivers are treated by insurance firms.
He added: “I’ve got one of the cheapest cars you can get but the criteria for insurance is crazy. “If I change a search from living alone to co-habiting, it goes down by £200.” He says postcode-based quotes are also unfair.
“I’m classed as Salford because of the first three figures – why don’t they look at the whole postcode? The way they assess risk makes no sense at all.”
Rhys is now insured with Bell, which is owned by Admiral. He has a Telematics box – a black box which records how he drives to lower insurance rates.
He added: “That’s not fair either really because when you go over a speed bump it counts against you, and if you have to stop suddenly because someone steps into the road it does too.”
Gary Humphreys, group underwriting director at Markerstudy Group, which runs Zenith, said: “The price Mr Barker was quoted reflects that we have ‘declined’ to provide cover, as we would not expect a customer to pay such a high premium. This is not a case of pricing customers out of the market but quoting on the risks that are within our rating parameters and declining if they are outside.
“Without the detail we are unable to tell why Zenith was unable to provide cover at the time. We are aware this website has changed the way it quotes since Mr Barker used it, so that if a quote is over £10,000 it ‘declines’ rather than quotes a high premium.”
A spokesman from Admiral Group plc said its premium is based on statistics.
He said quotes change because of factors like marital status or postcode because they reflect the risk taken on by an insurance company.
He added: “Therefore it is vital that customers provide us with accurate information so that we can ensure we are pricing their policy accurately.”