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Is it
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If you pay monthly OR 6 monthly by DD the premium is 5%
Steve
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You are not paying extra for using DD, in fact, by using DD, you are getting a 50% discount on the PREMIUM for paying "in installments" which has been in operation as long as I have been driving, since back when you could tax a car every 4 months!
Steve
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Now you have got me confused
So you can choose a monthly DD or a DD every six months, the total cost being the same for either
but this is 5% dearer than a one off payment at the Post Office?
Ian.
That's basically it! If you pay annually, online OR at the PO, that is the base price. If you pay 6 monthly at the PO, you pay 10% more (there is no monthly PO option) If you pay monthly or 6 monthly online direct debit, you pay 5% more than the base price.
Say for example, you VED is £240PA, if you pay annually this is what you pay, online or at PO
If you pay 6 monthly at the PO you will pay £132 every 6 months (240/2 +10%) which is £264PA This is because of the PREMIUM that has always been charged for paying in installments.
If you pay 6 monthly by DD you will pay £126 every 6 months (240/2 +5%) which is £252PA
If you pay monthly by DD you will pay £21 every month (240/12 +5%) which is £252PA
In both the above cases you are paying a 50% LOWER Premium by using direct debit.
I look at it a different way round, by paying annually (in advance) DVLA has the use of your money for up to 11 months before they have "earned" it. If you sell or SORN the car during that period, you then have to WAIT for DVLA to refund YOUR money. Admittedly, with interest rates being what they are, i'm not saving the 5% by keeping the money in MY bank, but at least it's THERE if I need it, not earning interest for DVLA. And I never have to wait for a refund!
Steve