Pay monthly gap insurance falls into two different types.
There is a pay monthly gap insurance policy which is simply a standrad policy which you have decided to pay monthly.
For example you want to buy a four year vehicle replacement style of cover which costs £179.00. Instead of paying the for the policy in one lump sum you have instead elected to pay in monthly instalments. To take advantage of this type of scheme you will normally have to pay a deposit which is normally one month in advance then the rest of the policy is paid over a set period traditionally 12 months.
If you are considering this type of policy it is worth while checking if any interest is added as if it is it can mean the you will end up paying more than you first thought.
The second type of pay monthly gap insurance is classed as a monthly re-newable policy. This style of gap insurance can be a little confusing and can vary from supplier to supplier.
In most cases this type of pay monthly gap cover simply re-values your vehicle every time you pay an installment. Naturally this means that the value it is protecting goes down over time. While this can be good if you only plan to keep your vehicel for a very limited time frame long term it can cost considerable more and leave you will a much lower level of protection. If you are in doubt as to how your pay monthly gap insurance works simply ask your supplier.