What used to be called "budget" accounts for utilities are a different issue. It's a matter of opinion as to what level of monthly payment produces a nil balance at the year end, so some degree of compromise is necessary.
As to issues with the car tax, we'll see.
I sell a car about once every 10 years so I won't loose sleep over it. We only renewed ours in August so by the time it comes round to renewal, we'll know how the system is shaping up and can either do the DD or pay it up front.
------------- Mike
My advice is worth no more than the price paid for it
Quote: Originally posted by mintymonkeylove on 10/10/2014I've always paid all my utility, TV licence, insurance, council tax etc etc bills by direct debit and never had a problem in about 20 years.
Things like the TV licence, insurance and council tax are not a problem paying by DD because they are a fixed annual fee just divided by 12 so you know how much it will cost every month and that monthly payment will pay the annual fee exactly.
With things like the gas and electric and water meters your annual consumption is estimated by the company and then divided by 12 to determine the monthly payments. However, they have little idea and you probably have no idea what your annual usage will be but you can guarantee that the utility has over estimated by quite a large amount and so you are probably paying far more each month than your actual monthly usage.
By the end of the year you will be in credit with the company for sometimes over a hundred pounds. They don't normally send you a cheque for that but they will reduce your monthly payments the following year. However, they will over estimate again so you will always be in credit to the company. If you have lots of dosh to play around with you probably won't mind too much but your money is in their bank earning them interest when it could be in yours.
Just imagine, given all the customers they have, the millions of pounds that is 'borrowed' off the customers and earning the company a small fortune in interest while the customers are struggling to pay the inflated monthly bill and make ends meet.
However, that is a different issue to the car tax and under normal circumstances you would only be paying enough money each month to pay off the tax. The problem may (or may not) arise when you come to sell the car and there is a delay between you notifying the DVLC and the DVLC processing the paperwork and acknowledging that you have sold the car and stop taking money out of your bank account.
It'd make me tired being that pessimistic! I manage all by accounts online & gas/electricity is the only one I have where I can build up a debit or credit but you can keep an eye on it & amend payments online & if you forget & carelessly let an excess build up get a BACS credit.
I reckon cancelling tax under this new system will likely be done online too.
Quote: Originally posted by mintymonkeylove on 10/10/2014I've always paid all my utility, TV licence, insurance, council tax etc etc bills by direct debit and never had a problem in about 20 years.
Things like the TV licence, insurance and council tax are not a problem paying by DD because they are a fixed annual fee just divided by 12 so you know how much it will cost every month and that monthly payment will pay the annual fee exactly.
With things like the gas and electric and water meters your annual consumption is estimated by the company and then divided by 12 to determine the monthly payments. However, they have little idea and you probably have no idea what your annual usage will be but you can guarantee that the utility has over estimated by quite a large amount and so you are probably paying far more each month than your actual monthly usage.
By the end of the year you will be in credit with the company for sometimes over a hundred pounds. They don't normally send you a cheque for that but they will reduce your monthly payments the following year. However, they will over estimate again so you will always be in credit to the company. If you have lots of dosh to play around with you probably won't mind too much but your money is in their bank earning them interest when it could be in yours.
Just imagine, given all the customers they have, the millions of pounds that is 'borrowed' off the customers and earning the company a small fortune in interest while the customers are struggling to pay the inflated monthly bill and make ends meet.
However, that is a different issue to the car tax and under normal circumstances you would only be paying enough money each month to pay off the tax. The problem may (or may not) arise when you come to sell the car and there is a delay between you notifying the DVLC and the DVLC processing the paperwork and acknowledging that you have sold the car and stop taking money out of your bank account.
Post last edited on 11/10/2014 00:14:29
They will probably just be able to change the amount they are taking out if you buy a new car.
our electricity company refunded us a whole £12 that we were in credit for without us even asking, I would have preferred it was left in there to be honest. they have to by law refund if you have a big credit now.
You can always set up a direct debit to pay the whole bill for a quarter so you always pay exactly what you owe, and it's cheaper to pay by DD.
There are rules governing DD. I pay everything by DDA and have never had any problems. I will certainly be paying my tax by DD too, will be nice not paying a lump sum, it's better in my bank and the extra you pay is less than when you used to pay for only 6 months.
Quote: Originally posted by mikegalagher on 11/10/2014And would any of us be happier if we underpaid gas then owed a big lump at the account year end?
No but we would be happier if we only paid for what we used.
I pay my electricity on receipt of the quarterly bill and it does cost just a couple of pounds extra to do that. However, I have access to my account online and can send in my exact meter readings and pay in as little or as much as I like at any time so that when the bill comes it is fairly low. I am not sure that my utility allows quarterly payments by DD.
Before I changed to my present electricity company I was also paying on receipt of the bill but their estimate and charges were anything up to £100 more...a quarter!... than it should have been and I always had to phone them up and get them to send a re-adjusted bill based on my meter readings. If you are paying by DD you have no control over the amount they remove from your bank based on their inflated estimates, unless you work out your usage yourself and confront them with your findings.
However, if anyone wants to carry on blindly paying over the odds then they can just ignore my ramblings...the companies love people like that
Quote: Originally posted by mikegalagher on 11/10/2014And would any of us be happier if we underpaid gas then owed a big lump at the account year end?
No but we would be happier if we only paid for what we used.
I pay my electricity on receipt of the quarterly bill and it does cost just a couple of pounds extra to do that. However, I have access to my account online and can send in my exact meter readings and pay in as little or as much as I like at any time so that when the bill comes it is fairly low. I am not sure that my utility allows quarterly payments by DD.
Before I changed to my present electricity company I was also paying on receipt of the bill but their estimate and charges were anything up to £100 more...a quarter!... than it should have been and I always had to phone them up and get them to send a re-adjusted bill based on my meter readings. If you are paying by DD you have no control over the amount they remove from your bank based on their inflated estimates, unless you work out your usage yourself and confront them with your findings.
However, if anyone wants to carry on blindly paying over the odds then they can just ignore my ramblings...the companies love people like that
Using the EON app on my phone I can see what our usage is and adjust DD accordingly. Our gas usage dropped dramatically with the warm winter and getting two dogs (door is always open). Sent us £86 and cut DD by £18.
------------- Dogs die in hot cars!
They also die if you leave them in the freezer.
Please keep your dogs at room temperature!
Is there a fee for paying by monthly DD. Usually find the organisation adds a few quid on each month for the pleasure of doing so, except utilities companies.
We pay ours by variable DD for the quarter in full.
I only mentioned it because of this comment.
I wish I hadn't bothered....
Quote: Originally posted by Bob61 on 10/10/2014
Quote: Originally posted by mikegalagher on 10/10/2014Always a first time I suppose. Never had that yet in however many years of DDs.
....
If you pay your utilities by DD they always take out more than you are actually using and then you have to argue with them to get them to drop the monthly payments...that was always my experience anyway.
------------- Mike
My advice is worth no more than the price paid for it
Quote: Originally posted by kimmie on 11/10/2014
Is there a fee for paying by monthly DD. Usually find the organisation adds a few quid on each month for the pleasure of doing so, except utilities companies.
My elderly father's electric and gas account is in credit by nearly £500! All they do is reduce the DD amount every year so he continues to have a huge credit plus as he is n Pension credit he gets about £135 ever year kick back from the supplier. They win always.
Bring on SMART metering so you know exactly how much you are using each month and you can still do a fixed monthly payment. For too long we have been conned by utility companies!
Hopefully this will not happen with the DVLA but I can see them doing similar to the way the DD is on a TV licence. Double for the 1st 6 months and then a normal payment for the duration so that you are always six months or similar in advance.
A day of all things motorhome and campervan. The show is held both in the main indoor arena and across the grounds. Catering, hot drinks and food options are available. Easy access to the site and free parking included. Win one of five pairs of day tickets
Topic: direct debit car tax.
