Almost three quarters of all motor insurance premiums will be paid by direct debit within the next five years as smaller and medium-sized brokers and intermediaries are getting in on the act.

Traditionally the preserve of large insurance companies, smaller firms are increasingly fulfilling the necessary criteria to use the direct debit scheme.

Research found that 47% of UK motor insurance premiums will be paid this year by direct debit, but this is expected to rise to 73% in the future.

One firm of brokers, Roadrunner, said that 20% of new business customers were paying their premiums by direct debit after only two months of offering it as a payment mechanism.

UK banks research found that more than 80% of people, who pay their insurance by direct debit stick with the same company at renewal compared to 60% of those who use a credit card.