Monthly Car Insurance
The average car insurance policy is most likely one of your largest bills every year and for this reason, more and more people are starting to choose to pay a monthly car insurance instead of paying every 6 / 12 months in one lump sum from the offset.
If you have the money to pay in one lump sum you should choose this method as it is a better idea rather than breaking it up into monthly payments as the more payments you have, the more money you will have to give. Most of the insurance companies will give you significant discounts if you choose to pay all the money upfront. The automotive insurance industry is very competitive and from time to time they make certain adjustments and spread out the payments in order to keep their clients. For this reason, it would be a good idea to call them and find out the latest offerings.
If you are not satisfied with your current insurance company or you just bought a car and want to get it insured, make sure that you take your time and check out all the offers that you have available. Most of these insurance companies have online premium estimators that are quite accurate and there are other websites where you will be helped shopping and obtaining quotes from different companies at once, saving you a lot of precious time
When you are doing comparison shopping online, don’t rush and make sure that read through everything. Most likely, you will be offered a few various payment plans, depending on the chosen level of coverage. If you are financing or leasing a car, the level of coverage is most likely mandated by the lender and it will probably be very comprehensive so that they protect their investment – in translation, you will most likely have to pay more than you had in plan. If you fail to comply with these regulations, you can lose your car, even though if the payments have been done on time.
You will have a lot more options if you own the car outright. Don’t exaggerate and get many extras that you don’t need. There are many people out there that purchase a wide array of extras and they end up paying more than they should. For example, if you just bought a car that is worth $1,500, spending $200 month / $2,400 year wouldn’t be a wise investment because it will end up costing more than the car itself. In this case, you should take the minimum amount of coverage in order to get the lowest monthly car insurance possible, while still meeting the state’s legal car insurance requirements.
A viable method to find the best deal would be through an independent car insurance broker. Usually, these people have a great deal of experience and knowledge working with many different car insurance companies and they have the ability to negotiate a better rate for you. Of course, you will have to pay them a fee for their services but in the end you might save a couple of dollars.
If you haven’t made up your mind whether to pay in full or spread out the payments, here are the advantages and disadvantages of choosing to pay your car insurance on a monthly basis.
If you choose this method, the insurance bill will fit in nicely in your budget. The payments that you will have to make represent an expected outflow that it is already allocated in your family’s financial plan.
Another advantage is that you will have more liquidity, especially if you are on a strict budget, allowing you to relief some of the financial pressure.
You will also have more flexibility as you will be able to change the insurance company easier. However, if you decide to switch the insurance company, the new one might ask you for a deposit.
Here are the most important disadvantages: it is pretty inconvenient when you take into consideration that every month you will have to complete a lot of paperwork. In addition, you will have to pay processing fees which although they are small, these feeds can add up faster than you think. Over the course of a year, these processing fees could cost you at least $50, depending upon your insurance policy.
If you decide to cancel your insurance policy after paying upfront, you will get a pro-rated balance from your current insurance company. The problem is that you will have to wait for the check, which might take even a few weeks.
The best thing to do is to analyze your monthly budget and determine the value that you place on liquidity. It goes without saying that if you can afford playing in full, you should do it in order to avoid all the extra transaction fees, the additional paperwork required. If you are on a limited budget, choose your other option to keep a suitable level of liquidity.
Post tags: Tags: monthly car insurance
