Paying for car insurance is something that most drivers seldom look forward to. However, it’s one of those things that can offer some incredible benefits especially if done in certain ways. Here, we will delve into a few car insurance premium payment intervals and the benefits that each offers.
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Monthly Car Insurance
Monthly payment option allows you make one smaller payment every month as opposed to one higher payment less frequently. This is a great option for those who rarely have a large single amount to pay for their cars insurance on a single payment. However, this method comes with a myriad challenges that include a higher probability of missing on your monthly installments. You will also end up paying more money than when you pay the full amount at once. In 2015, the average monthly car insurance rates in Alabama, Alaska and Arizona are $127, $132 and $102 respectively (taking every other parameter such as age, car model, driving record, credit history as normal). The annual rates are in these states are $1529,$1605 and $1222 respectively which are lower than the applicable cumulative monthly car insurance rates, even without taking into account discounts, administrative expenses, processing costs and other considerations.
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Yearly billings ensure that you avoid extra charges such as installment fees. Annual payments is also a great option for those who get most of their income or revenues during certain months of the year. By paying in full, you have a chance to save a considerable amount of money, thanks to the discounts that are regularly offered to those who pay their insurance premium in full. After making annual payments, you can rest assured that you won’t have to deal with late or missing payments. However, the downside to this payment schedule is that it takes a huge chunk of your money and so you will need to ensure that you have the funds that you need to make the big payments.
This payment schedule allows a car owner to make four payments per year, therefore providing a way to control your budget. However, if you are not careful, there is a possibility of forgetting your payment when it’s due.
This allows a car owner to make payments twice per year. While this is easier on your budget, there is a minimal possibility of forgetting to make the payment and get penalized. The downside is that you may pay more money than if you pay by a single installment for the entire year.
Which Payment Schedule Is The Best For You?
So these are available car insurance payment plans and options for you. To choose which payment schedule is the best for you, you will need to consider your lifestyle and budget. It’s of essence that you check which policies can offer you discounts as well. You will want to go for a payment schedule and method that saves you money while also meeting your personal preferences.