Car Insurance Quotes

When signing up for an auto insurance policy, policyholders are made aware that they can either purchase the entire policy upfront with one large payment or they can have that payment broken down into monthly payments. Some drivers choose the one time payment while others choose to pay the premium over the time of the policy period. When drivers choose the latter method of payments, it’s because they feel this way is a better fit for them than having to pay the entire payment upfront. It could be nice to have the premium paid in full at the beginning of the policy period, but for some drivers it is just not possible. To help a person make a better informed decision about paying for their insurance coverage as a monthly payment, we’ll go over the benefits we’ve seen from paying month to month.

1. Cuts Down On Worrying
With the economy being as rough as it has been over the past few years, many people have had to reorganize how they pay their bills to make sure they can pay their bills. There have been a large number of drivers who have lost their jobs due to company cut backs, and even those people need to drive to interviews and find other jobs. Paying a lump sum of many hundreds of dollars for some policies may be unfathomable for those drivers. To make this expense easier for them, they could enroll in monthly payments which allow for an easier bill to manage with a smaller expense. However, drivers should note that with paying a monthly bill they will also pay a small processing fee with each monthly payment. This fee is usually only a few dollars, but to the driver who is trying to save every dollar possible, this small fee may be worth changing to a one time payment.

2. Contract Length Remains The Same
Just because a driver switches over to a monthly payment, it does not change their 6 month or 12 month (or whatever the policy period is) contract to a month to month contract. The payments are due at the same time each month, and the contract continues throughout the length of the policy period. The only way the policy will change is when a payment is missed. If a policyholder fails to make their payment on time, they will be sent a notice from the insurer stating the payment must be made by a certain date or the policy will be terminated due to no payment made. A policyholder who has a hard time remembering the bill’s due date can set up an automatic payment through the insurer or maybe even with their bank to help prevent a forgetful moment and possible cancellation of the policy. As long as the policyholder makes the payment before the date, their policy will stay in tact.

Paying monthly will be in the best interest of the policyholder who is moving out of state some time during the policy period. Typically, a person who has paid for their policy in full would have to wait to see their reimbursement for the remaining insurance they have paid for but won’t be using. A driver who pays monthly will not have to wait for the insurer to send money back since they only pay for the month.

3. Zero Percent Down Policy
There is talk about getting monthly payments with 0% down or little money down. It sounds like the purchase of a house or car! A down payment associated with an auto insurance premium is a percentage of the total cost of the premium which is required to be paid at the beginning of the policy period. The remaining balance of the premium is then broken up into equal payments throughout the policy. An insurer who is announcing a 0% down payment or little down payment for their policy is telling future customers they either do not require the policyholder to make any type of down payment to begin their coverage, or their down payment is significantly smaller than what is being asked by other insurers. Some insurers will not require their policyholders to make a down payment after they have proven themselves to make every payment on time.

How Paying Monthly Works
A policyholder that signs up for monthly payments will be expected to pay some sort of down payment; sometimes it’s a small amount and sometimes there’s no payment at all. The insurer may want $600 for the entire 6 month policy with a 20% down payment. This means the policyholder would pay $120 upfront and the coverage would begin. For the remaining 5 months the policyholder would be expected to pay the remaining balance in equal installments, or $96 a month plus the processing fees charged for having a monthly payment.

There is no difference in coverage options that are offered to a person who pays monthly or who decides to pay the premium in full, nor is there a difference in the price of the coverage. But, there is a higher end cost from paying monthly due to the processing fees. Some drivers would agree that it is better to pay monthly for their insurance simply because the smaller payments are more manageable. It does not discredit the policyholder at all to pay smaller amounts more often and they will not be placed in a higher risk category for making payments this way. If it helps the policyholder to make their payments on time regularly so they are in good standing with the insurer, then it is worth switching to monthly payments.

To find an insurer to purchase auto insurance and pay monthly, use the quote comparison tool found on Online Auto Insurance’s website. The homepage contains the place where drivers can enter their zip code, answer questions, and get their quotes. The driver will have the option of paying month to month car insurance or in full, and hopefully after reading this and other posts on our site, that driver can make a more informed decision about which way to pay; monthly or in full.

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