Paying your auto insurance premium in full may be cheaper from some providers. They like to receive their money quickly so that they can use it. In return some can offer you savings of about five percent. Many motorists would take the option of cutting their costs. They would say why pay more.
However arranging monthly payments is an option and has advantages. First of all, if you don’t have the money you really have only one way to go. In some cases, spreading the payments can even allow a driver to buy coverage that they cannot afford to pay at once. This could also allow owners to buy a larger cover than possible within their budget.
They have a few other advantages. One of them is that it offers a lot more flexibility when you are not satisfied with your provider. It is easier to cancel and move to another company since you are paying month to month. This is one of the reason companies want to tie you down. They want to make it harder for you to switch to one of their competitors.
Of course companies will have to refund the paid premiums if the policy is cancelled by the policyholder. However, this could take some time and you may incur small fees. When they are taking money it only takes seconds. But when they are returning it back to its owner they take their sweet time and hold it as long as they like.
It is worth stressing that when you are paying in several installments you should make sure that those installments will be made. Your policy is likely to be cancelled if you miss them. This is a distinct disadvantage for people who are not very good at managing their money. Make sure you have money in the bank before the due date.
It may be a good option to pay month-to-month when you are not sure about the quality of your new provider. You can get the coverage buy arranging the policy for the time being. This will allow you to take your time and research about the current carrier and the alternatives. If you are satisfied with your research you may stay with the firm. Otherwise, you can arrange an alternative policy and cancel the previous one.
Flexibility and easy of affording payments are two essential advantages you should consider. On the other hand you are well advised to keep up with the payments whichever option you choose. When a policy lapses due to non-payment it may be costly and harder to find a replacement cover. Most companies don’t like to have a payment problem with their policyholders. Actually, nobody likes to be messed up when it comes to receiving money.
It is best that you get several quotes and see who is cheap and expensive. This way you can find the lowest quotes and make it easier on yourself to cope with it. While you are comparing policies you should pay special attention to payment options. Not every company offers all the alternatives and some of them may not offer an option to pay monthly.