Paying your insurance premiums annually is almost always the least expensive option. Many companies offer a discount for paying the entire policy, since it costs the insurance company more if the policyholder pays their premiums monthly, since that requires manual processing every month to keep the policy active. Deciding whether you want to pay in installments or as a lump sum also depends on how you want to pay your bills. Some people find it inconvenient to pay a monthly bill and instead prefer to make a payment for the whole year.
Other people may find it difficult to remember to pay their annual premium, since it's only paid once a year. Whichever option you choose, it's essential to make your insurance payment on time to avoid interruptions in coverage and potential late fees. You can pay for your car insurance annually as long as you request a 12-month term. The only problem with this is that many companies prefer to offer six-month terms.
Start comparing long-term prices now. All insurance products are governed by the terms of the applicable insurance policy, and all related decisions (such as coverage approval, premiums, fees and charges) and policy obligations are the sole responsibility of the insurance insurer. Ultimately, you'll want to find a payment method for your car insurance that balances personal preferences and saves you the most money while still providing you with the car insurance protection you need. Unfortunately, if you choose the wrong policy when you apply for insurance, you may not have the option of paying for an entire year of car insurance all at once.
He has spent many hours helping his customers understand the insurance market so that they can find the best auto, home and life insurance products for their circumstances. This information may be different from what you see when you visit the website of an insurance provider, insurance agency, or insurance company. As executive vice president of Lending & Insurance Solutions, Ty Harrison leads teams of lending and insurance professionals dedicated to offering value-added programs, services and technology designed to address the needs of lenders, loan servicers, portfolio managers, mortgage brokers, insurance agents and insurance brokers. They can also combine your car insurance and your home insurance to save more, and also explore discounts.
Your financial situation, how you prefer to pay your bills, and the likelihood that you'll change companies in the medium term are determining factors when choosing an auto insurance payment plan. You always have the option of purchasing additional guarantees or forms of protection at the dealer's financial office, but car insurance is mandatory. This reimbursement process could create difficulties when making the first payment on a policy with a new auto insurance company. But if paying a large lump sum up front would put you in a difficult financial situation, such as not being able to afford your car insurance deductible, making monthly car insurance payments might be a better option for you.
If you can't pay your insurance premium for the whole year in advance, most insurance companies now allow you to pay the premium with a monthly payment plan. Bankrate has broken down the pros and cons of dividing your car insurance premium into monthly installments so you can decide which payment plan option is best for you.