Should You Pay Your Auto Insurance In Full?
Paying for car insurance is something that most people do not look forward to doing. It seems that we tend to not want to pay for stuff that we don’t really use on a regular basis, but do so only because it is required by our state or finance company. Take California for instance, it is one of the many states that does require drivers to purchase financial responsibility for their vehicle. Certainly many Californians don’t want to make their payments, but they have to because it’s the law. It is just one of those things that you can not escape. There are several ways however to reduce the amount you pay for coverage. In this article we will look into the specifics of when and how it can be beneficial to pay your policy in full.
Discovering The Best Ways To Lower The Cost Of A Policy
Comparing auto insurance rates is by far the best way to make sure that you get a good deal. There are some other significant factors that come into play when determining the cost of coverage. Things like the amount of miles you drive per year, years of driving experience and driving record usually come to mind the when thinking of what affects your rates but not too many people know how important it is to select the right payment plan in order to save even more money. Some people are under the impression that they have to make monthly payments to be able to afford an auto policy. This may be the true for some people but chances are that you can probably afford to pay for at least a small chunk of premium in full, which can result in significant savings.
How Monthly Auto Insurance Payments Work Versus Paying In Full
When you make monthly payments on your policy there will most likely be an installment fee which is included in your total payment. Almost all carriers charge these fees when you choose to break your premium into installments. The fees are usually there to cover the cost of mailing out your bill every month and for the costs associated with servicing your policy. They could range anywhere from $3 to $16 per month / per payment. For an example if you are making your payments monthly on a 1 year policy with the average installment fee of $10 you are paying $120 in fees every year. The way to avoid these fees would be to pay your policy in full instead. If you are not able to afford the whole year you can try to pay off a 6 month policy. Some companies even offer 3 month policies which can make it even more affordable and save you the same amount of money over the course of a year. When you choose to pay in full you will not be charged installment fees because there are no installments involved and there is no need for the company to mail out a statement every month.
Pay In Full Discount
Another huge advantage for those who choose to pay off a portion of coverage is the pay in full discount. Many companies will actually reduce the price by a certain percentage as a way to entice customers to pay off a chunk of premium. This is by far one of the best ways to attain low cost auto insurance coverage. For those who can not afford to pay off the whole policy term, there is an option with most carriers to start off paying monthly and then pay off the balance at a later time when you have more money. This will at least save you from having to pay additional installment fees.