Pros Of Paying Auto Insurance Monthly Versus In Full
Nearly every auto insurance policy out there offers consumers the ability to pay bills in several ways, commonly either by monthly payment or a "full" payment (usually for six months or a year's worth of coverage). The full payments often offer significant discounts, which is why they're popular among frugal consumers. However, there are also some very notable advantages to choosing a month-to-month auto insurance policy. Before you choose a payment method for your insurance coverage, it's important to consider every advantage and disadvantage of paying month-to-month.
First of all, while it's true that "full" payments save quite a bit in the long run, they're quite difficult to afford in a single chunk payment – especially when starting a new policy. If your auto insurance rate is $1000 for a yearly payment and you don't have that kind of money saved up, it's obviously quite a bit more beneficial to use the monthly plan – at least until you can save up enough money to upgrade to a full payment. Some drivers can also have trouble saving up money each month for full payments. In this case, they find that a month-to-month auto insurance premium is easier to handle, as they're organizationally much simpler. Sometimes an insurance provider offers direct withdrawal from your bank account or credit card.
Monthly fees for auto insurance are also good ways for drivers to see sudden changes in their policies. This is especially beneficial for drivers who occasionally like to check around for better auto insurance rates. In every state of the U.S., you're required to have a new form of auto insurance before canceling an old policy (to prevent any drivers from driving uninsured). If you're working on a month-to-month payment plan, it's a lot easier to switch insurance providers. After switching companies, full auto insurance policy customers will have to wait for their insurance company to issue a refund for any time that they've paid for but won't be using. Paying month to month is much less of a hassle in any sort of insurance transfer, and typically takes less time, too.
There are also some disadvantages to paying for automobile insurance on a month-to-month basis, including, of course, the higher price. But, for many drivers, this method is a much more manageable choice. Of course, if you're exceptionally responsible, have enough money to pay for your auto insurance premium in a large chunk, and you don't look around for different insurance rates, it may be in your best interest to pay in full.
The number of benefits on either side makes it ideal to thoroughly consider your options before deciding on a payment. Ultimately doing this will bring big savings in time and money.