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May '14

Options for Auto Insurance Premium Payments

Owning an automobile comes with responsibilities and costs. If you are not careful these costs can add up pretty quickly to turn into a real financial burden. There are a few ways of reducing these cots. Some of them are; finding a reasonably priced mechanic, lower price fuel and insurance policies. You can also reduce fuel costs by following some basic guidelines.

If you are a good driver with no claim in the last three years you can probably qualify for large savings. Otherwise, you may have to find other ways of cutting costs. Shopping around for the best deals is another good way of finding cheaper auto insurance policies coverage. Rates charged by each insurer is different and the type of discounts available and their size is different as well.

Furthermore, the way you pay the premium once it is agreed can save you money. Or you may want to choose an option that is easier for your monthly budget if you cannot pay all at once. That is why it becomes important to check the options available with each insurer. Generally, they provide several options. But few of them may want to receive their premium a lot faster than others.

There are numerous ways to pay your vehicle insurance premium:

Monthly payments: This is the most commonly chosen way of paying premiums. Using this method, you can spread the costs over instead of having to come up with the whole amount now. So if you have a fixed monthly income and not much spare money in the bank you will probably need to choose this method of payment.

However, paying the premium using this method can be costly as many companies charge interest when the payment is differed. Therefore, you end up paying more at the end than agreed premium. Also, you may not get some discounts as carriers will only offer them to motorists who are happy to pay all at once.

Bi-Monthly payment: Some insurance providers also give you the opportunity to pay your premium once in every two months. Alternatively, they can devide to payments to 3 or 4 payments. This gives you a little relief as you do not have to pay on monthly basis, but at the same time you have to pay larger amount every two months.

Annual payment: Making payment annually means two things for carriers. They have extra assurance that you will stay until the end of the policy term. And of course they receive the money upfront and use it the way they like. This makes life easier for customers since they do not have to worry about insurance coverage lapsing due to missed payments. You will have a peace of mind that it is paid and you are insured.

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As mentioned above full upfront payment can qualify you for up to ten percent discounts with a few companies. This method requires means to come up with this money. Alternatively, you may consider charging it to your credit card and deal with it accordingly. Credit cards offer a lot more flexibility with how you pay them back. With most cards, you don’t get charged any interest for the amounts you paid back within as long as two months.

You should always make sure that premium is paid on time whichever method you choose. Otherwise, you will face policy cancellations and it will not look good to have lapses in your coverage. If you are struggling to make the monthly payment you should talk to the carrier. A reasonable auto insurer can give you few days more before they cancel the policy.

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