• Pros & Cons of Paying Annual Auto Insurance Premiums

    Some drivers may want a little advice about how to pay auto insurance premiums. Is it better to go by the month with small premium payments, or is a long term up front payment the way to go? Here are some of the pros and cons of “going annual” with auto insurance.

    Pros

    • Less Paperwork – Paying a one-time premium means no more annoying bill notice for each successive month. That saves a lot of trees, and keeps drifts of mail from under your door.
    • Deep Discounts – Some companies offer a good discount for annual up-front payments because they get your money quicker. Talk to your insurance rep about how to get the savings you deserve from an annual up front payment.
    • Less Chance of Late Payment – Late payment of auto insurance can be a real nightmare. When you have a policy in place, you’re all set for driving until that policy terms. On the other hand, if you are even one day late on payment in any given scheduled bill, the company can drop you, charge you huge fees for re-joining, and even deny new coverage, leaving you stranded and not legally entitled to drive while you shop for replacement insurance. Paying annually lessens your chances of ending up in these situations.

    Cons

    • A Big Chunk – An annual payment can take a bite out of your household checking account. Families living paycheck to paycheck may not have any choice but to opt for smaller monthly premium payments.
    • Less Flexibility – One thing that drivers should know about auto insurance payments is that they can go up or down according to many factors. Having a shorter term policy shows drivers what they are paying for, and helps them spot higher charges earlier.

    Take note of the above for deciding how best to pay your auto insurance premiums.