When it comes to paying for auto insurance premiums, insurance companies offer various solutions that can accommodate any budget. One of the most popular options with drivers is to pay monthly insurance premiums in 12 equal installments. Like anything, there are pros and cons to paying monthly auto insurance premiums. Drivers should consider all options carefully when choosing how to pay for car insurance. The following are some considerations to help make the decision easier.
Budget-friendly – Paying auto insurance premiums on a monthly basis translates into smaller amounts of money leaving your bank account at a time. Instead of paying the entire premium in one lump sum, which could be a financial strain on a tight budget, the premium is divided into smaller, more manageable portions. This makes for easier budget planning.
Convenience – Many insurance companies offer conveniences such as automatic bill pay, where the monthly premium is automatically debited from your bank account or credit card. For those who want their car insurance payments on auto pilot, this is a good option to consider.
Higher Cost – Oftentimes, insurance companies offer discounts to drivers who pay their auto insurance premium in one lump sum. In some instances, this could total 10-15% in savings as compared to paying monthly premiums.
Another Monthly Payment – Paying auto insurance premiums on a monthly basis adds another payment the driver becomes responsible for each month. With a monthly payment plan, there is no peace of mind that comes with knowing that the auto insurance payment isn’t due for 12 months.
Certainly, there are many other considerations when deciding how to pay for car insurance. It is a decision that is entirely dependent on family finances and other obligations. Regardless of personal situations, though, every driver should use their annual renewal period to price out auto insurance with different insurers. Finding the ideal combination of price, payment, and convenience options will save drivers time and money when it comes to their auto insurance.