Struggling to pay your car insurance on time? Learn about various payment methods offered by auto insurance companies so you can choose what’s right for you.
Paying for car insurance leaves many people in a sticky situation. While it’s illegal to drive without any insurance coverage, many struggle to meet the frequent payments -- especially high risk or new drivers who face significantly higher deductibles than the average motorist. While it may seem that insurers are only trying to take your hard earned money, they actually understand that you have other expenses to budget for throughout the month like rent, groceries, phone bills, etc. With this is mind, car insurance companies have created several different payment methods so their customers can feel in control of their budgets. So it’s important to consider the options available to you and chose one that would best fit in with your other bills, income, and lifestyle.
Each car insurance company has different payment options available to their customers. Some will have all of the above options, while other will have very few. Whichever ones are offered to you, it’s important to pick the one that will ensure you pay your bills on time every month. Consider each option in terms of what will work best for you. For example, if you’re a forgetful person then setting up automatic payment with your insurer would probably be best. Each month the amount due will be taken from your checking account without you needing to do anything except make sure there’s money in that account. On the other hand, if you can remember when to pay your bills, but you’re constantly traveling for work then the mobile app payment would be best.
The option to choose your own payment cycle guarantees that your bills are manageable and paid on time. Of course, the more money you’re able to pay up front, the less you’ll owe in the long run. However, a large down payment shouldn’t be put down if it’ll break the bank. There are plenty of other options, including:
Monthly payments Monthly payments allow you to pay one, small sum of money each month. Therefore, monthly payments are a good option for those that are tight on money. On the other hand, a monthly billing schedule makes it easier to miss a payment and with resulting late fees it may cost more in the long run than if you had paid for the policy in full at the start.
Annual payments This billing schedule requires you to pay for your entire twelve month policy at the time of activation, so you need a pretty large chunk of change. Despite taking up a sizeable portion of your budget at once, choosing to go with annual payments actually saves you money in the future. Many car insurance companies will give a significant discount to those that pay annually. In addition, because you’re completely covered for the length of your policy, you’ll never be whacked with late payments fees. While this option may seem only possible for the wealthy, it’s actually a great schedule for teachers or other professionals who receive a majority of their income during certain months of the year.
Quarterly payments This billing schedule allows you to make four payments a year to cover the cost of your policy. Because there are only four payments, the amounts due will be somewhat high. With fewer payments you can control your budget, however you might end up forgetting to make a payment since they occur so infrequently.
Semi-annual payments You can choose to pay for your policy twice in one year. This is a great option for someone who would like to have the policy paid for so they don’t have to worry about it, but might not be able to put down the full payment at once. Of course, because there is still more than one payment, there’s always a chance you could forget to pay your bill and then get charged for late fees.
Two months down, five pay plan This is a common billing method if you’re purchasing a new policy. Basically, the last month of your policy won’t require a payment because you put it down at the start of activation. This will be a nice break while you spend time renewing or shopping around for a new policy.
Although car insurance is a business, companies are flexible with their payment methods to ensure their customers are able to pay for their insurance. Many companies offer discounts for things like automatic payment, paperless statements, and paying your annual policy cost a year in advance. Because all car insurance companies are different that means you have the option to find one that meets your personal and financial preferences. Find one that understands your budget at the right price on a site like Insurify that allows your to customize, build, compare, and purchase a policy in minutes with the help of professional agents throughout the quote process. You’ll be confident you’re getting the most coverage for the best price.