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Monthly Car Insurance: Compare Companies and Payment Options

With the wide variety of available car insurance policies these days, more and more people have become interested in policies that involve them paying for monthly car insurance. It seems as though people end up paying around $150 per month for their auto insurance policies; this is on average in the United States. Sometimes providers will allow you to make payments when you choose to do so. Many people for convenience reasons decide that it would be better to pay each month for their car insurance in comparison to paying at the end of the year.

Some policies involve customers paying every 3 months, some every 6 months, and others are annual; meaning that customers pay at the end of the year. There are a lot of different factors that car insurance companies take a look at to determine whether they think that a person should be eligible for a certain type of car insurance. Most of the time, you will not have much of a problem getting a monthly payment policy if you want one. There are many customers that prefer to make their payments at the end of each month just like a cell phone bills or television bills.

Monthly Car Insurance: What to Know about Paying by the Month

Most people that decide to get monthly auto insurance are either required to pay each month by their insurance company or they request to be put on a monthly payment plan. Not everybody will be able to get this type of payment schedule, but often times car insurance companies want higher risk individuals on a monthly plan which allows them to make installment payments after every 30 days of being insured. People with bad credit are usually the best candidates for this type of payment strategy because auto insurance companies can keep close tabs on whether they have been able to successfully make payments.

With that being said, do not assume that everybody paying monthly for their insurance has bad credit or financial problems. There are certain companies that require a majority of their customers to make payments after 30 days. In other cases, people make the decision to pay for their insurance at the end of each month so that they are focused on coming up with the cash at the end of each month and aren’t forced to write a big check at the end of 6 months to their insurance agency.

Billing fees: Beware of additional charges

Some companies have fees associated with each billing statement that you should be aware of. This means that every single time that you make a payment, you are required to pay an additional processing fee or collection fee as issued by your insurance company. People that pay monthly may have to deal with some extra fees – which over time – may end up being a significant amount of money. If you pay monthly and don’t have to worry about these fees (not everybody does), then you have nothing to worry about. But if you notice that you are being charged extra for each time that you make a payment, it may not be a good idea to keep up your monthly payment policy; you may want to change to bi-monthly or something even more spread out.

Finding a company with flexible payment options

If you do not have auto insurance and are looking to get a policy in which you pay at the end of each month, there are plenty of companies that will help you directly from the internet. Most mainstream companies will have flexible payment strategies and they will allow you to speak with them about how often you would like to pay. Some companies do not give you a choice, but as car insurance becomes more customizable and customer-oriented, it seems as though the customer has more of a “say” these days than they did in the past.

Getting deals online

If you are looking for a new policy that allows you to pay on a monthly basis, you first want to look for good deals online.  Make sure that the companies that you are looking at are legitimate; most of the time if you have seen a company advertising on your television like Geico, Progressive, and State Farm, they are going to be a good option to consider. If you have never heard of a company, and they seem to have a significantly lower price than the rest, do your research and make sure that they are legitimate before you do business with them.

Make sure that the insurers are reliable

After you have found some good prices for your coverage, you will want to make sure that the insurers are reliable and well established. In order to make sure that they are reliable, you will want to read customer satisfaction reviews, as well as independent business reviews to make sure that they are doing a good job. Often times people forget to check out reviews and do research and when they end up with a certain auto insurer, they are disappointed in their quality of service or find out about some extra charges that they are upset about. Don’t make the mistake of not researching the potential insurers that you are considering for your policy.

Compare the best price quotes to each other

An obvious next step after taking a look at the reliability of companies is to compare the prices of quotes that you have received. If one company is able to offer a lower quote than the next, and both have equally good reviews of service, it’s a smart idea to take the lower priced quote. Prices that are offered by auto insurance companies are constantly changing because they are aiming to attract new customers – that’s why there are lot’s of new deals, etc. Gathering quotes and selecting the best one is usually the best way to go after comparing how quality the insurance companies are based on multiple sources of reviews.

Speak with a company agent for payment plan verification

If there is a company that you think would be a good fit for your insurance, it would be a smart idea to speak with a representative from that company so that you know whether they will actually give you the most accurate information regarding monthly payments (i.e. price quotes). Sometimes people assume that every company will allow them to make monthly payments and this isn’t true. Most of the time, people will get to pay for their insurance after 30 days, but sometimes it just doesn’t work out. If you are convinced that a monthly payment plan would be best for you, then make sure that the company you are considering for a policy offers this type of payment scheduling.

Advantages of Paying by the Month

Some prefer to pay monthly

Many people that are paying on a monthly basis for their car insurance prefer to pay this way. Some think that it is much less of a hassle when they continuously get billed at the end of each month for their insurance. Although some may disagree and think that getting billed each month would be annoying, some people would rather make monthly payments than big, more expensive payments at the end of 6 months or at the end of each year. It is up to you to decide whether you like the monthly payment strategy or would rather have a policy that allows you to pay less frequently.

Easier to keep track of your finances

Each time that you make a payment, it makes you aware of how much you are paying for your insurance. Since you are constantly aware of how much money you will be paying out to keep your insurance policy, it will be easier to keep track of your payments and stay organized. If you have a policy that doesn’t require you to pay each month, you may forget about your payments or fail to financially plan for making your next payment. When paying at the end of each month, the billing statement is a reminder that “yes” you are still paying for car insurance and that it is important to keep proper documentation of your payments.

Disadvantages of Paying by the Month

More time consuming, more of a hassle

For some people, making payments at the end of each month is too time consuming and receiving billing statements frequently is just a hassle. Many people are annoyed with having to pay small payments to their insurance company at the end of each month. Although some people aren’t given an option to pay less frequently than monthly, some people would much rather prefer to bay bi-monthly, or after a time period like 3 months. Each person is different, but many people would rather make a larger payment that covers them for the next few months than having to worry about getting billed month-by-month.

Can be more costly over long term

Sometimes monthly payments end up being more expensive due to the fact that there may be fees associated with each payment. Other times, car insurance companies may decide that people paying each month should pay more money to cover for processing fees. Other times, it may actually be less expensive to pay monthly than bi-monthly because insurance companies are happy to be receiving continuous amounts of money from their customers. Each insurance company operates under different terms and conditions, so be sure to talk with them about how various payment policies compare over the long term.

Is Paying on a Monthly Basis the Best Option for You?

The way to know whether monthly car insurance is right for you is to research the cost of it over the long term. If you can get a different payment policy such as one that is bi-monthly that will save you hundreds of dollars over the next year or two, it would probably be in your best interest to take that policy. In other cases, some people are not given an option to choose anything but a monthly policy due to the fact that they have a bad credit score. If you are only given a monthly payment policy option from most insurance companies, and that is what you wanted, then great.

If on the other hand, you wanted a different payment policy and you have a bad credit score, you may have to wait some time until your credit rebounds and the company views you as a less risky client. For most people that have not had a bad credit history or any other problems with insurance, choices will be given as to how they would like to make their payments.

Make sure that you do some calculations and figure out which payment plan would save you the most money over the long term. Also take into account whether a monthly policy would be convenient or a hassle for your particular situation. After you have taken these factors into account, then decide which company you would like to buy insurance through or speak with your current company about possibly switching the frequency of your payments.

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