Just after purchasing the car, the next thing comes to mind is the registration and insurance policy. Paying the entire insurance premium for a year at a time is quite pricey matter. However, there are some benefits that you should consider.
3 Major Time Frames of Premiums
- 12 Months (Yearly)
- 1 Month (Monthly)
- 6 Months (Bi-Yearly)
Benefits of Yearly (12 Months) Payments
The yearly payment option is standard and it is offered by almost all the insurers. The major benefit of this policy is you have the option to take a discount from the provider. As you are paying full in advance, you are going to be their customer for at least 1 year for sure. Hence, the insurer will obviously give you a discount.
How Much Discounts on Annual Payment?
Depending on the insurer the rate varies from 5% to 20%. To avail the discount, get quotes here.
More about Annual Payments
There are a few more benefits of paying yearly. On your busy schedule, you don’t need to worry about paying the premium every month. You get the peace of mind for a complete year. You don’t need to worry about late fees as you have already paid in advance.
It is perfect for seasonal employees. Do you get a big amount of money at a specific time of the year? Use that money to pay the yearly premium and you will save a few bucks at the end. It benefits you a lot.
Benefits of Monthly (1 Month) Payments
Is your premium is quite big? Paying yearly could be difficult for you. If you do a job or business and has monthly limited earning then you can choose this policy. Hence, the major benefit is you are not taking the headache of paying a big amount of money at a time. However, you are missing the advantage of discounts but it gives the relief of not spending a big amount of money at once.
You must choose Auto Pay to save on monthly payments.
Switching Insurer? Don’t Overlook!
If you pay a monthly premium, you can switch the insurer at any time. You don’t need to wait for cancellation of the existing policy. There will be no issue regarding a refund. If you find any more convenient offer from another insurer, you can just shift without any hassle.
Benefits of Bi-Yearly (6 Months) Payments
This policy is great if you want some discount (less than yearly plans) but don’t have enough money to pay for the entire year. However, the discount amount will not eye-catching in this case.
If you pay bi-yearly, you are getting the opportunity to evaluable the insurance policy. You will notice the pros and cons of the existing policy and if you want you can easily switch to another insurer after 6 months.
Read Also: No Down Payment Car Insurance for Low Monthly Payments
Which Payment Term is Suitable for You?
Honestly, it depends on you! If you want to save in the long run, you should go for a yearly payment. You can avail the discount and save a big amount lately.
We recommended paying the yearly payment for long-term benefit. The rest depends on you!