Whether you own a vehicle or are considering purchasing one, the cost of car insurance can seem like yet another monthly expense to add a long list of seemingly endless bills. To remedy this feeling (and to save money!) it’s in your best interest to consider a pay-in-full payment plan for your insurance coverage.
Pay-in-full versus paying monthly
Picking a payment plan for your car insurance can be tricky, especially when you take the time to consider the countless providers and plans that are out there. When opting between a pay-in-full model and a monthly payment plan, you must first consider your financial situation and future goals before deciding if its advantages outweigh its drawbacks.
Advantages of paying in full at the start of the year
Adopting a yearly payment plan means you only need to think about paying your insurance once every 12 months or so, freeing your time, money, and attention to focus on more important things.
According to a study by Forbes, the nation’s 11 leading auto companies provide customers with 10% insurance discount when they opt to pay their full-term upfront each year. This can save you hundreds of dollars over the course of one year and thousands of dollars in a decade. Even the smallest savings add up over time, so don’t take them for granted.
Disadvantages of a pay-in-full schedule
If you’re living paycheck to paycheck or do not have a lot of savings, it may be disadvantageous for you to pay your insurance in full, regardless of how much the provided discount saves you. It’s important to always retain liquid assets in case of an emergency, so be sure to assess your situation and make sure you can afford a yearly car insurance payment without compromising any of your other budgetary needs.
Bundling your home and auto insurance is another way to save money on your insurance costs. As your circumstances change, adjust your insurance payment plan to match your new financial situation.
Participating insurance providers
If you’re interested in shopping for a pay-in-full insurance plan, and the included discount, here’s a list of popular insurance providers that have comprehensive and inexpensive plans that may suit your needs: