Pros and Cons of Monthly Auto Insurance Highlighted

LOS ANGELES, Aug. 3 /PRNewswire/ -- With household budgets tight, some consumers may be anticipating the next car insurance payment with a bit of anxiety. The prospect of having to pay a relatively large lump sum for three, six or twelve months of coverage could be making 30-day installment payments look like a smart way to hold on to a bit of cash. OnlineAutoInsurance.com advises consumers to consider both the short- and long-term implications before switching to a plan with smaller payment intervals.  

In the short term, the clearest advantage of paying monthly is the ability to locate a company that will offer low down payment auto insurance and continue coverage by putting in place a monthly installment plan. Paying up front for six months or a whole year of coverage for a family with multiple vehicles or high-risk drivers could prove daunting, and spacing that cost out into a monthly installment plan may be the best way to go for consumers in this situation. Another advantage to using smaller payment intervals is the flexibility afforded to the auto insurance consumer; the driver paying in 30-day installments would not have to wait such a long period of time for a premium refund in the event of cancellation of the policy.  

But consumers should also consider the long-term effects that come with switching to a plan with smaller monthly payments. Although consumers paying in monthly installments have flexibility, those who pay for a term in full are rewarded for their commitment and will likely receive a sizeable discount from an insurer. So, even if the choice of an installment plan would save money now, the conscious consumer should calculate how much the overall cost of a policy would add up either way. The buyer should also keep in mind that insurers are likely to charge additional fees for having to send out more bills and process more payments. And insurance consumers who find themselves occasionally forgetting to settle the monthly bills on time should consider the potential cost of late fees and, even worse, the possibility of having to pay reinstatement fees due to non-payment or having to cover a loss that occurs during a lapse in coverage.  

Source: http://www.maine.gov/pfr/insurance/consumer/auto.htm  

Whether a prospective insurance buyer is looking for the savings that come with an up-front payment or the flexibility of smaller payment intervals, the best thing they can do is to shop around. Websites like http://www.onlineautoinsurance.com/pay-monthly make it easy for consumers to instantly generate free, personalized quotes from a variety of reputable carriers.    

SOURCE Online Auto Insurance, LLC

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