Every auto insurance company offers several different options for paying your vehicle insurance premium. Several car insurance firms let you pay over the phone or online by electronic check or credit card, while others will require you to send in a check payment. You may also have the option to make an installment payment or pay for your insurance premium up-front, and you will save a few dollars each month in penalties and transaction fees.
Annual premium payments typically do save you money over the course of the year, and can also help you save time because you don’t have to worry about making a payment by a certain due date each month. Here are some important things you should know about paying your car insurance in full:
Cost Benefit of Paying Car Insurance in Full
A large number of car insurance firms offer the option of making quarterly or perhaps even monthly payments for a fraction of the yearly premiums as a convenience for their customers. Whether or not paying up front will be beneficial for you depends on your specific circumstances. For some people on a tight budget, it is simply easier to pay in installments. In these cases, the car insurance provider can set up an auto payment with your checking account and deduct the payment each month automatically.
However, there is typically a fee associated with making installment payments. In some cases, you will be paying up to $10 or more per payment and may also incur billing and processing fees. If your policy is low enough that you can afford to make a one-time payment, you will enjoy some money-saving benefits.
Fees Associated with Insurance Installment Payments
In addition to the monthly fees associated with making insurance installment payments, you may be responsible for paying service fees per transaction when paying by credit card, over the phone or online. Different car insurance providers have different policies on transaction fees, but these will add up if you choose to pay on a monthly, quarterly or installment payment program.
When you choose to pay your auto insurance premium in full, you may only be required to pay a single transaction fee. In many cases, you can simply send in a check for the full amount and avoid transaction or processing fees altogether.
Paying your car insurance in full offers a number of money-saving benefits. Installment plans are designed as a convenience for customers that may be on a tight budget, or for those who simply don’t have the full amount of their premium available to make an upfront payment. In most cases, you can avoid many types of transaction and service fees simply by making a one-time payment for your car insurance in full.