Pros and Cons of Paying for Car Insurance in Advance
May 8th, 2008 by Chris
Is it time for you to renew your car insurance policy? If so, you will want to consider all of your payment options before you move forward. While some people pay for car insurance one month at a time, this is not always the best decision. In order to decide what is best for you, you will want to consider the pros and cons of paying in advance.
Pros
1. Your car insurance company may offer a discount if you pay for your policy several months in advance. In fact, they may offer larger discounts if you pay one year in advance as opposed to three or six months. This all depends on your policy, as well as what your company is willing to offer.
2. You can save yourself a lot of time by paying for car insurance months in advance. As you probably know, it can be a pain in the neck to pay bills every month. By paying your car insurance in advance you can save yourself this time and stress once per month.
3. Pay it and forget it! Car insurance is not something that you want to think about everyday of your life; it just isn’t that exciting. For this reason, you may be best off paying your policy for a few months in advance and then forgetting about it until you receive another statement in the mail.
Cons
1. If you are on a tight budget, you may not have the money to pay for your car insurance policy months in advance. For instance, if your car insurance premium is $100/month you may be able to manage this payment. But for many, paying 6 months in advance at a clip of $600 minus any discount may be impossible. This all depends on how much money you have available, as well as what you are expecting in the near future as far as your finances are concerned.
2. What if you want to change your car insurance company but you are paid up in advance? This can make for a very tricky situation. Some car insurance companies may tell you that they cannot refund your money, whereas others may only give you back a certain percentage. And even if the company is willing to refund 100 percent of the money that you prepaid, you will have to wait for this payment which can be a pain in the neck. The end result in many cases is getting stuck with your current insurer until your next payment is due.
As you can see, there are both pros and cons of paying for car insurance in advance. Weigh your options before you make a final decision.
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