While it may be attractive to spread the premium over a period you would need to keep the costs in mind too. Most insurers offer various auto insurance down payment options for their policyholders, as long as certain requirements are met. Usually, size of down payment and number of proceeding installments depend on your zip code, insurer and credit history.
You need to make a down payment on car insurance or pay the first month’s premium in order to activate auto insurance. Furthermore, you need to keep up with the payments to ensure it remains active. You don’t want to be worrying about and asking questions like what happens if I pay my car insurance premium late? That is why it is important to find a payment plan you can manage.
As far as payment method is concerned you can pay online, by phone, in person, through an app on your cellphone, by check, credit card, bank transfer or cash with most companies. However, some carriers may require automatic bank payments for setting up auto insurance payment plans.
How Much Is Average Down Payment on Car Insurance?
Insurers offer various payment options to different customers. Your overall premium cost can change depending on the option you choose. A few companies like to receive large first payment followed by 2 or 3 further installments. This first payment or the down payment can be about 10% more than the other installments or it may be about 1/3 of total premium.
It is no secret that vehicle insurance providers like their moneys as early as possible. That is why you can usually claim about 5% full payment discount. Furthermore, you are usually charged installment fees for spreading the costs. So, it is important to compare the final premium cost when you compare quotes with installment.
Usually automobile insurers charge an installment fee of about $10 per installment. Some carriers can offer two further installments at no extra or minimal cost if your first payment is large enough. So, the bigger the down payment the lower the overall cost of insuring your automobile and the cheapest option is full payment.
Can I Buy Cheap Auto Insurance with No Down Payment?
The good thing is that there are plenty options in the market, especially for good drivers with good credit history. You can certainly get cheap no down payment car insurance if you shop around for it. But, your options can be limited or disappear entirely if you have bad credit or require SR-22 filing.
No insurer will issue a policy without receiving upfront payment. The size of this payment depends on your credit history, state laws and the insurer. In general, drivers can find companies who offer monthly car insurance and accept the first month’s payment as the down payment. However, installment fees can add up fast if you choose to pay monthly. In addition, companies that offer monthly payment option may be more expensive than others.
You should know that you may not have any grace period for vehicle insurance payment and your policy can be cancelled if you default on your installments. It is best to check if you have any grace period for missed payments and make sure that premium is paid in a timely manner, whichever way you pay.
It is worth reminding again that every company has different vehicle insurance rates, payment plans and installment fees. If you want the best and cheapest policy you need to take your time to compare automobile insurance providers. It may take a few minutes of your time but looking into your options properly can increase your policy satisfaction and save money.