Nearly all insurers provide flexible payment plans that allow policyholders to spread the premium. However, a few companies would require large initial payment and spread the rest in installment. This first payment is called down payment. On the other hand, some companies do refer to their policies as no down payment auto insurance policies because you can pay the first month’s premium at the beginning of the policy that will act as a down payment and start the policy. In other words, you don’t put large sums of money down at the start but pay for the first month “time on risk” in advance.
Following the same logic, they may be called as no deposit car insurance as well. You can probably see the point as you are not putting down a deposit but paying the monthly premium in advance. If you just pay the first month’s rent in advance and don’t put any deposit down you can call your rental agreement as no deposit rental.
Whichever way you look at it you have to put some money down to start a policy. No insurance company will put you on risk without receiving payment. They just wouldn’t do it because it doesn’t make business sense. And it may not be ethical even if they want to do it as most state laws require proof of insurance to show policy is in effect which refers to payment for services.
The number of different terms used by insurers can confuse policyholders. This can be further confused if you move from one state to another, as different states have different laws and regulations surrounding automobile insurance. Be aware of the different terms that insurers use to describe the different aspects of vehicle insurance. And know that their payment terms can help you pay the premium easier or save money.
No Down Payment Car Insurance Companies
You won’t find many insurers who are happy to let you pay the way you want. If you have an excellent credit record some reputable companies may agree to offer you monthly payment option with low down payment. Otherwise, you need to look at non-standard auto insurance companies to get what you want and they are usually more expensive. Why not get a few non-binding quotes right here and see if you can save money and yet spread the premium.
You need to get quotes and check payment options in the same time because companies often change their products and payment options. Besides, you need to compare prices before you buy your coverage. You don’t want to end up paying double the premium because an insurer lets you pay monthly with no deposit.
Low Down Payment Car Insurance
Companies usually find a way to charge you for the favors they appear to do. For example, nearly every insurer charges an installment fee or interest for spreading the premium and require this fee at the start if they were to allow a monthly premium payment plan. Furthermore, companies who offer low down payment vehicle insurance plans are usually more expensive. That means they have already loaded their premium quotes to compensate for not taking larger deposit.
Probably the correct name for policies that don’t appear to be charging larger initial premium is low down payment auto insurance. Perhaps, it is misleading to refer to such policies as no down payment car insurance. And technically it would be the name for policies that accept lower than usual (low) down payment too.
If you cannot pay the premium upfront in full, most insurers offer various installment plans. Few companies may forego larger first payment in the installment and just ask for advanced payments each month. The low down payment can differ between insurers. Generally these agreements are essentially monthly payment plans with at least one month payment acting as the deposit. You can also divide your premium into several installments as this may have cheaper fees.
Low Deposit Car Insurance
Again, this is another marketing term and often refers to a policy that allows you to get an automobile insurance policy with a payment that represents a percentage of the total policy. This percentage can vary from state to state and with every insurer. However if you are required to have an SR-22 which guarantees financial responsibility, most insurers will expect a higher down payment for car insurance.
Probably one important point to note is that you need to have good credit history to be eligible for such plans. It is technically a loan arrangement in which the insurer allows the spreading of the premium that is due at the start. Also, it is highly likely that you will be required to set up an automatic payment plan from your checking account. Furthermore, such carriers with small down payment would most likely cancel automobile insurance after a missed payment without further notice. Rightfully so, if they don’t hold a deposit. You will probably be required to pay the full outstanding premium if you want to re-instate auto insurance policy.
Monthly Car Insurance
This is one of the most often used term for premium payment. This may seem confusing to some because quotes and policies are often quoted in monthly terms or in six-month or annual amounts. A monthly payment breakdown on a quote is first and foremost to show you as a policyholder what your auto insurance per month cost will be. Yet, often you can opt to pay for your premium in full up front by cheque or online. Some insurers offer about five percent discounts for full upfront payment.
So remember that monthly car insurance quotes do not always refer to an actual payment arrangement but rather to an easy breakdown for comparative purposes in quoting. Be sure to check the policy and payment options when choosing a policy.
Monthly Auto Insurance
Different from the first type of payment options, this refers to those few companies that offer pay-as-you-go option that has become so popular in other industries such as cell phones. Pay as you go vehicle insurance still requires a monthly ‘base amount’ in your premium, but offers the second part of the premium to be tallied based on the rate by the insurer and the amount of miles that you drive during the previous month. In this way it can sometimes be called pay as you go monthly car insurance.
The terms in this article do not reflect the myriad of ways that you can actually make your monthly payments which can include: direct debit, credit card, cheque, online payments and others depending on the insurer. If you are looking for these types of policies you can get online quotes at CheapAutoInsurance.net.