Although there are flexible premium payment options that allow you to spread the cost, car insurance doesn’t start without an initial payment. The best you can hope for is to pay your premium monthly, in which case you may still need to pay a larger initial payment before the rest of the premium is spread over the remaining months. Even if the premiums are spread equally, installment fees may be added to the first month that makes it larger. Furthermore, you pay the premiums in advance so that the last payment may be made about a month before the renewal date.
Nearly all carriers provide flexible payment plans that allow policyholders to spread the cost. Usually, companies require larger initial payment for new customers and may allow established customers to renew with nearly equal monthly payments. Some companies and agents may advertise no down payment auto insurance but it is just a word play in most cases. If you respond to any such advertisements or content, you are most likely to find out that you will still have to pay some down payment in order to buy a policy. So, if you were looking to get vehicle insurance without putting down any money you would be disappointed.
Nearly all vehicle insurance companies charge a fee for deferring premium payments. Although it is a modest fee to cover bank charges and administration, some companies may charge more than others. So, it is worth checking how much more is added to your premium for wanting to pay in installments. Usually, monthly payment plans have the highest fees while you may pay a fairly low arrangement fee if you settle it in two or three installments.
Auto insurance companies make their preferences clear by offering on average 9% discount for paying the premium in full. Some companies may offer a bigger discount and others may not offer any discount for paying in full. So, if you can settle your premium at once, you might want to check which company offers the highest discount for it. You need to look at your quotes closely to find out the savings you can get.
Considering you lose a large pay-in-full discount and pay additional installment fee, you may end up paying over 10% more for vehicle insurance while you are trying to find a policy with the lowest initial payment. If you have no intention of cancelling your policy before the next renewal and can pay the premium at once, you may want to look at your options carefully.
The problem is that many motorists may not realize that they may be paying more when they choose to spread the costs and go for the option that requires them the lowest initial payment and allow them to spread the costs as it is a lot more comfortable for their budget.
Essentially, drivers can buy car insurance by just paying the first month’s premium in advance. In other words, you cannot start a policy with zero-payment. If any agent or company offers you a policy without any down payment, you should probably be very careful about the legitimacy of your coverage or any payment they collect under any other names.
Categorically, no legitimate automobile insurance company will sell a policy without receiving any down payment. Carriers accept to pay any claim the moment they or their agent send you confirmation of coverage. This coverage also confirms that policyholders meet their obligations to buy at least state required coverage. So, facilitating a driver with insurance without receiving any financial commitment isn’t logical to say the least and therefore, you need to be extra careful with any such deals. You should check to make sure that you are dealing with a licensed agent or company.