Paying your car insurance can be a bit of a nuanced task. There are different things to keep in mind, such as how much to pay and how often. But at the same time you don’t want to stretch yourself too thin or break the bank just because of a shortsighted premium payment. Before we go into the specifics of your bill and why it’s better to pay it one way versus another, here’s a couple of tips to lowering your dues.
First, Decide That You've Found the Right Provider
Before you decide on an insurance provider, or continue with the insurance policy you currently have, it may be smarter to shop around a little. Online tools and platforms like CoverHound lets you easily shop and compare monthly car insurance costs between reputable insurers. And these costs can differ on a number of factors – the weather, the number of accidents in your city and state, state laws and economy, and even what time of year you decide to buy.
Get the Details on Discounts
Discounts are a pretty good way to help lower your bill – alongside cutting unnecessary coverage.
Inquire about Low-Mileage Discounts: Short of getting short-term coverage, the best way you can utilize your weekly commute mileage is sharing the data with your insurer. If you have a short weekly commute, you could potentially get a nifty little discount for what is mathematically a reduced risk of accidents.
Ask About Getting a Prompt Payment Discount: If you’re diligent with your mail, chances are you can catch your next insurance bill as soon as possible – if you pay it off quickly, you could be eligible for receiving a prompt pay discount.
Your Child Won’t Cost a Full Policy: If you have a teen driver in the home, then he or she may already be covered by your policy legally, depending on the company and the state. Some states don’t let insurance companies take policies on teen drivers, until they have their own license. A learner’s permit doesn’t automatically count as a license.
Group Discounts Can Also Help: If you happen to work within government, as part of the local volunteering team, or if you’re a veteran, you may be able to get a group discount if you inquire for one.
Ask for Their No-Claim Policy: Another discount an insurance company may be dealing out is the no-claim discount. This discount goes in effect after a certain period of time, based on having a history of no accidents – and thus, no insurance claims.
The Same Goes for Tickets: Insurance companies will be quick to raise your premiums when you do get a ticket for a traffic violation – but they’re less savvy on your ticket standings when it comes to lowering your premiums afterwards. Once a parking ticket falls off your record, contact your insurance provider.
Consider How You're Going to Go About Paying Your Dues
Once you have an insurance company in order, it’s time to tackle billing. Usually, long-term plans are either paid off as annual car insurance, or monthly car insurance. Whichever is more convenient depends on a few factors, including your budget and satisfaction with the company.
The Case for an Annual Plan: The biggest argument for an annual payment plan is simple – it’s cheaper in the long-run. A higher initial cost beats a number of smaller costs in the total, with the downside that, well, it’s a higher initial cost. If you can’t afford going for the annual plan, then obviously it’s not the choice for you.
Going Monthly Instead: Monthly payments may end up costing you more in the long-run, but they’re more affordable as well. Aside from that, the other benefit to monthly costs is that, if you ever find a better deal and want to cancel your coverage, you can do so after a month, or two, or three, without having to feel like you’re obligated to see the contract through to its annual entirety because you didn’t have to pay the entire year at once.
Both sides have their merits, depending on whether you’re looking for flexibility or the cheapest outcome.