The Truth About Month-to-month Car Insurance
Knowing this, you might wonder if there are any real advantages to purchasing this
type of car insurance, other than the ability to make lower monthly payments. In truth, there aren't. What's more, when you compare auto insurance side-by-side it turns out that month-to-month car insurance isn't even the cheapest car insurance you can get. Paying for your policy through installments over a six or 12-month period actually ends up being more money than if you simply paid the entire cost of the policy at the start of its term.Who Benefits from Month-To-Month Car Insurance
It's obvious there are some people who benefit from this type of insurance otherwise it wouldn't be sold. Consumers most likely to purchase a month-to-month policy are those who have limited incomes and driving old vehicles that don't require collision and comprehensive insurance. Monthly policies appeal to drivers in this category because you can get them for less than $100 a month in many cases. For someone who cannot afford to come up with $450 or $500 all at once, paying $75 per month is inviting.
There Is a Better Way
If you really want cheap auto insurance at the best possible price there is a better way than going with a month-to-month policy. It involves being a careful consumer willing to compare auto insurance policies and pay cash on the barrel head. The first thing you need to do is figure out how much you're paying for every six month policy term and what coverage you're getting for it. Then shop around among other companies to get their prices for the exact same coverage.
Once you know which companies offer the best deal you then want to know how much you'll pay if you make a single payment rather than using installments. As an example, if the total price of your policy is $500 with a single payment and $600 when you use installments, you're actually paying 20% more for the privilege of making installments. Instead, why not spend the next few months putting away any extra money you have in a savings account so that when it comes time to renew your policy you can make a single payment up front?
The first payment is the hardest because it requires you to sacrifice a little of your disposable income. But after that it's easy. All the money you would normally be spending on your monthly insurance payment goes in your savings account in anticipation of your policy renewal. That's how you get cheap car insurance.
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