While the length of the term generally doesn't affect your average cost (or base premium), a six-month policy will be cheaper because you'll pay for coverage over a shorter period of time. Six-month auto policies are standard for most insurance companies. You may find it difficult to find insurers that offer shorter or longer terms. Some car insurance companies offer discounts if you pay your car insurance premium in full rather than in monthly installments.
Paying the full amount of your car insurance premium might save you some money, but paying a lump sum may not be feasible if that puts a strain on your budget. Paying credit bills on time and keeping your debt balances low could strengthen your credit and help you qualify for better insurance quotes in the future. An insurance company can set their own fee amount, even if the installment fee is higher than what they are being charged to process their payment. Some insurance companies offer a discount on the full payment that can help make paying the premium as a lump sum more beneficial.
The same logic applies when switching your car insurance to another provider that offers a lower rate. This reimbursement process could create difficulties when making the first payment on a policy with a new auto insurance company. Buying a 12-month car insurance policy is better than buying a 6-month car insurance policy if you're a good driver with a clean driving record and the option is available to you. Remember that you must pay your bill in advance to get coverage, but the advance depends on your preferences and the insurance company's policies.
But if paying a large lump sum up front would put you in a difficult financial situation, such as not being able to afford your car insurance deductible, making monthly car insurance payments might be a better option for you. Most people pay in full or choose monthly installments, but your insurer may also offer quarterly payment plans, meaning you would pay every three months (four times a year). A 6-month auto insurance policy could also benefit drivers who will soon pay off a car loan, as well as those who improve their credit. Farmers comprehensive insurance covers windshields damaged by weather, vandalism and theft, among other things.
A six-month auto insurance policy is a policy that provides coverage for six months as long as you pay your premium. Twelve-month policies allow you to set your insurance rate for one year, which can delay potential increases in premiums. If you want to exclude coverage after paying off your car loan or increase the deductibles on an old car, you can do so sooner with a six-month car insurance policy compared to 12-month coverage.
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