Pay as You Go car insurance?
If you're anything like me, you're probably a little too good at finding excuses to avoid doing things. From cleaning the house to working out, I always come up with a million reasons why I can put it off for just one more day. And when it comes to my car insurance? Well, I don't have any excuses not to get that done every month.
The sooner you find a good rate for your auto insurance and set up a payment plan, the less likely you are to forget about paying. Plus, if you haven't been saving up for insurance like you need to, it's not exactly easy finding a good price. The point is that it makes a lot of sense to hold off on making payments until you can pay them off in full.
But this time of year is CRAZY. The weather is great, but everyone's buying gifts and going on trips. That means that many people are paying for their car insurance with Pay-as-You-Go (PAYG). PAYG is a good idea for many drivers. And you can get it pretty cheap. But it's not the best option for everyone. Here's why:
If you're buying insurance quickly, your annual premium will more than likely go up. Instead of paying multiple premiums at once, you end up paying a little each month towards your insurance payment.
It's not just about how much you can pay off the first time either. You load up on credit-card debt, or apply for loans that could come with higher interest rates than what you're currently paying, and may end up paying MORE in the long run.
Why PAYG is NOT the best option for everyone:
If you're paying your car insurance with PAYG (and you shouldn't), it's important to know that you can get a better rate by choosing to pay in full every month.
Not only will your premium go down, but your credit score will improve because you'll be building equity in something tangible. You're also more likely to save up for your goal because paying for extra insurance isn't the first thing on the list.
So, what are my options? There are many different types of auto insurance, and each one has advantages over the other. Here are a few things to look at before going with one option over another:
Credit Rating . Many insurers will give you a discount on your auto insurance if your credit score is above a certain number. These discounts can be anywhere from 5% to 15% off.
Did you know that some auto insurers even reward safe drivers with discounts for not having an accident or a ticket in the last 3 years? The more driving experience, the better; car insurance rates typically go down with age.
Where do they live? Believe it or not, if you live in an area known for accidents, like New York City, your car insurance is going to cost more than if you live in a place like Phoenix where drivers are much more likely to have an accident.
Types of Coverage : Car insurance is broken up into different types of coverage. There's liability coverage, which protects you and others from injuries as a result of an accident, and that's what comes on your policy. Collision coverage, or PIP ( Personal Injury Protection), pays for the medical bills and other expenses related to injuries during an accident. And then there's medical payments, which helps you cover the cost of treatment for people injured in car accidents.
Did you know that there are differences between the two types? A healthy 6 year old child is under 100% liability only, while a 65 year old man who has rheumatoid arthritis is likely to be under 100% PIP only.
Chances are, you'll need more than just liability insurance. Make sure you look into all of your options before buying auto insurance.
What is the point of PAYG? The point of PAYG is to allow customers to pay for their car insurance in smaller monthly payments instead of a single lump sum payment at the beginning of the year.
This practice helps people who can't afford a full payment up front by giving them the option to pay multiple months at once. Many people purchase their cars and car insurance as soon as they have the money, which isn't always convenient for everyone. PAYG car insurance helps to make it easier for drivers that need cheap auto insurance but can't pay a full premium all at once.
How do I get the best rate? A lot of people don't like to sit around and wait for something to happen. They want it when they want it, even if they can't afford it. This is where auto insurance gets a bad rap because so many people fail to protect themselves financially when they need car insurance. Lifestyle changes are the best way to save money on your auto insurance premiums.
The truth is that there are multiple ways you can pay for your monthly bill, but if you're looking for the lowest possible rate, we'd suggest finding a reputable insurance agent in your area and have them do all of the hard work for you. You can ask agents for quotes and then compare them to other companies to find the best overall value.
It's also a good idea to shop around for auto insurance if you're getting a new car. The value of your car can affect the cost of your premiums, and in some cases, you may be better off paying cash for your car and taking the bus or train.
Are there any other options? When it comes down to it, there's never just one way to pay for something, so when it comes to PAYG insurance, you've got options. To get the cheapest rates possible, target insurance for lower-risk drivers who only make one or two trips per month to work.
Another good option is to apply for a low-interest loan from your bank. Just make sure you repay your loan quickly before you accumulate too much credit card debt.
The biggest mistake people make when buying car insurance is believing that they have to pay their premiums all at once . This isn't always true at all, and it's not always going to be the best idea for everyone. Before you settle on any one option, contact an agent and ask them about their discounts in your area, then compare prices of every single provider until you find the best deal for your needs.
Life happens, and it's important to take the time to educate yourself about the different options available to you so that you can make informed decisions before making major purchases. Auto insurance isn't a necessity for everyone, but when it comes to your wallet, a little common sense can go a long way.
About the Author
Johnathan Noel is a freelance writer currently working on his first book, The Complete Guide to Car Insurance. He has worked as both an accountant and financial consultant in the past, but nowadays spends most of his time writing about financial topics. You can follow him on Twitter at @j_c_noel if you're interested in learning more about his work as well as many other financial topics.
Conclusion
In short, there are numerous options to pay for your premiums. It is important to analyze the costs and benefits of each one before signing on the dotted line. We hope this article has been enlightening and informative! Good luck in the future. Thank you for reading. Please share and leave a comment below!
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Why Car Insurance is So Important by Zach Savich on Friday, January 30, 2017 These days, most drivers understand the importance of car insurance. If you're like most people, you've probably got some sort of coverage already, even if it's just part of a bundle policy from your bank or credit union.