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Monthly Car Insurance Pros and Cons

Monthly car insurance pros and cons both exist. The option of being able to go month to month on auto insurance does have some significant advantages; but there are some potential drawbacks to it as well, and potential monthly policy holders need to recognize both the ups and downs if they are to get the right handle on their policy and make the choice that's right for them. Certainly it is great to know that this is an option we have available to us; but on the other hand, it is something that as consumers we need to study in a bit more depth before we can dive right into a monthly policy.

Advantages of Monthly Car Insurance

With many household budgets essentially month to month in and of themselves, the prospect of having to pay a large upfront premium on your next policy period probably doesn't sound all that pleasant without some kind of help paying for insurance. The thought of paying for twelve, six, or even three months' worth of a premium all at once makes the idea of monthly payments seem like a great way to create a little breathing room in the budget and keep some cash in hand. Drivers who feel this way should certainly give some thought to switching to month to month car insurance, and consider all of the implications both now and down the road before they make any kind of decision on the matter.

Naturally, one of the greatest advantages to monthly car insurance is the fact that it only requires a small down payment and small monthly payments. Paying up front for a whole houseful of drivers or for a high risk auto policy for six or twelve months worth of coverage can be financially straining on many of us, to say the least. Stretching that premium payment out over the entire course of the policy period is often the best way to go in these types of circumstances. For those of us who do not have the financial means ahead of time to pay the premium in full, this gives us a great way to stay insured and to keep up continuous coverage and protect our families and our vehicles.

Another great advantage is the simple fact that your money is going to work for you as soon as you spend it. This means a lot to those of us who seem to just barely scrape by each month and manage to make ends meet, but do not have a whole lot left over at the end of the month to show for all of our hard work. Avoiding that huge bill and being allowed to pay for it as you use it rather than all at once ahead of time gives you more time to come up with the money, increasing present cash flow and buying some wiggle room in the budget from month to month.

Disadvantages of Monthly Car Insurance

But just as there are multiple bright sides to making the choice to switch to a monthly auto insurance plan, there are also some potential downsides to it as well. Drivers who think about making the switch to a short term or monthly policy have to think about the long term ramifications of the move as well as the short term benefits. Consumers who are on monthly plans do have increased flexibility, but those who lock in to an entire year with a prepaid premium are likely to receive substantial discounts in their pricing for doing so. Paying the insurance premium in installments also means you'll be forking over money for installment fees. In most cases these fees are uniform across the board, meaning that paying for a policy in three installments leads to three installment fees while paying for it monthly gives you a dozen such convenience fees to pay for. Usually they are small fees to pay each month, but when they're multiplied by twelve it can really add up.

What drivers should do is calculate the total cost of a policy using both options and look at the difference in price quotes on car insurance. Having the flexibility and the extra time to pay for the overall premium is worth the extra price to some drivers, but maybe not to others. If there is a way to come up with the money at the outset of the coverage period, that is certainly something worth doing. By paying the premium ahead of time, we buy extra cash flow for the other eleven months of the year. So, it is a matter of thinking about priority and the feasibility of getting that much money together in the first place.

To get a sense of the payments you'd be looking at, consider the monthly car insurance pros and cons and then get quotes using our free quote form and find your best deal.


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