Using Cash with Auto Insurance | Cheap Car Insurance

It is no secret with the low interest rates in the US and most nations. With the lack of strength in the international financial system it is very likely we will not likely see a pickup in the rate of return we generate with our liquid funds. As we handle our finances how should we look to deal with the payments we generate on our car insurance? Depending on our financial position we will all have a distinct approach to what the appropriate solution is. We will touch on the different approaches and additional tips to make the most effective use of your capital when seeking to purchase and renew your auto insurance.

The Right Details

The primary choice we will need to make is how should we handle the constant cost of our automobile coverage? Should we hold onto our funds and make month-to-month expenditures with no down payment on auto insurance? Is it better to shell out our complete 6 month car insurance in one disbursement? Are there other options we should take into account? The starting point should be viewing if we have enough cash in our bank account to handle a 6 month car insurance transaction. This would mean on an typical 6 month plan having to pay around $375 in one payment. If all of us don?t possess this extra cash it is a simple choice to setup monthly payments on our car insurance.

Advantages of Cash Payments Every 6 Months

If we are able to deal with paying a full 6 month transaction will it make sense from a money management standpoint to do this? The initial position supporting spending in full is the discounts car insurers provide through paying out funds up front. The savings will vary depending on the state you live as well as which insurance company you?re protected by, but most can see price savings of 5% and in some circumstances up to 10%. The additional thought is what you can earn on your funds if you choose to pay in monthly installments. Since the Certificate of deposit prices at a financial institution are so minimal it is an easy option, should you take the 5% savings or the 1% you can earn on a 1 year CD. Paying the full 6 months at once will also relieve virtually any issues coming from missing out on monthly payments. Some insurance providers will charge late fees if you are late on your month-to-month car insurance obligations.

Extra Cash use Tip

Are there any other ways to improve the way we handle cash with our car insurance obligations? Since interest rates are so reduced it is a great time to think about looking to spend your insurance expenses for a longer period of time. Some automobile insurance companies allow you to setup a 12 month plan. With the longer period there is a possibility of receiving higher discounts by paying at once, several insurance companies may discount as much as 10%. The warning is to make sure these types of prolonged plans stay very competitive priced to shorter term polices.

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