How Should I Pay For My Car Insurance?Mon, 23/01/2017
There are a number of ways that you can pay for your car insurance. Arguably the best way to pay for your car insurance would be with monthly instalments direct to the insurance provider, however there are several other options available. These include choosing to pay the annual cost of car insurance in one lump sum, or opting for monthly instalments from an interest-free credit card instead.
Paying your Car Insurance Upfront
To avoid any type of interest, there is always the option to pay the cost of annual car insurance upfront in one payment. Whilst this is the ‘cheapest’ option, it often requires months of saving to be able to comfortably part with a larger amount of cash. This is made even trickier if you have birthdays to save for, or perhaps if you’re still making up the pennies from Christmas. For this reason, many people choose monthly car insurance, splitting the cost over a period of 12 months. This makes for a much more manageable payment plan, supporting its growing popularity.
When it comes to cheap monthly car insurance, there are two options available to you. The first would be to sign up for a purchase credit card with an initial interest free period. The second option would be to pay monthly car insurance directly to your car insurance provider. Each of these has benefits, yet it’s the latter which arguably ensure peace of mind!
Paying Car Insurance Monthly With A Credit Card
As previously mentioned, you could also choose to pay the entire yearly car insurance bill in one payment using a purchase credit card which offers an initial interest-free period. This means you would then pay off the credit card bill in interest-free monthly instalments, therefore avoiding the interest rates that may be included by the motor insurer. These smaller monthly payments are arguably much more welcome that the larger sum of paying car insurance all in one expense. It’s worth bearing in mind that this option involves doing your research to find a suitable credit card, and then of course completing the necessary paperwork before your car insurance is due.
However, there is a major flaw in this seemingly smart payment plan. Whilst the interest-free period may seem like a good idea, if you fail to pay back the entire amount within the interest-free period in time, you will be hit with a jump in interest. This jump would be much more than what your insurance provider would have offered if you’d have chosen to pay monthly for car insurance directly with them. But, if you’re highly organised, not fazed by paperwork and have car insurance at the top of your priority list, then perhaps this is the option for you.
The Best Way To Pay For Car Insurance
This leads us onto the final option, paying for your car insurance with monthly payments to the insurance provider. Paying for car insurance on finance is only marginally more expensive than paying upfront. What’s more, once the costs have been agreed, there’s no hidden payments. This therefore differs from using an interest-free credit card as there’s no chance of being caught out later down the line. Instead, you can enjoy paying car insurance monthly, knowing that there’s no more paperwork or potential pitfall further down the line.
For more information on cheap monthly car insurance please don’t hesitate to get in touch and a member of our team will be able to help.