The Good and Bad of Low Down Payment Vehicle Insurance
The advantage that most consumers see from finding an auto insurance company who is willing to provide automobile coverage with a small up front start up cost is that individuals will not have to deep dig into pockets and pay the large amount a policy may cost if it is paid up front and in full. Paying for a down payment and continuing coverage by paying monthly payment is a lot more feasible for motorists.
Policy terms usually are in the 3, 6 12 month range which can be extremely expensive if paid in full. Having the option to pay on a month to month basis can make it much easier to maintain a policy. Paying monthly can also give consumers the freedom to shop around and swich carriers should they find a better deal elsewhere. If a person were to pay for coverage in full, they may have to cancel the policy and wait for a refund of the premium paid.
Locating coverage with a low down payment may be the best option for some motorists, but many should realize that there is also a down side of doing so. It is usually a lot cheaper to pay for a policy in full than to spread the payments out monthly. The majority of insurers will charge a monthly billing fee of around $10 a month that can end up costing an insured quite a bit of cold hard cash over the course of the term of the policy.
In a year an insured can pay fees of over a hundred dollars to a company that does not include coverage. In addition, many insurers will offer a significant discount to customers that pay a term in full. Not all consumers can afford to pay in full, but if feasible it may be worth considering. States offer tools such as the New Jersey auto insurance Purchasing Planner which can answer questions and help a driver decide what the best option may be for their particular situation.