We all know that we have to shop around, keep a good driving record and ask around for discounts if we want a cheap car insurance premium. This article will show you two less popular ways you can save money on car insurance.
Even the smallest lapse in coverage would waive your right to a plethora of discounts. Regardless of how much time you have been insured with the same carrier, you will be regarded as a new customer if you let your coverage lapse for as little as one day. It’s imperative to pay your bills on time if you want cheap insurance – and who doesn’t?
Keep in mind that a lot of companies offer a grace period – a short time frame, usually between seven and thirty days, in which you will still count as insured even if you haven’t paid your bill and renewed the policy. However, this will only cover you in case of an accident and not provide you with the other of the benefits.
Forgetting about renewing your policy doesn’t count as valid excuse. The insurer will literally flood you with warning and reminder letters long before the policy is about to lapse, so it’s quite impossible not to notice any of those mails.
Some states require continuous coverage, so you may end up with your license suspended if you fail to renew your policy as soon as possible. Moreover, you will get a fine from the DMV in the range of $150 for the first uninsured month plus $10 per day for all subsequent days. Driving without insurance is a criminal offense in most states and you can face jail time and/or harsh fines if you are caught.
Opting to break up the bill may ease the strains on your budget, but is not the cheapest solution. Insurers will charge a nominal fee of around $10 per installment and, depending on the payment option you have chosen, you may have to pay further commissions and charges. Insurance companies, for instance, may bill you around $5 per check if you are going to mail in the payment. Twelve checks mailed in, following this example, would incur another $180 per year, next to the value of the policy itself.
Do not go with half-year policies either. Even though you aren’t paying that much money upfront, two six-month policies are about 20% more expensive than a full year one. Moreover, if you sign a contract for a whole year and file a claim that would incur a surcharge, the insurer can only raise your premium one year later, upon the policy renewal.
If you really cannot afford to pay for a whole year upfront, bill the expenses against a low-APR credit card and pay it off as soon as possible. You should be saving some money with an APR in the range of 15%.