Most people are aware of the fact that you save money on your auto insurance policy by paying your premium in full. But the question is how much money do you save? Although that's not very hard to figure out. You be surprised how many people do not take the time to do the math, and figure out their total savings. It is very easy to calculate your own savings to see how much you save by paying in full, versus paying month-to-month. And it's very well worth looking into paying in full for your auto insurance policy because the savings in many cases are very significant.
This would probably be a very good time for many of you to take a close look at your auto insurance policy. Find out how much you could save yourself by paying in full. Many of you will receive an income tax refund in the next month or so. This makes for a perfect opportunity for you to save a significant amount of money.
Why is paying your policy in full such a good idea?
Because paying your policy in full is one major factor that can significantly reduce your insurance premium right away. There are several ways of saving money on your auto insurance policy. But almost all of them require at least a significant amount of time to pass. Paying in full is one way to save on your policy without having to wait for a while. You may need to save up a couple paychecks. Or, as I suggested, using your income tax refund is also a great way of coming up with a big chunk of money fast.
So back to the original question. How much do I actually save on an insurance policy by paying in full?
Last year, I did a case study involving several of my major auto insurance carriers. I looked at a lot of the past auto insurance quotes I had ran, and compared what the savings would be by paying in full as opposed to paying month-to-month. Here are the results of that case study:
The overall total average the driver saved a lot of insurance by paying their policy in full as opposed to paying month-to-month was 17.6%!
Of the companies used in this study, the company that offer the lowest savings was 9.5%.
The company that offers the highest savings was 28.3%. This is why it's so important to pay your policy in full if it all possible. That is a very significant amount of savings
I can't afford to pay my policy in full. Are there any other options that could help me save money right away?
I realize that paying six or twelve months in full can be a big chunk of money for many people. However for those of you who can not come up with a big chunk like that at one time, another option would be to set up automatic bank withdrawals. Instead of you having to make a payment every month, you can have the premium automatically taken out of your checking account. Although this doesn't provide as much savings as paying the policy in full, with some companies savings is roughly half of that, which is significant. And once again, companies vary on how much savings they offer for automatic bank withdrawals, just like they vary for savings applied when you pay in full.
And one last thing. Keep in mind that this savings you get from paying your policy in full is not just limited to auto insurance. This also applies to many other types of insurance. For example: commercial auto insurance, motorcycle insurance, boat insurance, golf cart insurance, homeowners insurance etc. The savings show up all across the board when you pay your policy in full. And if your policy is up for renewal anytime soon, that would be a great time to consider paying your policy in full.
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Dan Lyles is an Independent Insurance Agent serving Ohio, Indiana, Michigan, Pennsylvania, Virginia and West Virginia..