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What is the Average Amount of an Auto Insurance Down Payment

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A person who is looking for coverage may be wondering about the average amount of an auto insurance down payment. There is no fixed amount that a new policyholder will need to pay to get coverage. Some auto insurance companies will issue a new policy without the driver having to make a down payment. You would simply pay for the first month’s coverage when you buy the policy.

Payment Options for Auto Insurance Coverage

Each auto insurance provider determines its payment options independently. When you are shopping for coverage, you will want to consider whether the company you are considering offers a plan which fits your needs and budget. The following are examples of payment options which may be offered by an insurance company:

  • Pay the full amount of your premium on the policy effective date
  • Pay one-third of the premium on the policy effective date, the second third 30 days later, and the balance within sixty days
  • Premium payments can also be made in three installments where the first quarter is paid on the policy effective date, the second quarter is paid within 30 days, and the balance is paid within six months of the policy effective date
  • Policyholders can also choose to pay one quarter of their premium every three months

Pay Auto Insurance Premiums Monthly

Some auto insurance providers allow their policyholders to pay premiums on a monthly basis. The funds would be automatically deducted from the policyholder’s checking account on a specific date each month. Depending on the company, the policyholder may be required to make a one-month down payment to qualify for this option.

If you are interested in paying for your auto insurance coverage on a monthly basis, you will only be able to sign up for this option at the time the policy is issued or when it is being renewed. In a situation where you currently have coverage in place, you will need to wait until close to the end of the term to request that your payment method be switched to a monthly one.

While payment for auto insurance coverage on a monthly basis is a convenient option for policyholders, keep in mind that the company may charge an administrative fee because of the increased cost in processing several payments throughout the coverage term.

Be sure to ask what the total cost of insurance will be if you are considering paying monthly. You will need to decide whether the convenience of paying a portion of your premium each month is worthwhile if your overall coverage costs are more expensive.

Payment methods are just one item you need to consider when choosing an auto insurance company. Your ideal auto insurance provider will be able to give you a good level of protection at an affordable price. Good customer service practices are also important, since you will want to be sure you are dealing with a company which will answer your questions promptly and settle a claim in a fair manner.

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