The Pros and Cons of Low-Cost Car Insurance Payments

Although the thought of low-cost car insurance payments may initially seem appealing, some motorists find that the initial attraction of cheaper prices is often outweighed by ineffective cover, policy restrictions and poor standards of service. If a deal looks to good to be true, it’s always important to look a little further into the terms and conditions of a policy before actually committing to it.

Pros

Motorists who are already paying an unreasonably high price for car insurance will immediately benefit from lower monthly or annual payments. If a current insurer doesn’t allow for monthly payments, some households will find it much easier to budget more effectively if installments can be used elsewhere.

Some companies will offer low or zero down payments when a policy is taken out and this is also an attractive proposition. This will be especially appealing to low income families or those with financial difficulties. For many motorists, these deals will simply be a way of getting on the road quicker in times of financial hardship.

Cons

Perhaps the biggest problem with low-cost down payments is the fact that monthly payments will increase accordingly. At the end of the day, a policy will still need to be paid for in it’s entirety and if an insurance carrier doesn’t make their money at the start of a policy, they need to reclaim it elsewhere. Although the initial low payments might help a little, high monthly payments will simply put low income drivers under considerable pressure at a later date.

When this is the case, try to opt for a company that doesn’t charge interest on monthly payments. Although the full price of a policy must still be paid, at least there won’t be any additional payments to worry about.

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