Getting Cheap Month-to-Month Car Insurance

Cheap month-to-month car insurance (pay as you go) is easy to come by these days thanks to the efforts of insurance companies that are adapting to changing economic times and demographics. Most of the country’s major providers offer some sort of month-to-month policy options; some offer multiple options. One of these policies might be right for you if you can’t afford a top-of-the-line policy for your car.

Before getting into the details we should mention that the “month-to-month” designation is applied to two different types of car insurance. The first is a temporary policy you don’t intend to keep in force for a long period of time. The second type is a standard long-term policy that you’ll be paying for every month, rather than in one large chunk or in quarterly installments. It’s vital to understand the difference between these two types of policies before you start shopping for cheap month-to-month car insurance.

Temporary Insurance Policies

A temporary insurance policy is one you might take out under one of the following circumstances:

• you’re a college student only in need of coverage while you’re living on campus
• you have friends or family members who will be using your uninsured vehicle during an extended stay
• you’re borrowing an uninsured vehicle from a friend until such time as you can purchase your own
• you’re insuring a car you only intend to drive during the winter season

The important thing to remember about temporary month-to-month car insurance policies is that they are not designed to be carried for long periods of time. Most companies that offer temporary insurance do so in one, three, or six month increments; you can usually pay one month at a time even if you’re getting a six-month policy. However, because month-to-month car insurance tends to be fairly inexpensive, insurance companies usually will not allow a policy to continue for more than six consecutive months. They do so as a means of preventing enterprising car owners gaming the system.

Permanent Car Insurance Policies

Permanent car insurance policies that allow you to pay premiums once a month are also known as month-to-month insurance. You can find the cheapest car insurance policies of this type by engaging in some comparative shopping. Just as you would with an annual insurance policy, you need to compare the types of coverage being offered, how much each coverage is costing you, what your deductibles will be, and what extras are available to be added.

Keep in mind that even though cheap month-to-month car insurance does exist, it’s never going to be as cheap as purchasing an annual policy and paying for it upfront. Insurance companies purposely give annual customers a better rate as a way of encouraging them to continue purchasing their policies this way. If you can manage to put away the money necessary to buy your insurance annually you could save as much as 20% to 30% per year.

If saving up that much money is not an option for you right now, you might consider putting a down payment on your policy at the time you sign up. This will result in lower monthly premiums and less money paid overall. Conversely, a month-to-month car insurance policy with no down payment is going to be your most expensive option.

Whatever you do, avoid the temptation of making your monthly payments using a credit card unless you have the cash on hand to pay the bill when it comes due. Otherwise, the exorbitant amount of interest you pay on credit card debt will more than destroy any savings you’re getting from a cheap car insurance policy.

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