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Monthly or annual car insurance?

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A monthly or annual car insurance payment? This choice depends on many factors that we explain below.

Monthly auto insurance premium

The monthly car insurance payment?

The monthly payment car insurance premium consists of dividing the amount into twelve equal monthly payments. Most of the time, it is always debited from your bank account on the same date. You will, therefore, need to provide your insurer with your bank details up to date.

This is the most common type of insurance premium payment used by insurers. But it is not an obligation. It is a facility granted to you.

The advantages of monthly car insurance payments?

The first advantage of the monthly contribution? The cost of your car insurance is spread over the year. This makes it easier to fit it into a budget, especially if you have limited means, little savings, and are used to paying your taxes, electricity, or monthly health insurance.

This facility is particularly interesting for the following profiles:

Young drivers who have to pay a high premium because of their inexperience.

Abused, canceled, or damaged drivers who also have to pay a large amount for insurance. This amount can be up to more than $1,000 depending on the case.

Driver with a small budget who cannot afford to pay a large sum at once.

The disadvantages of monthly car insurance payments?

There seem to be few disadvantages to paying the monthly fee. Except that the vast majority of insurers apply additional fees. This means that you will pay 5 to 8% more for your auto insurance with equal coverage than a driver who pays his or her premium on an annual basis. This is due to the different costs incurred by organizations. You should know that when your contract expires, you can opt for the annual fee.

Another disadvantage? Some insurers still require the payment of two to three months’ premium in one lump sum after subscription. Monthly payments may therefore not be very attractive in the first year. It’s up to you to compare insurance companies to find the one that offers the most attractive monthly payment terms.

The annual premium for car insurance

What is an annual membership fee?

The annual payment is due at the time you take out the contract and on each anniversary date if you decide to renew it in subsequent years. Several payment methods are possible: credit card, cheque, or automatic withdrawal on the due date. The latter is the simplest, in that you don’t risk forgetting to pay the bill.

What are the advantages of the annual membership fee?

What is the main advantage of the annual fee? It allows you to save on your auto insurance compared to the monthly payment. Depending on the insurer, it is 5 to 8% lower on the bill.

You also have more freedom of mind by paying in one payment. In particular, you don’t run the risk of having your monthly payment rejected, which often results in bank charges and penalties applied by your insurance.

What are the disadvantages of the annual fee?

The annual membership fee is a payment method that requires you to have enough money to pay in one lump sum. If the fee is small – a few hundred euros – this is often not a problem. All the more so if you have money set aside for this due date.

On the other hand, if you have to pay a large sum, it can be more complicated.

This is the case for the following driver profiles:

The so-called “at-risk” profile: driver terminated by his insurance, malicious, or have had several claims. Knowing that in these cases, surcharges can be as high as 400%. Some policyholders, therefore, find themselves having to pay sums that can sometimes reach several thousand euros depending on the case and the vehicle’s engine.

Young drivers who have to pay an additional premium and who often have little financial means.

To a lesser extent, owners of large cars or classic cars that are very expensive to insure. Although they can usually afford to make a one-off payment.

How long does it take to pay the annual car insurance premium?

Monthly or annual car insurance premiums?

The annual premium is payable ten days after the expiry date of your contract. If you do not pay within this period, your insurer will send you a letter of formal notice. You then have thirty days to pay for it. If you don’t, your coverage is suspended. You are no longer covered. You have ten more days to pay your debt. Otherwise, your insurer will cancel your contract and demand payment of the full premium.

This is not a problem for the monthly premium, in that it is paid automatically. However, if the payment is refused by your bank, the same rule applies. And if you have several consecutive payment incidents, it is not certain that your insurer will want to keep you among its clients.

The quarterly car insurance payment: an exception?

Few insurers offer quarterly payment of premiums. This can be done for temporary insurances if you insure a vehicle for a few months. For a medium-term rental, for example.

How to read the schedule of your car insurance contract?

The schedule for your car insurance is sent to you at the same time as your due date notice. Please note that automobile insurance is a tacit renewal contract, which means that if you do not cancel your contract, it is automatically renewed. It contains the following information:

  • Your contact information and that of the insurer.
  • Your contract number and your bonus-malus.
  • The expiry date of the contract.
  • The method of payment: monthly or annual withdrawal.
  • Details of contributions including taxes and natural disaster coverage.
  • The total amount to be paid.
  • If you are monthly, the exact date of each withdrawal and its amount.

This notice must be sent to you between three months and 15 days before the expiry date of your contract. Please note: the notice does not necessarily have to appear in your insurer’s mail. You must, therefore, open all the organization’s mail, even if it has an advertising appearance.