Drivers with bad credit never have it easy when it comes to paying for insurance cover. Insurance companies nowadays not not keen to provide no money down car insurance or pay once a month car insurance. For example, GEICO, Allstate, USAA etc are not likely to insure high risk drivers so they have to pay annual rates instead.
When you have poor FICO credit, it shows that you are likely to face difficulties in paying your bills on time. That is why auto insurance companies may not be offering you with insurance coverage with no money down. Another reason is because many drivers stopped their monthly payments after getting the insurance documents issued.
Some people have problems getting their vehicles insured on a monthly basis when they have poor driving records or abnormal claims history. When you have filed more than 1 accident claim over the past 2 years, some insurers may decide not to let you renew your coverage or only restrict you to pay annually car insurance plans.
When you are considered a high risk car insurance subject, you may find it difficult to sign up for month to month auto insurance coverage.
So why do most drivers prefer pay monthly auto insurance coverage with no deposit? Well, when he or she buys car insurance plans, they rather pay in several installments throughout the year instead of the entire year’s premiums up front. Even though you get some discounts because of the omission of monthly processing and collection fees, many car owners have budget constraints and do not want their money stuck with a insurer for 1 whole year.
Thus, month-to-month car insurance coverage with 30 day installment payments are more popular especially when there is no hassle to drop the coverage anytime they want. But actually, you can still get a full refund from your insurer regarding the up front paid premiums. However, this extra step is effective to prevent many consumers from switching auto insurance plans to another insurer with cheaper rates.
Note that pay monthly auto insurance tend to be more expensive compared to annual plans, although this can be offset by switching carriers whenever there is a new discount. On the other hand, you can get up to 20% discount by choosing to pay for annual premiums. So when you can afford to pay for annual car insurance plans, we recommend to do so with a reliable company with good customer service and easy claims processing.
For drivers who only wanted to drive for up to 1 month, it is more convenient to buy car insurance with no down payment. Many insurers allow you to start a new car insurance policy with a minimal 30 day premium paid. These are suitable when you need to extend the coverage by several days or weeks, simply call up and top up the extra premiums. Especially for some car owners with no stable income, no money down car insurance is actually the only way to drive legally with basic liability insurance.
So when poor driving records is causing you to lose the chance of buying low budget car insurance plans, learn the best way to join low risk drivers and car owners. If you cannot get no money down car insurance for bad credit, try to save up for a 6 month deposit as not all insurers insist on paying the full annual rates. Working to improve your FICO score and stop taking more bad credit personal loans may help.
Another new option is pay as you drive insurance plans now being tested in several states. This is a usage based car insurance plan where a speedometer and odometer are installed in your vehicle to track your number of miles driven and when you are using the vehicle. This allows very precise calculation of your insurance costs, and is supposed to result in a fairer way of billing car owners on their insurance requirements. Thus for PAYD pay-as-you-go auto insurance rates, how much to pay depends a lot on your annual mileage, and not so much based on your FICO score or driving records.
Now that we explained where no money down auto insurance plans can be useful versus their higher per day insurance cost, you can decide whether it is more suitable for your driving needs. For temporary driving coverage, we recommend to buy pay monthly auto insurance so that you can avoid letting the insurer hold 6 to 12 months of your money. You can also get proof of auto insurance coverage with just 1 month of fees.
Make sure to compare free car insurance quotes from major providers online or through a broker. Some specialize in providing quotes for drivers with bad credit. It is easy to compare month-to-month insurance plans online and find the best deals.