Car Insurance on the Installment Plan

Department of Insurance rules require all automobile insurance
companies to accept premium payments in installments. However, some
insurers offer the installment payment plans through their associate
finance companies in which case you are generally forced to pay high
rates of interest.

Clearly, shopping for car insurance smart infers that you shouldn't
just seek and settle for low rates but also do your math on
identifying low-cost financing. You can do this by simply asking who
is providing your installment plan. There are insurance companies that
proudly offer their own equated monthly payment plans. Whatever that
be, make sure of things such as the outright down payment, the number
of installments, interest charges, service charges, if there are any
hidden charges and the final amount of monthly installment. But before
you get insurance quotes with installment payment plan from any
company, make sure you get everything about the plan in clear writing.

Asking for payment break-ups in writing is a way of committing the
insurers to freeze your installments for the entire term of validity
of the policy. Usually, when you do so, all possible charges which the
agents had deliberately hidden till then will have to surface up which
is to your advantage. Also you will not be in shock when you receive
the bill later.

In the present market, all auto insurers and finance companies have
their terms at least as good as follows:

* For a policy of one year's validity, the down payment will be 16.67%
and ten (10) equal installments payable monthly. If you have your
policy written through associations recognized by companies, then the
down payment will be 20% of the total.

* On similar lines a six-month policy will require a down payment of
33.33%, and four equal payments payable monthly.

While the above is the stipulation, some insurers and finance
companies are willing to offer smaller than what is stipulated down
payment and are not so rigid on the term side too. However, an
insurance company is at right to add a service charge to your payment,
but make sure everything is crystal clear in black and white before
you sign on the dotted line. Here is an indication of the basic
service charge that can be levied - $3 per month, and the company is
also at its legal liberty to add 50 cents for every $250 (or fraction)
of premium paid over $500.

Alevoor Rajagopal, MBA, a business consultant, voices for fair
practices in carbargain.biz/insurance/carinsurance.html used car
deals.
He also writes passionately on showcasing individuality with