Even after finding the best deal on car insurance, you can still continue to save money. Most people I know pay their car insurance monthly, and that can cost more.
We get our car insurance through Progressive, they had the best price when we were looking around. They offer us 3 different options when renewing our insurance.
Option 1: Pay entire 6 months worth at once $220.00
Option 2: Initial payment of $50.51 and monthly automatic payments a checking account for 5 installments of $40.70 = $254.01
Option 3:6 installments paid by Internet, phone or mail of $50.51 each = $303.06
Obviously, Option 1 is the best scenario to save money, but most people can’t afford to pay it at once. The insurance companies must love that, lots of free money for them, your hard-earned money.
To be able to pay our insurance in full, I have had to set-up automatic transfers to our ING account (online savings) for this.
We do better with smaller amounts, so I divide the amount we need to pay by how many business days there usually are in 6 months, and then set-up daily transfers for the amount.
Example: Let’s use 4 weeks for each month x 6 months = 24 weeks x 5 business days = 120 micro-transfers
$220.00 divided by 120 = $1.84
So, if every Monday through Friday, we have $1.84 a day sent automatically to our ING account (which I named Car Insurance Fund), then we can pay our car insurance in full and reap the savings.
How much does it save?
By paying our car insurance in full opposed to the 6 installments of $50.51, we can save:
$83.06 in 6 months
$166.12 in 1 year
$332.24 in 2 years
$830.60 in 5 years
$1,661.20 in 10 years
$2,491.80 in 15 years
$3,322.40 in 20 years