State governments have made it mandatory for drivers of vehicles, to have auto insurance, which, not too surprisingly, is an added expense that is difficult or problematic for some people to come up with every month, let alone, to make the entire payment in full. Nowadays, auto insurance policies cover either six months or a full year, to which virtually every auto insurance company gives you the option of paying in full, or paying for your auto insurance, monthly. For some people, no matter what, the option of paying in full just isn't a viable option for them, which is quite unfortunate, because the difference in how much you pay in a year for auto insurance, depending upon whether you opt for monthly or for yearly, is often highly significant.
Even though auto insurance companies do provide the consumer with a choice as to how they can make their payment, and clearly disclose those options, it is amazing how few people that really need to save money, pay attention to these numbers. For instance, depending upon the State that you live in and the auto insurance company that you deal with, the savings for the consumer in paying in full can easily exceed a 20% differential in pricing, or even higher. This amount of money that could be saved is significant, and there simply isn't any investment that would be able to recover those extra monies lost by not paying in full.
This then leads to the real question, which is, because auto insurance is mandatory and by virtue of the fact that you have a vehicle which you drive, demonstrating its material worth to your life, you would think with the potential savings of $200, $300, $500 or even more, depending upon who and what is covered by your auto insurance, that it would behoove you to come up with the money to pay the auto insurance in full, yet so many people do not, because they claim, rightly or not, that they simply do not have the money to do so. Yet, massive monetary discounts turned down, turn into extra expenses that will hurt the bankroll of people that are struggling thereby month to month.
From an auto insurance perspective, they prefer consumers that pay monthly, because they quite obviously are more profitable consumers for the auto insurer, signifying that when a consumer is given financial options, almost always, one option is clearly more beneficial for the auto insurance company, and therefore these offers are definitely not equal or equivalent to one another, so a consumer should at least, at a minimum, recognize this, and try, if possible to make the better choice.
While commercials try to sell the illusion that your auto insurance company is "like a good neighbor", quite frankly, you should not lose focus on the fact that the auto insurance people, neighborly or not, are in the business of making money, and that, no matter how they dress it up, means that you and they sit on opposite sides of the table. Consumers that are on tight budgets need to make sure that they aren't paying for extra coverage that they don't really need in the first place, and should endeavor in cases where the monetary differential is large, pay their insurance in full, so as to free up their hard-earned money for other things needed or desired.