By now, most people know that having good credit can help you to score lower rates on auto insurance since most insurance providers conduct at least a soft inquiry on your credit before providing you with a quote. However, there is another way in which you can use your good credit to help you save a ton of money on your auto insurance. Continue reading to learn more about how a little out-of-the-box thinking and a new credit card can result in substantial savings on your auto insurance needs.
What You Will Need In Order To Take Advantage Of This Opportunity
In order to utilize this particular money-saving tip, you will need a credit card that offers a 0% APR introductory rate. This will allow you to avoid paying interest while taking advantage of the opportunity to save money on your car insurance. To truly maximize savings you will want to choose a card that offers some form of cashback rewards or a welcome bonus as well. Choosing a card that comes with no annual fee will also help to ensure you are saving as much as possible. However, a low annual fee will not be enough to completely wipe out the savings you will enjoy.
How This Money-Saving Trick Works
Once you have your new credit card in hand you will want to start shopping around for auto insurance. Feel free to select any policy and coverage options that meet your needs. This trick works regardless of what level of insurance coverage you choose to purchase.
When you get to the point where you are ready to pay for your policy, you will be given a few different choices. These choices will typically be to pay for the policy in full, pay in two equal installments, or pay in monthly installments. People typically choose to pay in monthly installments because paying for the policy in full requires a substantial upfront investment. The problem with this is that insurance companies charge you more if you choose to pay in monthly installments. In fact, choosing to pay in full will often net a savings that is right around the amount you are going to pay every month if you choose the monthly installment plan. This is precisely why you are going to use your new credit card to cover the cost of paying for the policy in full.
The Savings Keep On Rolling In
At this point, you have already saved quite a bit just by choosing to pay for the policy in full. Since you chose a card with no interest, you can still make easy monthly payments while enjoying the lower overall cost. If you chose a card that also offers cashback rewards, you will continue to see the savings rolling in as these rewards hit your card. Best of all, you are now in a position where simply paying for your auto insurance needs on time each month will help you to continue improving your credit score, thanks to your excellent record of paying your current card on time.
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