| In the good old days, the world was a simple place. | | | | willingness of insurance companies to be flexible on |
| You went into a store to buy goods, or to an agent | | | | the payments. First they dropped to 6 monthly |
| or broker to buy services. The price was quoted and | | | | payments. Some went for quarterly. And then the |
| you paid it out of the cash in your bank account. If | | | | final act of liberation - the monthly instalment plan. |
| your account was poorly stocked with dollar notes, | | | | Now you could buy your policy on the same basis as |
| you had to wait until you had saved enough. In this | | | | your home, the furniture and white goods in it, and |
| primitive way, people lived within their means, only | | | | the car you wanted to drive. Everything had come |
| buying goods and services when they could afford | | | | down to the total amount you could afford to pay |
| them. Those who had regular income and some | | | | every month and still have something left over to |
| collateral, were graciously allowed to borrow money | | | | buy food. This has some major benefits. You can |
| from their banks. But pity those who defaulted. Their | | | | buy insurance with no down payment. Just use the |
| collateral would rapidly disappear into the hands of | | | | internet search engines to find the auto insurance |
| their bankers. It was a tough world for borrowers. | | | | quotes offering the lowest premium rates, pay the |
| Then there was a revolution. Suddenly, there was | | | | first instalment in advance and you are legal on the |
| cheap credit available and we could all have what we | | | | road. But there is more to it than that. Ignoring the |
| wanted right now. Just one down-payment and the | | | | supposed advantage of easier money management, |
| rest in easy instalments. Then the revolution became | | | | it also frees you to change your auto insurance policy |
| a financial tsunami as the newly launched credit cards | | | | whenever you find a better deal. If you have paid six |
| suddenly put real buying-power in our hands with | | | | or twelve months in advance, this locks you into the |
| generous credit limits. Add in the housing equity | | | | policy. Yes, companies do allow you to change, but |
| release plans and all the other wonderful financial | | | | usually subject to cancellation charges - sometimes |
| gizmos dreamt up by the folk who live on Wall | | | | eye-poppingly high. The freedom to change insurers |
| Street, and you have the modern age just before | | | | can be important if you change the make and model |
| the worst recession in decades and the credit crunch | | | | you drive. The existing insurer may be less |
| that took everyone by surprise. Buying insurance | | | | competitive on the rates for the new vehicle, but the |
| policies has always been potentially expensive. When | | | | charges may take up the saving available by |
| you see the premium rate expressed as an annual | | | | switching to a competitor. However, because insurers |
| sum, it can look a little daunting. Yet, when you are | | | | prefer stability, they offer discounts on 6 or 12 |
| old enough to put wheels on the road, there's | | | | monthly payments to give them your cash in their |
| mandatory liability cover in all but three US states. | | | | hands. Paying on a monthly basis is always more |
| This is where dreams would fade were it not for the | | | | expensive. As always, it's your choice. |