One commitment to owning a car is paying for annual insurance and road tax renewal. Every car owner in Malaysia can relate to that time of year when they have to fork out hundreds of bucks out of their pocket to pay for auto insurance and road tax.
As the overall insurance price can be pretty high, it’s not strange to see people with inadequate budgets often skip renewals. Thankfully, this is steadily changing with paylater services that enable people to purchase insurance in instalments. But despite their popularity, instalment plans are not suitable for everyone as they have pros and cons. Here, we will share whether you should consider renewing your car insurance using instalment methods.
What is Buy Now Pay Later?
For the uninitiated, Buy Now Pay Later, or BNPL for short, is a financial service that allows users to make payments in instalments for a given period of time for their online and offline purchases.
The repayment period depends on the BNPL platform used. It typically ranges from a minimum of 3 months to a maximum of 12 months. Some platforms offer several options for repayment periods, while others are fixed.
For example, Atome, ShopBack and Grab have a fixed instalment period of 3 and 4 months, respectively, while Shopee offers a selection of 2, 3, 6 and 12 months for its users.
Pros of BNPL
As you know, using BNPL as a payment method for insurance and road tax renewal has many benefits. Some them include:
- Easy to use. You just need to register and verify your details to use the service.
- You don’t need a credit card to use this payment method.
- Automated repayments (payments are deducted directly from your bank card)
- Most BNPL services offer 0% interest rates and seldom have hidden fees.
Cons of BNPL
Despite the benefits, BNPL services also have some disadvantages. They mainly happen in the form of late payment charges and repercussions on your creditworthiness and repayment capabilities:
- You will be subjected to high late payment charges if you do not perform repayments on time.
- Your credit score report will be affected if you fail to repay the instalments on time.
Using BNPL to renew insurance
As with any financial service, BNPL has its pros and cons, as mentioned above. Hence, the platform may not be ideal for everyone to use. You can consider using instalment options to renew auto insurance and road tax if you fit into one of the many categories listed below:
Lack of budget
The Buy Now Pay Later service is beneficial as it can help many individuals who do not have the budget to renew their insurance annually. Insurance premiums can easily come up to a thousand bucks for new cars, and people with budget constraints may not have such an amount readily available in their pockets.
In times like this, instalments can be especially useful to lessen their financial burden. Anyone who struggles to manage high bills should consider using BNPL services to ensure the timely renewal of their vehicle insurance and road tax.
You want to save more
The BNPL payment methods help save money for insurance renewals. If your repayment period is 3 months, you only need to pay a third of the total amount for the first month.
Indirectly, this lets you save money as you don’t need to worry about paying in full. With BNPL services, you can better manage your finances and prioritise multiple expenses simultaneously.
Enjoy interest-free repayments
It is common for most instalment plans to come with some form of interest. But most BNPL services provide the convenience of repaying your bills at 0% interest. Insurance renewal on Bjak can be enjoyed at the lowest price with no extra charge for on-time payments. However, remember that late payments will be subjected to late payment charges depending on the BNPL service provider.
Get the best policy
Some car owners choose to get insurance at a low price because they want to save money. But with BNPL, you can afford to select the best insurance policy to protect your car, even if it’s slightly above your budget.
As you don’t have to make the whole payment upon renewal, owning a policy you could only dream of is now possible. The total sum will be split into smaller, equal amounts that you can settle for the said period, depending on the service provider.
Instalments for car insurance
Renewing vehicle insurance and road tax has been easier for everyone, thanks to instalment payment methods that make it possible. Although BNPL services are generally useful as they have more pros than cons, the suitability of using this method for insurance renewal ultimately depends on individual preference.
We hope this information will help you decide if instalment methods are something you should consider for your next insurance renewal. If you think it’s the one for you, please check out Bjak.my for more details.
Bjak is one of Malaysia’s biggest insurance comparison websites, offering policies from over 10 brands. Get your free insurance quote from Bjak today!
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