The options will depend on your insurance company—some providers do not offer annual premium payments except in states where they are required by law to do so.

Monthly payments will usually cost you more than annual payments in the long run

Even though paying upfront for your six-month or twelve-month policy may seem like a lot of money at first, this option will usually be cheaper in the long run than paying in installments.

This is because:

Auto insurance companies often charge processing fees if you pay in installments since there’s a chance that you could default on your payments over time.

Many auto insurance providers offer

paid-in-full discounts

to policyholders who pay their entire premium in a lump sum at the beginning of the policy term.

Of course, paying in full may not be possible depending on your financial situation. But if you can afford it, this will usually end up saving you money.

Before you pick a payment plan:

Ask your provider what the total cost of your bills would be (including processing fees) for any of the installment plans that you’re considering

Find out if your provider offers a paid-in-full discount and ask how much money it could save you

Compare the total cost of paying in installments (with processing fees) vs. paying in full (with the discount)

From there, you can decide if the savings would be worthwhile.

If you don’t qualify for a paid-in-full discount, there are other ways to save money on your car insurance rates. Many car insurance providers offer the following payment-related discounts:

Automatic payments: If you can’t pay your auto insurance premium in full, some providers will reward you with a discount if you set up automatic payments linked to your credit card, debit card, or checking account.

Paperless billing: Many insurance companies will offer you a discount if you agree to receive all your bills (and other important insurance documents) electronically.

Responsible payer discount

: Some insurance companies will be willing to reward you with a responsible payer discount after a certain period if you continuously pay your insurance bills in full and on time.

These are just a few of the many

car insurance discounts

available from most major insurance companies.

Other ways to save money on auto insurance rates

Besides qualifying for auto insurance discounts, here are a few other ways to lower your insurance cost:

Compare

car insurance quotes

: You may be able to find a lower rate on the same car insurance coverage with a different provider. You can request quotes from insurance companies individually or use a comparison tool like

Jerry

to find the lowest rate from over 50 top providers.

Consider raising your deductible: A higher deductible will leave you with a lower insurance premium—however, you need to make sure you’re comfortable paying the entire amount of your deductible in the event of a claim.

Bundle multiple insurance products: When you purchase two or more insurance products from the same provider (like auto insurance and

homeowners insurance

), you can usually earn a lower rate on each one.

“When we added a new car to our family, we were shocked at how high our current insurer was going to hike our rates. We used
Jerry
for some comparison shopping and are now saving around $1000 a year. Thank you, Jerry!” —Darius P.

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FAQs

How many months does car insurance last?

Auto insurance policy terms vary, but most policies last for six months or one year.

Is insurance paid monthly or yearly?

Car insurance providers usually offer multiple payment schedule options. You may be able to pay monthly, yearly, every six months, or on some other installment schedule.

Are you overpaying for car insurance?

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