premium is always paid on time and in full. But you also need to decide what payment method to use and your payment frequency—and choosing the right combination can lead to added savings.

How to pay for car insurance?

Car insurance companies offer various payment options for policyholders. The first decision you’ll need to make is how often to make your premium payments.

How often do you pay car insurance?

1. Monthly payments are an option with most auto insurance policies. Unfortunately, monthly payments typically include a fee, which ultimately increases your insurance costs overall.

2. Some providers offer quarterly payments, which means you pay for three months' worth of premiums at a time. While this may seem like a better option, quarterly payments typically still include a fee you could avoid by paying in full.

3. Pay-per-mile is one option with some providers but can often wind up being your most expensive option—especially if you drive more than expected. Pay-per-mile insurance policies typically use a monthly payment plan.

Pay-per-mile vs usage-based policies: Unlike pay-per-mile policies, usage-based policies allow drivers to earn discounts by using a telematics device or phone app. According to Jerry’s VP of Insurance Operations, Josh Damico, “Most carriers offer discounts based on good driving behavior, which is increasingly tracked and measured through an app on your phone using telematics. You’ll usually get a discount for enrolling in the telematics program, as well as additional savings for good driving behavior, without any adverse effects.”1

A top priority with any of the above payment plans is ensuring your payments are made on time and in full. Setting up autopay is a great way to ensure this happens, but drivers who use the

Jerry

app can also set up payment reminders.

With payment reminders enabled, Jerry will send you a text alert three days before each payment due date.

Even if you’ve set up autopay with your provider, getting a warning that you’re about to have a payment withdrawn can help you ensure you have the funds available to avoid a missed payment.

4. Paying in full for car insurance means you pay your entire policy premium in one bill. Drivers with a six-month policy term will pay twice per year, and those with annual terms will pay once per year at

policy renewal

Paying in full is your best option to optimize savings. Not only will you avoid the fees associated with monthly or quarterly installments, but you could also earn a discount from your provider for paying up front.

If you can afford the upfront payment, you can save an average of 5% on your car insurance policy. 2

How to make payments for car insurance

Once you’ve decided how often to make your car insurance payments, it’s time to choose the method by which you’ll make those payments.

1. Electronic funds transfers (EFT) automatically link your bank account to your car insurance company, allowing your provider to withdraw payment for your auto insurance premium on or before each due date. Some providers also allow you to choose the type of account used for your EFT—options typically include checking account, savings account, credit card, or debit card.

Pro Tip Opting to set up credit card payments to cover your premiums can allow you to take advantage of customer rewards programs offered by your creditor and build your credit score. Just be sure to review your credit agreement to ensure you don’t wind up with extra fees, and pay your balance in full to avoid interest charges.

2. Bill pay: Most providers also allow policyholders to use their bank’s bill pay feature to pay their car insurance bill. This option usually disqualifies you from autopay discounts, but it does offer you more control over who can access the funds in your accounts.

3. Mobile app or online payments: Most carriers’ mobile apps include car insurance payment options. You can also check your provider’s website for online payment options.

4. Phone payments: Most providers allow policyholders to make payments by phone using an e-check or credit card. If you’re a first-time user, you’ll need to have all your account information available when you call.

5. Check or cash: Mailing a check or money order is always an option for paying your policy premiums. In some cases, you can also pay in cash by visiting a provider’s office. If you wish to pay in cash, be sure to check with your insurance agent to ensure they accept this method of payment.

Learn more:

How does car insurance work?

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What to do if you miss a car insurance payment

If you miss a car insurance payment, check with your provider to find out your options for bringing your policy back up to date.

Most providers offer a grace period of anywhere from 5 to 30 days—so if you’ve only missed by a few days, you’ll likely be able to make a payment and reinstate your policy without a

lapse in coverage

If you’ve been delinquent for a longer period, your provider will likely begin the cancellation process by sending you a notice by mail. This notice will include a policy termination date, so your goal will be to either contact your provider to reinstate your policy or compare car insurance quotes to

find a new policy

with a new provider before that date to avoid

driving without insurance

How do you afford car insurance?

If you’re having trouble affording car insurance, you have options:

Contact your insurance company to see what options you may have for grace periods or payment deferrals.

Ensure you’re taking advantage of all the

car insurance discounts

you qualify for.

Raise your

comprehensive and collision coverage deductibles

. Even a small increase can equal significant reductions in auto insurance rates.

If you drive an older car

, it may be time to consider dropping

full coverage

, but only if you can afford to repair or replace your car on your own.

Shop for a new policy

or check to see if your state offers options for

low-income drivers

Work on your credit. Unless you live in California, Hawaii, Massachusetts, or Michigan,

a low credit score

can lead to higher insurance rates.

Clean up your driving record. Safe drivers pay substantially less for insurance coverage than those with a poor driving history.

FAQs

How do insurance payments work?

Policyholders pay premiums to insurance companies in exchange for protection from the legal and financial consequences of car accidents. In exchange, auto insurance companies use the collected premiums from all insureds to pay out on claims. 3

Is it better to pay car insurance monthly or premium?

If you can afford it, paying your car insurance premium in full is a better option than paying it monthly. By paying in full, you get to take advantage of paid-in-full discounts and you have the assurance that you won’t miss a monthly payment and risk an insurance lapse.

Should I pay insurance with a credit card?

If your provider allows it, paying for car insurance with a credit card could be a great way to maximize rewards opportunities and build your credit history. But you run the risk of incurring interest on your premiums if you don’t pay your balance in full, so ensure the benefits outweigh the risks before selecting this payment option.

How do I renew my insurance policy?

Most insurance policies are set to renew automatically. As the end of your policy term approaches, you’ll receive a renewal notice explaining new policy terms and rates. To renew, simply make a payment in the new amount—but keep in mind, you may miss out on potential savings if you renew without shopping around first.

What is the cheapest car insurance company?

No one insurer provides the cheapest rates for all policyholders. Providers each use their own methodologies to calculate your premiums based on several highly individualized factors, so comparing quotes from multiple insurers with the Jerry app is the best way to ensure you get the cheapest rate for your profile.

What should I do if I have an accident?

If you’re in a car accident, once you’ve ensured you and everyone is okay, it’s time to think about insurance claims. Ensure you gather as much evidence at the scene of the accident as possible so you’ll have what you need to give your insurance provider what they need to assess your losses.

If you were at fault in the accident or your car was damaged in a non-collision event, it’s also important to check your policy terms to ensure you know your deductibles.

How much do I need to pay for car insurance?

Each driver’s car insurance rate will be different based on how premiums are calculated. That said,

average rates for insurance

in the U.S. currently sit at around $2,264 per year for a full coverage policy.

How do I change my car insurance?

The easiest way to change your car insurance is to use

an insurance comparison app

, like Jerry. This allows you to compare offers from multiple providers to ensure you get the best rate for your profile.

How long will it take my insurance payment to process?

Different providers take different amounts of time to process your car insurance payments. To see how long your provider will take, check your policy details, or contact a representative from your insurance company.

What are the payment options for GEICO?

GEICO allows customers to pay their bills online using a check or credit or debit card, through the GEICO mobile app, via phone using an e-check or credit card, or by mail with a check or money order. 4