How Often Do You Pay for Car Insurance?

You can pay for car insurance in monthly, semi-annual, or annual installments, and each comes with its own benefits and drawbacks.
Written by Maria Cruz
Edited by Jessica Barrett
Reviewed by Brice Regling
Car insurance payments can typically be made monthly, every six months, or every 12 months. Each payment plan has benefits and drawbacks to be aware of.

You can pay for your auto insurance policy monthly, every 6 months, or annually

Payment frequency depends on which payment option works best for you:
  • Monthly payments
  • Semi-annual payments
  • Annual payments
Most drivers opt for monthly installments—and while it may not be feasible for all policyholders to pay their premium upfront, auto insurance companies often reward those who make lump sum payments.
Let’s take a look at the pros and cons of each option:
Monthly payments
Paying monthly is easiest to budget but typically includes installment fees. You’ll need to be diligent about avoiding missed payments, but signing up for autopay can help you avoid an
insurance lapse
and score you a discount.
Semi-annual payments
Paying for your car insurance every 6 months is typically more affordable than an annual lump sum and might qualify you for a discounted rate.
Annual payments
If you have a lump sum available, paying annually will lock in your car insurance premium for the year and you’ll probably get a pay-in-full discount. The cost are higher upfront but you’ll get money back if you have to cancel the policy early.
Take note: California and New York are the only two states that don’t offer
paid-in-full discounts
.

How to make car insurance payments

Regardless of which route you choose, you can make an auto insurance payment in several different ways:
  • In person
  • By mail
  • On the phone
  • Pay online
One of the simplest ways to take care of payments is through automatic payments, which withdraws your insurance premium on your scheduled payment date. You can typically schedule payments by:
  • Electronic funds transfer (EFT)
  • Credit card
  • Debit card
  • Online bill pay from your bank
app screenshot
Autopay is one of the most efficient ways to keep up with payments on your insurance policy, but reminders can also be helpful. 
If you’re using the
Jerry
app, you can turn on payment reminders to get notifications straight to your phone three days before your payment is due.

What happens if you miss a car insurance payment?

Missing one payment isn’t good, but it isn’t the end of the world if you rectify it quickly. Most car insurance companies offer a grace period for policyholders, which means if you make a payment within that allotted time frame, your insurer won’t cancel your policy.
Grace periods average 10 to 30 days and often come with late fees of around $15. If you miss a payment, check with an insurance agent to find out how long your grace period is and make the payment as soon as possible.
If you fail to make a payment during the grace period, your policy will be canceled and you will have an insurance lapse.
Driving without insurance
is illegal, so you have two options:
  • Call your insurer and ask for a policy reinstatement—you’ll likely need to pay a fee and your outstanding payment
  • Shop for a new policy (fast!)
Jerry can help you compare car insurance quotes quickly to find the best rate, and then secure
same-day insurance coverage
for your chosen plan. While this won’t remove the lapse from your driving record, it will prevent you from driving uninsured for any length of time.
icon
Your car insurance will never get canceled without your knowledge.
The law requires insurers to inform you of the final payment due date, which is often sent in the mail via a cancellation notice. The notice will have the absolute last day you can make a payment, after which your insurance will be void and you’ll be in a coverage lapse.

FAQs

Is it better to pay car insurance monthly or yearly?

Each comes with pros and cons. Monthly payments are the more affordable option in the short term but often come with installment fees and put you at risk of missing a payment. An annual premium costs more upfront but you might get a paid-in-full discount.

Do I get car insurance discounts for paying in full?

Many insurers offer policyholders a paid-in-full discount that can shave anywhere from 10-20% off the premium for the policy term.

What happens if your car insurance lapses?

If your policy lapses, contact your insurance provider and see if you can get your policy reinstated. If you make a payment fast enough after the grace period ends, insurers can sometimes reinstate your policy—but a lapse in any case comes with higher premiums down the road.
If you can’t make a payment, you’ll need to shop for another policy. Gather auto insurance quotes from at least 3-5 providers to find the most affordable car insurance costs after your lapse.

Can I cancel a car insurance policy that I paid for in full?

Yes, you can cancel your car insurance at any time, no matter how you paid. If you paid your entire premium upfront, you’ll probably receive a refund for the unused amount—sometimes minus an administrative or cancellation fee.

Does paying monthly insurance cost more?

Monthly payments typically cost more than if you pay in full at the beginning of your term due to installment fees. You’re also at greater risk of missing a payment.

Do insurance providers have grace periods for late payments?

Yes, most insurance companies offer a late payment grace period of between 10 and 30 days.

Does my driving record affect auto insurance rates?

Your driving history has a significant impact on your auto insurance premiums. A history of violations like DUIs, speeding tickets, or at-fault accidents will result in higher rates. A clean driving record without violations or insurance claims helps preserve better car insurance coverage options and lower car insurance rates.

Easiest way to compare and buy car insurance

√
No long forms
√
No spam or unwanted phone calls
√
Quotes from top insurance companies
Find insurance savings