Even though paying upfront for your six-month policy may seem like a lot of money, 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 more administrative work associated with more frequent payments.

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. These discounts can be 10–20% of your total premium.

You may be more likely to miss a payment on a monthly schedule, so you could pay more in non-sufficient fund (NSF) fees. And if your insurance is canceled for non-payment, you’ll pay higher insurance rates because of the

lapse in coverage

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

PAID-IN-FULL DISCOUNTS ARE NOT AVAILABLE IN ALL STATES: California and Washington DC do not allow paid-in-full discounts, and Florida excludes the discount from certain six-month policies. 1

Car insurance payment schedule options

Car insurance companies typically let you pay your premium on one of the following schedules:

Monthly payments: Pay every month until the end of your policy term

Three-month payments: Pay for a six-month policy in two installments

Six-month payments: Pay upfront for a six-month policy

Annual payments: Pay upfront for a 12-month policy

Take note that your options may vary: Some providers do not offer annual premium payments except in states where they are required by law to do so. And if you have a bad driving record, low credit score, or history of cancellation for non-payment, your insurance company may require you to pay in full to obtain coverage.

When you shop for insurance with

Jerry

, it’s easy to see your payment options before you purchase a plan.

Then, once you choose a plan, you’ll be shown all of the available payment schedules for that policy.

How to choose a payment plan

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)

Compare rates from several insurance companies to see if a different insurer offers you a lower premium or more flexible payment terms

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

Paying in full isn’t the only way to get a payment-based

car insurance discount

. You might also save for:

Adding a debit or credit card for automatic payments

Enrolling in electronic funds transfer (EFT) to pay directly from your bank account

Paying all of your bills on time

Ask your insurance agent to learn more about what insurance discounts might help you save on your policy.

Learn more:

10 essential car insurance hacks to lower your rate

FAQs

How many months does car insurance last?

Car insurance policies usually last for either six or 12 months. It’s most common to purchase a 6-month car insurance policy, but 12-month car insurance policies are available in many states as well.

Is insurance paid monthly or yearly?

You can usually make monthly payments on your auto insurance policy, even if the term is six or 12 months. However, you can usually save if you pay your auto insurance premium in full.

How is a car insurance premium different from a deductible?

Your car insurance premium is the cost of your policy. Your deductible is an out-of-pocket amount that you must pay before your insurance coverage will pay for certain types of claims.

What month is car insurance most expensive?

There’s not a huge variation in car insurance prices from one month to another, but some insurance experts believe that it’s best to buy car insurance in December. Insurance companies tend to make rate adjustments in January, so if you buy in December, you’re locking in a lower rate for as long as possible.

Is it good to change car insurance every six months?

It’s at least a good idea to compare auto insurance rates every six months, even if you stay with your current provider. That way, you’ll always know you have the best car insurance rates available to you.

Should my car insurance go down every year?

Some factors can make your car insurance go down, like gaining more driving experience or having a clean driving record for longer. But, unfortunately, factors like rising inflation mean that insurance costs tend to go up over time.

Why are GEICO policies only six months?

It’s common for insurance companies to offer six-month terms. In fact, several other major insurers, including State Farm, Allstate, and Progressive, only offer 6-month policy periods—you can’t buy annual policies.

Are six-month auto policies more expensive than 12-month policies?

If you can find a provider offering a year-long policy, it will usually be cheaper than a six-month policy if you pay for the entire year. If you choose to pay monthly premiums rather than making one lump sum payment, the total cost of your annual car insurance may be the same.

Do all carriers offer six-month car insurance policies?

Yes, insurance companies typically write policies for six months, although some also offer the option to purchase a policy that lasts a full year.

How can I save money on my car insurance if I can’t pay in full?

To find cheap car insurance, compare quotes from several different car insurance companies. That will allow you to find a provider that can offer you the lowest car insurance costs.

SOURCES

https://www.progressivecommercial.com/commercial-auto-insurance/insurance-discounts/