Finding and maintaining car insurance coverage doesn’t have to be difficult. How often do you pay car insurance? Fortunately for many drivers, paying for car insurance can be flexible. We’ll discuss some of the most common car insurance payments, some of which qualify you for discounts.
To find the most affordable car insurance, check out some great options for coverage in our review of the best car insurance company, and call us at (844) 246-8209. Or, enter your zip code below to get quotes from providers in your area.
In this article:
- How Often Do You Pay Car Insurance?
- Is It Better To Pay Car Insurance Monthly Or Annually?
- Other Ways To Save On Car Insurance Payments
- How Much Is Car Insurance Each Month?
- Our Recommendations For Car Insurance
How Often Do You Pay Car Insurance?
When setting up auto insurance coverage, there are many ways you can pay your premium. Your “premium” is the amount of money you pay to maintain protection for your vehicle on the road. Many insurance companies allow some flexibility with payment methods. These can allow for more affordability depending on your budget, and you may have some opportunities to earn discounts or lower rates depending on the method you choose.
You can set up payment plans with your car insurance company based on your needs and budget. Some usual methods include setting up automatic monthly payments, making partial payments, and making payments in full.
So, how often do you pay car insurance? Here are some of your options:
Paying for car insurance monthly is a common preference and often the easiest method to manage. It’s a more affordable option for policyholders who can’t pay for a full year of coverage up front.
You usually can pay for your monthly car insurance premium by credit card, electronic check, or cash. While you can call or mail a monthly premium, many insurance companies also have an online dashboard that allows you to manage your policy, file claims, and make payments on the internet.
You may choose to sign up for automatic monthly payments via electronic funds transfer (EFT). In this case, your auto insurance company will automatically take a payment for that month’s insurance coverage. This is a great option because it takes away the worry of having to remember the payment due date.
We recommend paying monthly if you have consistent income throughout the year and prefer to manage bills one month at a time.
2. Every Six Months
You also have the option to pay for a six-month policy or a semi-annual policy. These cover you and your vehicle for six months. You can often qualify for a discount when you pay in full for your six-month insurance policy.
This is a good option, because it’s less expensive than paying in full for an annual premium. But, of course, it means you’ll have to renew your policy more often. At the end of your policy, your rates may be up to change, whether that’s an increase or decrease.
Your auto insurance premium can also be paid in full annually. This is often the best option for some drivers, because it is generally the least expensive option overall. Many companies offer discounts when drivers pay insurance premiums in full at the start of the policy.
Paying for car insurance annually takes a bill off of your monthly checklist. It means one bill is already paid for and ready to cover you throughout the next 12 months. The downside to this method, however, is that it does require a large sum of money up front, which may not be possible for many drivers.
If you want to lock in your auto insurance rates for a year while saving money on an upfront payment, ask about starting an annual policy with two six-month payments.
Is It Better To Pay Car Insurance Monthly Or Annually?
Deciding how you pay for car insurance is up to your personal preference and your budget. Luckily, no matter which provider you choose to insure your vehicle, most major auto insurers offer the same options for policy payment.
Here are some pros and cons to paying car insurance premiums monthly or in full:
Paying For Car Insurance Monthly
Choosing a monthly policy term is one of the most common ways people manage their auto insurance policy.
Potential discount for signing up for automatic monthly payments
Must remember more frequent due dates and pay late fees if you do not sign up for EFT
More easily affordable option for many drivers
May be required to pay an installment fee at the start of the policy
Paying For Car Insurance Annually
If you have the budget, paying for car insurance in full annually is a great option. Here’s why:
Helps you avoid having a lapse in coverage
Expensive up front
Usually the best price when paying in full
Great option for people whose income fluctuates throughout the year
Each of these car insurance cost methods has benefits depending on your budget and preferences for managing money. If you can afford to make a lump sum payment at the start of your policy, it’s a great way to save money on a year of insurance. Many providers offer a great paid-in-full discount.
On the other hand, if you like to manage your bills monthly and are looking for easier, bite-sized payments, monthly payments may be the best option for you.
Other Ways To Save On Car Insurance Payments
In addition to getting a discount for signing up for EFT payments and paying your premium in full, you can get cheap full coverage car insurance by qualifying for a number of different car insurance discounts.
Here are some discounts you may qualify for:
- Paperless billing
- Policy bundling (homeowners insurance/renters insurance, life insurance, health insurance, etc.)
- Multiple cars or drivers on your auto policy
- Being a good student
- Taking a defensive driving course
- Taking a safe driving program
- Safety features installed on your car (like airbags, anti-theft devices, or anti-lock brakes)
- Customer loyalty
- Accident-free driving
- Low annual mileage
Ask your car insurance agent about the discounts your provider has available. Then, check your eligibility to see what you could save.
How Much Is Car Insurance Each Month?
Many factors play a part in how insurance companies calculate your car insurance premium. Ideally, they try to determine how much risk you pose based on statistics. They use certain factors to predict how likely you are to get into an accident.
For instance, studies from the National Highway Traffic Safety Administration show that teen drivers are more likely to get into an accident during their first few years of driving, so young drivers often are charged higher rates than mature drivers. The same goes for people whose driving record includes moving violations or causing severe accidents.
Companies determine auto insurance costs by reviewing the following factors:
- Driving history
- Credit score
- Type of car
After your personal information is collected, your car insurance company will talk to you about the amount and type of coverage you wish to include in your policy. You can purchase your state’s minimum required liability insurance, or you can add on additional coverage like roadside assistance, rental car coverage, and comprehensive coverage. Then you can decide how often to pay your car insurance.
It’s also important to note that your car insurance premium is different than your deductible. The premium is the regular amount you pay to keep coverage. Then, you must also pay the car insurance deductible in the event of an accident or other covered incident.
Your car insurance rates may change over the years. Always take the time to shop around to compare rates toward the end of your policy. Review other providers to see if anyone will offer you a better rate for coverage.
Our Recommendations For Car Insurance
Comparison shopping is always a great idea to get multiple car insurance quotes. That way, you can find the provider with the most affordable rates and the best coverage options. You can also decide how often you pay car insurance. To assist you in your search for affordable auto insurance coverage, we reviewed some of the top providers in the nation.
We compared each on its industry reputation, coverage options, cost, customer service ratings, discounts, and more. Check out two of our top picks, and enter your zip code or call (844) 246-8209 to compare quotes from multiple providers.
#1 State Farm: 4.5 Stars
State Farm auto insurance earned a 4.5 rating in our research. This company is known for its local agents who are friendly and knowledgeable. In addition to low monthly rates, State Farm has a number of discounts for things like going accident-free, being a good student, and having safety features installed in your car.
You can also participate in the Drive Safe & Save™ app, which calculates a discount based on your safe driving habits. Explore State Farm’s additional coverage options, including rental coverage, roadside assistance, and rideshare coverage.
Read our full State Farm insurance review.
#2 Progressive: 4.5 Stars
Progressive auto insurance has a reputation for transparency and saving people money, which helped it earn a 4.5 rating in our review. The company offers full coverage options at affordable rates for most drivers in all 50 states. On Progressive’s website, you can compare multiple insurance providers to ensure you’re getting the best price with Progressive.
Ask an agent about the many discounts you may be eligible for. You could get a discount for bundling policies, maintaining continuous coverage, paying your premium in full, and signing up for automatic payments.
In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.
- Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
- Availability: We consider availability by state as well as exclusions for specific groups of drivers.
- Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
- Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
- Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
- Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.
Read more on car insurance:
- What Happens If You Can’t Afford Car Insurance?
- Your Guide To A Factory Warranty
- Should You Get An Extended Warranty?
- Does My License Have To Match My Vehicle Registration?
- Insured Driver Driving An Uninsured Car
- Does Auto Insurance Cover Theft?