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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently...

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business...

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Reviewed byBrad Larsen
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UPDATED: Mar 13, 2020

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Here's what you need to know...
  • Most insurance companies offer multiple ways to pay, including monthly installments
  • Monthly payments are typically more affordable than trying to pay entire premiums up front
  • A comparison tool can help you find a policy with an insurance company that accepts monthly payment plans

Many drivers choose to pay their car insurance premiums in installments on a monthly basis to make them more affordable. If you choose to pay your car insurance monthly, you should make sure you always know the date it is due and pay on or before that date to ensure that your insurance remains valid.

If your car insurance company does not accept monthly payments, you can utilize a comparison tool to find a more affordable policy with a carrier that does accept installment payments. Just enter your zip code above to get started!

Benefits of Monthly Car Insurance Plans

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There are many benefits to choosing a monthly installment plan for your car insurance premiums. The biggest benefit is that you always know how much your monthly payment will be and when it is due.

Other benefits include:

  • No need to save hundreds of dollars before the end of your current policy
  • Easier for monthly household budgeting
  • Easier to see increases and decreases in your bill
  • Automatic debits ensure you always pay on-time

Drawbacks of Monthly Car Insurance Plans

While monthly payment plans have a lot of benefits, they also have a few downsides.

  • If you don’t choose automatic debit, you may miss a payment
  • You will lose out on discounts for paying your entire premium up-front
  • You may be assessed monthly fees for choosing a monthly payment plan

How Monthly Car Insurance Payment Plans Work

When you choose and purchase a new car insurance plan, you will have the opportunity to pay your entire premium up-front or in monthly installments.

When you choose monthly payments, your car insurance carrier will divide your premium amount by the number of months in your policy and add any applicable fees.

For example, you choose a car insurance policy that is $600 for six months. Your insurance company will divide $600 by six to get $100 a month. They also require a five dollar fee every month, so your monthly insurance payment would be $105.

Avoid Policy Cancellations

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If you choose to pay your car insurance monthly, make sure to always pay on-time. Late payments can result in your insurance policy being canceled and higher future premiums, even if you only miss a single payment.

If you think you are going to be late on a car insurance payment, contact your insurance company about making an arrangement for when you will make the payment.

The agent will then tell you all of the possible outcomes of missing the payment which may include the possibility of a final notice followed by a policy cancellation or a grace period and late fees.

Insurance Grace Periods

If you miss one of your monthly car insurance installment payments, you need to find out if your insurance carrier offers a grace period, which is a period after your missed payment where your car insurance remains valid.

Insurance companies offer grace periods in agreement with their policy and any applicable state insurance laws, which can range from 24 hours to one month.

If you still cannot make your payment by the end of your insurance company’s grace period, your policy will be canceled, which may result in higher premiums in the future and being declared a high-risk driver.

If you are declared a high-risk driver or your insurance is canceled, you will have to immediately find a new policy. Thankfully, this can be accomplished quickly with the help of a comparison tool.

Finding Affordable Insurance with Monthly Payment Plans

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Most insurance carriers will allow you to make monthly payments on your policy. However, your monthly payments may total more than simply paying the entire premium up-front; however, they can be more budget friendly.

If you need to find a provider who allows monthly payments, use a comparison tool to help you find affordable auto insurance. If you have additional drivers you want to insured on your policy, you may want to include their information.

Make sure you have a policy with payment options that fit your budget needs. Enter your zip code into our FREE comparison tool below to get started!

References:
  1. http://www.autos.com/auto-insurance/pros-cons-of-paying-auto-insurance-in-installments
  2. http://www.autos.com/auto-insurance/pros-cons-of-paying-monthly-auto-insurance-premiums
  3. http://carinsurance.about.com/od/PolicyFundamentals/a/Best-Ways-To-Make-Your-Car-Insurance-Payment.htm
  4. http://www.finweb.com/banking-credit/dramatic-effect-of-one-late-payment-on-auto-insurance.html#axzz4EmsuRDXp
  5. http://www.investopedia.com/terms/i/insurance-grace-period.asp
  6. http://www.investopedia.com/articles/pf/06/carinsurance.asp

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