Can I pay off my car insurance early?

If you pay car insurance early, you may receive a discount from your car insurance company. Before you pay car insurance early, make sure your policy's billing terms allow for early payments.

Free Car Insurance Comparison

 Secured with SHA-256 Encryption

Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

Full Bio →

Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 15, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Here's what you need to know...

  • Many insurance carriers will offer you a discount should you pay off your policy early
  • Be aware of your billing terms and early payment conditions before binding coverage
  • Comparing your insurance policy options and focusing on billing terms can help you get a favorable and value-add position

You never know what can happen when you get behind the wheel of your car. Even the most perfect drivers can have unfortunate accidents every once in awhile; the accident may not even be your fault at all.

One thing that many people dislike about car insurance is the monthly payments associated with it.

All insurance policies come in a variety of different forms and have all sorts of types of payment terms.

Some car insurance policies are going to have you paying one annual payment, while many others are going to have monthly or installment plans.

What are the options that you have as a consumer should the payment terms that you sign onto on day one no longer work for you a few months down the line? What if you want to pay off that car insurance policy early?

Ask these questions while comparing auto insurance quotes. Start comparison shopping today by entering your zip code above!

Pay Attention to the Billing Terms

Handsome young man holding papers and looking at it while sitting on the couch at home

You always want to pay special attention to the billing terms that you sign onto when you purchase your car insurance policy. You may not realize it, but you may be signing onto a policy that has billing terms that are, simply put, not in your favor.

If you are someone that wants to pay for your car insurance policy in monthly installments, but the billing terms call for one annual payment, this is likely to be an unpleasant discovery on your part.

You also want to see if you will even have the opportunity to pay off your car insurance early.

Some car insurance companies, as crazy as it may sound, may actually penalize you should you decide to pay that premium off earlier than you were supposed to.

Paying a penalty for taking care of a bill early is not something that any consumer should ever have to face.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Typical Discount Opportunities

The other big thing in play here is discount opportunities for paying off your car insurance policy early.

Some insurance providers may give you a premium amount over monthly installments, but then give you a discount should you decide to pay it off earlier than you were supposed to.

As a consumer, this is the ideal scenario that you want to look for.

That way, should you need to use the installment option you have it, but if you want to pay it off early, you are going to benefit from making that decision.

Be Aware When You Do Price Comparisons


Awareness is what it is all about when you are shopping for a car insurance policy.

It is always best to do price comparisons and see what is being offered in the market in terms of:

  • Coverage
  • Premium
  • Billing terms
  • Customer service, etc.

Having an awareness of your ability to pay off an insurance policy early can help you avoid surprises that you do not want.

When you go to purchase your car insurance policy, see what you can get for billing terms and if they are going to work for you and your budget.

Be sure to ask about your ability to pay off your policy early when you are getting quotes from the different insurance carriers in the market.

If you are in a position to pay off your policy early, it should be on terms that are going to benefit you, not the other way around.

Shop and compare for the best auto insurance quotes. Enter your zip code below to get started!

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption