Can I pay car insurance quarterly?

It is fairly standard for companies to let you pay your car insurance quarterly, annually, or monthly. Paying in full can save you up to 20% on your car insurance rates. This doesn't always make sense, though. Luckily, auto insurance companies offer a range of flexible payment options to help just about everyone.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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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...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

UPDATED: Apr 3, 2022

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Here's what you need to know...

  • It is important to have car insurance.
  • The insurance company does not have much leniency if you miss a payment, so be sure to pay on time.
  • Most insurance companies offer a variety of payment options, including quarterly.

You have a lot of options when it comes to customizing an auto insurance policy that meets your coverage needs. Some people choose liability only plans while others opt for more comprehensive coverage. High-risk drivers often have to find a balance between the coverage they need and cost. As long as you meet the state minimums (and lender requirements if you have a car payment), you can choose the insurance company that meets your coverage needs at the right price. But what about payment options?

Because it is required by law to have auto insurance, insurance companies do their best to make it accessible to everyone. It would be easier for all parties involved if everyone could pay 100% of their insurance up front. Insurance companies offer discounts for full payment. You can also avoid extra deposits with low credit scores. Insurance companies can avoid administrative costs and the hassle of pursuing insured drivers who fail to make their payments on time month after month.

Especially after an accident or other claim, this isn’t always realistic. The full premium may not be in one month’s budget. Sometimes, even drivers with low rates who are not high-risk drivers need to break it up a little, which is where payment plans come in. You can pay monthly, quarterly, biannually, and more.

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How flexible are auto insurance payments if you pay on time?

It is important to pay your insurance premiums on time to avoid any problems with late fees or lapse of coverage. In the event you stop paying your premiums as agreed upon, the insurance company could decide to cancel your policy.

A cancellation of policy can really put you at a disadvantage.

You may have a hard time trying to find a new insurance policy through another company, and if you do, you are almost guaranteed to be charged higher premiums.

Driving without insurance can get you in even more trouble if caught, including suspension of your driver’s license. Not being able to drive can put a damper on your lifestyle.

Without a driver’s license, you can’t drive yourself to work or take the kids to school. You don’t want to find yourself without the ability to drive, so it is very important to pay your car insurance on time.

As long as you pay your premiums on time, you can adjust it to fit your needs. For example, let’s say you want to pay every 2 weeks, but your insurance company doesn’t offer that option. You can break your payments in half and pay every 2 weeks. As long as your insurance company gets both payments by the monthly due date, you would stay in good standing. You’d need to pay a little more up front, though, to get on schedule to pay bi-monthly.

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What are the best payment options for auto insurance?

A long time ago, you were only giving one option for paying car insurance, and that option was once a year. As you can imagine that would be very expensive and not ideal for everybody.

Although that option is still available today, fortunately, the insurance companies realized that it is a necessity for customers to have flexibility in their payment options.

Here’s a look at some of the payment options you have today:

  • Monthly payments
  • Annual payments
  • Quarterly payments
  • Semi-Annual payments

These are the standard options you are given for paying your car insurance premium. The best way to look at the payment options is, the more money you can pay at once, the more money you will save all around.

Now, if you’ve had some history of not paying your premiums or you have a less than stellar driving record, the insurance company could label you as a high-risk customer. In some instances, you could even be required to pay your premiums up front. Generally speaking, though, you can set yourself up for success and keep your policy active by simply putting it on a debit card.

What are the advantages and disadvantages of paying quarterly?

Quarterly payments mean that you will receive a bill once every three months. Paying your insurance quarterly can be looked at as the middle ground of the payment options that are available.

It’s not hitting you with an exceptionally large expense all at once, and you still may have the advantage of saving some money.

As with paying installments in any plan, you will have some administrative fees calculated into the cost of your premium.

Paying quarterly is not as advantageous as paying annually or semi-annually, where you may see up to a 20 percent discount off your total premium.

Because it’s something that you pay every three months, or in other terms, four times a year, it can be easy to miss a payment without meaning to. Setting up auto pay with a credit card can save you a lot of hassle.

If you don’t want to use a card, consider setting up an automatic payment with checking account information or another method. This way, you don’t have to worry about missing a payment because it’s automatically taken from your account on a regular schedule. Most importantly, you can be confident you’ll have proof of insurance when you need it.

How can you save the most on auto insurance?

It is important to shop around for insurance on a regular basis. As your circumstances change so does the way the insurance company looks at you. You can get quotes to compare anything from collision coverage to liability coverage and roadside service without any commitment. If you won’t save money, you don’t need to switch policies.

By comparing rates on a regular basis, you could be saving money as well as considering your coverage options.

Even if you don’t have a great driving record, there are a number of actions you can take to try to lower your auto insurance premiums and possibly save yourself and your family hundreds of dollars a year, such as paying a higher deductible or taking advantage of good driver discounts.

Overpaying for car insurance is a situation you don’t want to find yourself in, but you should always use caution when looking for inexpensive insurance.

When you have a claim you want to be dealing with a reliable company that won’t leave you in the dark.

While paying quarterly may work for others, it may not work for you. The worst thing you can do is to reach your billing due date with a high payment that you can’t afford.

No matter what payment plan you set up with your insurance company, make sure it is something that compliments your everyday lifestyle.

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