How Many Months of Car Insurance Do You Pay for At a Time?

"FTTOHG Has Moved to https://opposite-lock.com" (alphaass)
05/30/2017 at 00:18 • Filed to: None

The other day, my auto insurance policy came up for renewal and it jumped by something like 25% despite a clean record. So I called my insurance planner and asked for some alternatives. I used to pay by the month, mostly out of habit from when I was young and didn’t have cash for a year or even multiple months of insurance at a time. When I looked a the quotes, though, I was amazed just how much more expensive it is. I guess I shouldn’t be surprised, but on the new policy shown above (for a ‘13 Outback and ‘14 Forester), I’d be paying $127 per year more just to pay by the month. If I put that payment on a card instead of a bank draft, throw on another $36. Or if I pay every six months, it’s only about $11 more than paying for the full year. Fortunately, I can afford it now, so I’m paid up through May 2018 and basically saving 2 oil changes. But it got me thinking... how do others do this? I realize that for a lot of folks, shelling out for a year at once is a pretty big chunk of change, so I don’t hold it against anyone that does. But basically you’re paying a finance charge if you do. Or maybe it varies by company? I really haven’t shopped around enough to even know if every insurance company has a similar gap between paying monthly and annually. Or, heck, if all insurance companies even offer all of these payment options.

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DISCUSSION (35)

Highlander-Datsuns are Forever > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 00:26

Check the details of your policy too, for some reason my 27 year old pickup ended up with comprehensive coverage. After that adjustment my 6 month term decreased by $300.

Dr. Zoidberg - RIP Oppo > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 00:29

Month-t0-month with autopay. I just don’t like the idea of paying a large sum up front for minimal savings over time.

FTTOHG Has Moved to https://opposite-lock.com > Highlander-Datsuns are Forever
05/30/2017 at 00:34

Yep always gotta check the details. This jump was weird because nothing changed. Apparently the company just upped rates across the board. My planner said I was the fourth person who had that auto insurance company who had called that week about rates going up significantly with no changes claims/tickets or coverage changes.

Xyl0c41n3 > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 00:39

There’s a saying that’s very true: it’s expensive to be poor.

AestheticsInMotion > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 00:43

Monthly, deducted from my account automatically. Unfortunately being a 22 year old dude, even with a totally clean driving record there is very little I can do at the moment to reduce auto insurance costs.

Thankfully it’s fairly cheap. Going through an insurance broker and getting matched with a smaller company was a game changer. Especially after paying geico rates for a year. 190 a month for just the Miata went down to 80, 08 Outback went from 200 to 70, and 02 ranger has been insured through a separate company for 40 a month.

JQJ213- Now With An Extra Cylinder! > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 00:44

I still piggyback off my parents policy. He pays every 6 months but I pay him back every month since I can’t afford the $1300+ as a student.

FTTOHG Has Moved to https://opposite-lock.com > JQJ213- Now With An Extra Cylinder!
05/30/2017 at 00:50

Been there. I paid my folks for amount it went up for a 3rd car which was only like $40/month 10 years ago. Sure beat the rates of going at it alone!

JQJ213- Now With An Extra Cylinder! > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 00:56

I know I’m 19 but I’ve never had an accident or been pulled over. I drive a 2013 Accord. State Farm here wanted north of $450 a month for me alone. That’s ridiculous.

500 Days of Kittens > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 01:10

I’d also be interested in a poll for providers. I know it’s very regional, but I trust Oppo a lot more than other places.

FTTOHG Has Moved to https://opposite-lock.com > 500 Days of Kittens
05/30/2017 at 01:42

It would be interesting. I suspect that on Oppo it might be hard to make a poll due to the number of folks that use smaller insurance companies. Sure we could get Geico, Progressiveand State Farm on there but that might only cover a small percentage.

Eric @ opposite-lock.com > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 03:01

I think it might also depend on the state. Where I live everyone (and I mean everyone) seems to like to get 6-month policies. When I moved here, they automatically assumed I’d want one and I insisted on a 12-month one, which was quite a bit cheaper. When I polled people around me that hadn’t lived elsewhere, it was clear that everyone in this state has been buying 6-month policies forever. In other states that I have experience with, 12-month policies are the norm. It also sounded like they might go even longer, but I didn’t delve any deeper.

I have paid in full since I was in my early 20s. I always do a 12-month policy so I only have to deal with the work of reviewing it and paying it once a year.

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
05/30/2017 at 03:04

If you have any reliable source of income on that money that is greater than the difference over time, I’d love to hear about it. At the savings rates I’m seeing, I’d be losing nearly $200/year going that way.

Eric @ opposite-lock.com > AestheticsInMotion
05/30/2017 at 03:08

I wish I had a trusted one here, or the ridiculously-low rates I got from the Interinsurance exchange of AAA of Southern California. The local AAA chapter gets me decent discounts with Safeco, which I use for all my insurance needs, but I suspect there are somewhat cheaper options.

When I was a young and newer driver, I got the best rates, by far, through a small independent insurance broker that set me up with a series of oddball tiny insurance companies every 12 months or so to keep my rates low. I couldn’t even recount who they were, but I never had trouble with them and they were always cheaper than the big names.

Humorously, Geico is really expensive unless you’re in just the right spot for them. They steer you away (this is why they offer a price comparison) if you are too good of a driver, too new of a driver, etc. Their entire business model is to nearly monopolize on people that have driven for a while and demonstrated that they are shitty drivers - that’s how they keep their crazy huge “this is how much you could save” numbers - they undercut everyone for the people that get into a lot of accidents so they make a lot per insured, but just a little less than everyone else. The fly-by-night daily or weekly insurance people charge a fortune, but focus almost entirely on people that even Geico won’t touch (the people with a DUI or two, but that haven’t had their license revoked (yet)).

All the big marketing insurance companies have a target niche group that they make all their money on. Most don’t really fight over those groups, either.

shop-teacher > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 07:08

Now would be a good time to check other companies rates. My insurance went up a lot for no reason last year. I switched from Farmers to AAA for less than I was paying Farmers before my rates went up.

bhtooefr > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 07:21

Progressive takes PayPal, PayPal offers 0% financing for 6 months on anything over $99.

So, I pay Progressive every 6 months, and then pay PayPal every month. Spreads it out without taking the payment penalty on every payment.

My citroen won't start > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 08:15

I pay anually on my credit card, 3 monthly payments with 0 % interest.

Also interested to see the difference in values: I pay around 1100 for the Passat Variant and 1700 for the Tribeca yearly.

FTTOHG Has Moved to https://opposite-lock.com > shop-teacher
05/30/2017 at 08:17

I switched. Interested enough back to who I had a few years ago.

Arrivederci > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 08:25

I formerly paid every 6 months, but just switched from Geico to Travelers when I bought my house this month. They gave me a better deal for homeowners +auto + various other personal property.

Geico gave me a discount for paying every six months, but Travelers doesn’t, so I’m paying monthly.

pip bip - choose Corrour > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 08:28

what you’re paying for a year will get me many years here.

TheRealBicycleBuck > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 08:34

Time to start shopping! We had this discussion with friends over the weekend. The crazy thing is that the insurance they had at the time wouldn’t lower their rates to match the lowest offer they found. So they switched. It saved them $2,500 a year.

shop-teacher > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 08:49

I did that once too. Actually now that I think about it, I went from Country to Farmers and then back to Country. Then this last switch was from Country to AAA. All switches because of rates rising. I’ve always paid every six months, but none of the companies I’ve ever used offered a discount beyond that.

Gone > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 09:21

Ours renews every 6 months for the cars. My bike was yearly. I paid in full each time and got a discount for it (saved about $375/yr for cars and bike). Always paid by CC because I get cashback too and there were no additional charges for CC payments. We have Allstate (combo w/house, etc), but that will probably change soon - our rates went up earlier this year for no reason. It’s $1050/yr full coverage for the Cruze and Dakota.

FTTOHG Has Moved to https://opposite-lock.com > Arrivederci
05/30/2017 at 09:25

If it was no difference in price, I would certainly pay monthly - just easier to budget for me because I’m bad at planning.

FTTOHG Has Moved to https://opposite-lock.com > pip bip - choose Corrour
05/30/2017 at 09:26

Interesting. I would’ve thought rates in Australia would be similar to the US. Though here it can vary wildly region to region.

FTTOHG Has Moved to https://opposite-lock.com > TheRealBicycleBuck
05/30/2017 at 09:29

I’ve found it odd how unwilling insurance providers are to match rates compared to other industries. Many things - TV, phones, mortgage rates, etc. - you can get your current provider to match and keep you, but Insuarnce they seem to just let people switch constantly rather than keeping customers.

415s30 W123TSXWaggoIIIIIIo ( •_•))°) > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 09:46

I don’t even have a whole year option. I have three vehicles on one plan so I get mileage discounts on the older cars and the 6 month is the cheapest. I have State Farm. It’s also the only insurance I can have that fully covers my 71 Z and my 83 300D. I don’t have an enclosed and lockable garage so I can’t get classic insurance like Haggerty.

Little Black Coupe Turned Silver > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 09:48

Every 6 months, I wish it would be once a year but it’s not even an option.

TheRealBicycleBuck > FTTOHG Has Moved to https://opposite-lock.com
05/30/2017 at 09:54

I think I know why. To become a licensed insurance agent, I had to learn about how the rates were set. Each state works a little differently, but in Texas, the process starts with the Insurance Commissioner setting a range of rates for different risk categories in different areas for the state. Each company decides where they want to fit in the range and sets their rates accordingly. That process is repeated annually.

Since they have to file their rate structure with the state commissioner, it may be impossible for them to quote a different rate for a current customer.

Even though I know the why, it’s still crazy that it’s this way. Historically, this was done to protect consumers, but that may not be necessary in the general market any more. I think it will always be necessary in the under-served or high-risk markets.

Dr. Zoidberg - RIP Oppo > Eric @ opposite-lock.com
05/30/2017 at 10:12

My savings wouldn’t even be nearly that much on my plan.

Eric @ opposite-lock.com > Dr. Zoidberg - RIP Oppo
05/30/2017 at 14:42

If the savings are over $20, I’m coming out ahead...

wafflesnfalafel > TheRealBicycleBuck
05/30/2017 at 23:50

exactly correct - all personal lines rates (including auto) are filed with individual state’s Departments of Insurance. Carriers get fined heavily, (or even banned from states,) if they don’t follow the rate structures they have filed.

Justino6969 > FTTOHG Has Moved to https://opposite-lock.com
05/31/2017 at 11:49

I pay once every 6 months, because that’s the maximum term Progressive will allow me to, and it’s the cheapest option (~$360/6 months).

Justino6969 > JQJ213- Now With An Extra Cylinder!
05/31/2017 at 11:53

Age is always the determining factor, unfortunately. On my parents policy for my 15 year old car, it was around $100 a month. Now I’m 25 and recently got my own policy for a 2016 truck, and I pay around $50 a month.

FTTOHG Has Moved to https://opposite-lock.com > Justino6969
05/31/2017 at 12:56

6 months max doesn’t sound very... progressive of them. Sorry, had to.

Justino6969 > FTTOHG Has Moved to https://opposite-lock.com
05/31/2017 at 12:57

No apologies needed, I always appreciate a good pun. This is also the first policy I’ve taken on, and the first 6 months of the plan, so maybe in the future they’ll let me do more than 6 months at a time.