Here's Why I Pay My Auto Insurance Premiums Every 6 Months

When you drive a car, there are many expenses to pay. Of course, there's the initial cost of purchasing your vehicle and the expense of an auto loan if you're financing it. You must also pay regular maintenance and repair expenses to keep your car in safe, working condition.

Another cost that drivers pay for is auto insurance. The price you pay can vary greatly, and factors such as your driving history, the type of car you have, and location can impact your rate. Some drivers pay much more than others for coverage.

Did you know that altering how you pay your car insurance bill could result in savings? Keep reading to find out why one writer pays her auto insurance premiums every six months. Drivers who are looking for additional savings may decide to follow the same strategy.

Unlock insurance discounts with this payment choice

Similar to other expenses, many drivers pay their auto insurance premium costs monthly. But that may not be ideal if you're trying to maximize your savings. Many auto insurers offer discounts to drivers who pay their yearly or six-month premium upfront.

Switching how you pay your bill could result in significant savings, allowing you to keep more money in the bank. My auto insurer doesn't offer an annual payment option, but it extends a discount to drivers if they pay their six-month policies in full. By doing this, I qualify for a 15% discount on my six-month policy rate.

I used to pay for coverage monthly, but several years ago, I switched to paying the entire six-month premium to unlock the savings provided. The first time I paid my six-month policy in full, it stung because I wasn't used to spending so much at once. But I knew I was making a sound financial choice because I received a sizable discount.

If you're a driver looking to trim some of your spending and want to find ways to reduce your insurance costs, you may want to see if your auto insurer offers payment discounts. Life is expensive, so any money saved is a win for your bank account.

Here's how I financially prepare

For many people, paying a six-month or annual premium upfront is expensive. If you're considering utilizing this payment strategy, make sure you can cover the cost of your bill without accumulating credit card debt. You should only pay with a credit card if you can pay the bill in full to avoid being charged expensive credit card interest fees.

One way I cope with the pricey bill is by stashing away money in my high-yield savings account throughout the year. When it's time to renew my six-month auto insurance policy, I have the money already saved. I charge my rewards credit card so I earn rewards and then use my savings to pay myself back when I pay my credit card bill.

Now you know any easy way to save on insurance costs. Don't ignore ways to save money if you're working to improve your finances. Small life changes like this could help you keep more of your hard-earned money. For additional tips, check out our personal finance resources.