The Car Insurance Move That Can Cut Your Costs By Up To 20%

Car insurance can feel like a large expense that, for the most part, goes unused. However, with the average price of car insurance reaching $2,297 annually, as of January 2026, per Experian, it can be well worth it to find ways to save on your car insurance premiums. One of the best ways to save money on automotive insurance is be by paying your premiums up front.

Paying for a car insurance policy up front, sometimes referred to as paid-in-full, involves paying for the entirety of a 6- or 12-month policy at the start of the policy — instead of via monthly installments. These types of payment options are offered by many well known insurers, including Geico, Progressive, Amica, and Erie Insurance Group (many of them also among the most trustworthy car insurance companies). Even better, this option often provides discounts — anywhere from 5% to 20% — when compared to a standard monthly payment option.

Oftentimes the paid-in-full payment method can help you avoid monthly service or installment fees, which can range from a couple of dollars to a percentage of a monthly premium. However, the real savings happens because insurance companies financially benefit from paid-in-full payment plans. For starters, by collecting payments upfront, insurers can reduce the risk of a policyholder stopping payments –- which could lead to collections or even legal action. However, more importantly, paid-in-full policies provide improved cash flow for businesses.

Despite the potential savings, paying for car insurance in full requires having a large lump sum of cash to cover the policy — something that can be more difficult for individuals on tighter budgets. Additionally, paying in full can come with certain restrictions, depending on the company, that may make it harder to terminate a policy if necessary. Plus, it may not be the right choice for those needing more short-term coverage. That said, it could still be worth looking, especially if you also qualify for other insurance discounts like home and auto bundles.