How You Pay Your Premium Can Lower Your Auto Insurance Costs

Here’s something that a lot of insurers don’t want you to know: how you pay your premium can raise or lower your insurance bill.

Car keys and money

A lot of people could save a lot of money on car insurance by changing the way they pay their premiums. The problem is that insurers don’t want consumers to know this because they make more money if people pay their bills in certain ways.

Fortunately, the Car Insurance Samurai is dedicated to helping you lower your bills. I’ve prepared a list of some of the ways in which altering your payment can lower car insurance rates.

Here are some payment changes that can lower your auto insurance premium:

  • Most insurance companies will give you a discount if you pay your insurance premium every six months or every year. Some will also give you a discount if you pay your premium every quarter. They give you a discount because it means less paperwork for them. Paying once a year or once every few months can reduce your costs. It can also eliminate the hassle of paying a bill each month and reduce the chance your policy might get canceled because of a missed payment. Check your insurance company’s website to see if they offer the option of paying less frequency.


  • Some insurance companies actually offer lower rates if you sign up for a yearly or quarterly payment plan. Insurance comparison websites often let you compare the frequency of payments and the different rates available.


  • You can save money and reduce the chance of policy cancellation by using your checking account’s electronic bill pay feature to pay your premium. This eliminates the cost of postage and checks and the chance a payment will get lost in the mail. It also enables you to send out a payment when you know the money is in your account. Another advantage to electronic bill pay is that it is easy to confirm if the payment has been made. Since the money goes directly to the insurer, you have an added sense of security.


  • Some insurers may offer a discount if you set up an automated payment. This also reduces the chance of cancelled premiums. The drawback is that you may have no control over when the payment goes out.

  • You might be able to get some cash back by paying your insurance premium with a credit or debit card.


  • If you’re driving a junky old car, you may not need to pay for collision insurance, which covers damage to the vehicle. It is possible to buy just liability insurance, which can be much cheaper. Be careful though; you will still be liable for damage in accidents even if you have less insurance. Another problem is that some cheaper liability policies come without uninsured motorists’ coverage and other protection you really need.


Payments are yet another reason why you need to carefully study auto insurance before you buy. What you don’t know can cost you a fortune when you buy a car insurance policy.