I'm Saving $90 on My Car Insurance With This One Simple Step
Looking for a way to save money on car insurance costs? Some drivers can keep more money in the bank with a paid-in-full premium discount. Here's how it works.
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No one likes paying for car insurance, but it's a necessary expense that you shouldn't skip. Insurance premiums can vary greatly depending on where a driver lives, what kind of vehicle they have, their age, and their driving record.
But what if I told you there could be an easy way to get a discount the next time you renew your car insurance coverage? I'll explain how I recently saved $90 on my car insurance premium with one simple payment strategy.
This simple step will save me $90
My car insurance company is Progressive. When it's time to renew my policy, I'm given two payment options. One option is to pay for my coverage every month, which breaks the total premium cost into smaller payments.
The other option is to pay my entire six-month premium in full. In exchange for paying for my coverage up front, my car insurance company offers me a big discount. For my most recent renewal, the savings worked out to be about 15% off my six-month policy price -- or nearly $90 in savings. That's money I can put to good use in other ways, like topping up my emergency fund.
For some, paying for an entire six months or year of car insurance coverage may feel daunting -- and even impossible. With how costly insurance premiums can be, I can understand that feeling. But I have a strategy to help you better prepare so you can afford to pay your entire bill at your next policy renewal.
This will make paying your entire premium more affordable
Do you want to get a discount on your premium by paying your bill in full but are worried about the cost? I'll explain how I make paying my six-month premium less financially overwhelming.
Throughout the year, I have money automatically transferred from my checking account to my high-yield savings account for various less-frequent expenses, like my six-month car insurance premiums, yearly AAA membership dues, and yearly contact lens order.
Setting a smaller amount of money aside every two weeks feels manageable and ensures I have enough money in the bank when it comes time to pay these expenses. The money I need to cover my next six-month car insurance premium is already in my savings account.
For drivers who want to qualify for a pay-in-full premium discount, this savings technique can help. It's free to set up automatic transfers through your bank. No longer having to manually move money from your checking account to your savings account will save you time. Plus, you can slowly save up for more costly expenses like insurance premiums.
Look for ways to reduce your insurance costs
Life is expensive, and the prices of everyday goods and services continue to rise. For drivers feeling the strain of expensive insurance premiums, a paid-in-full discount is one easy way to save money.
Other ways include bundling insurance coverage (for example, purchasing your home and car insurance through the same company) or taking a driver safety course to improve your skills. Check for discounts like this to avoid overpaying for coverage.
It's also worthwhile to shop around and compare rates between car insurance companies. You may be able to get a better rate by switching insurers. Ready to get some quotes? Review our list of the best cheap car insurance companies.
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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool recommends Progressive. The Motley Fool has a disclosure policy.
