Should I buy a 12 month or 6 month car insurance policy?

We have been asked many, many (many) times if there are substantial benefits to purchasing a 12 month auto insurance policy at once versus a 6 month policy. There can be certain advantages for each policy in either 6 month or 12 month increments as car insurance rates can change depending on several different factors, including time, so let’s get to the bottom of this right here!

Advantages to purchasing a 12-month, paid-in-full policy

  • Your insurance rate will be “locked in” and cannot change (in 2024, car insurance rates are expected to increase another 10%, which would outpace inflation1)
  • One single bill for the entire year
  • You will not forget to pay mid-way through the year
  • If you receive an infraction mid-way through the 12 month period, your rate won’t change during that time period. It may if you were paying every 6 months
  • By paying all at once, you will likely avoid “processing fees” that your insurer must pay when charging your credit card 1x/month (that’s 12 separate transactions they have to run every year vs. just one).

Advantages to purchasing a 6-month, paid-in-full policy

  • If you had an infraction that is due to be taken off your record within a year, your second 6-month premium may be less than the first 6-month premium
  • Provides an opportunity to evaluate your car insurance needs. Perhaps you can find a lower rate from another provider during those first 6 months
  • If you don’t have all of the money for a full year’s premium, splitting it up into a payment every 6 months is, well… better!
  • Again, if you pay only twice a year, you will likely avoid “processing fees” that your insurer must pay when charging your credit card 1x/month

Advantages to paying every month

  • Least amount of money out of pocket for each pay period e.g., $120 month vs $1200 all at once for 12 months (but it will cost more over the policy term)
  • It may be easier to “switch” auto insurance companies if you’re paying monthly instead of waiting for a refund on what remains on your 6 or 12-month payment

From our vantage point, if you’re a good driver and don’t have any infractions, we think it’s wise to buy a 12 month policy. On the other hand, if your driving record is due to become “clean” within 6 months, we recommend you buy a 6-month policy and evaluate your options after your driving record is normal again.

No matter your personal decision, our vote is to avoid the monthly fees and pay the 6 month or 12 months premium up front. You’ll be glad when you’re not getting charged a processing fee that adds up over time.

To compare 12 month or 6 month car insurance quotes online visit, or if you prefer, call 1-800-258-5101 and have a licensed insurance agent walk you through your options, compare coverages and discounts, and help you through your purchase.

Who is Answer Financial?

As one of the nation’s largest and most reputable auto & home insurance agencies, Answer Financial has insured nearly 5 million homes and vehicles. We work with more than 40+ top-rated carriers to save our customers an average of $565 a year on insurance.* 

On our mobile-friendly website, shoppers can quickly compare rates and customize coverages from multiple home insurers. By simply entering your zip code and home address, Answer can search publicly available records like square footage and year built to deliver side-by-side comparison quotes from reputable insurance companies.

Answer Financial can help you compare, buy and often save the smart way on insurance. So before you shop, remember to rely on your insurance experts to find you the right home insurance plan for your needs and budget.


  1. Jazmine on January 11, 2016 at 12:06 am

    Great post!

  2. christina on December 10, 2015 at 1:26 pm

    I have had my car insurance for 6months. No accident, no tickets. I have to renew my insurance, but my insurance is asking for another “Deposit”. Do I have to pay that? or is there car insurance companies that don’t force you to pay another Deposit after your initial sign up (and already given a deposit)?

  3. Janet on November 2, 2015 at 10:23 pm

    Well, I believe it totally depends on the rate of the auto you are purchasing. As you have rightly noted, be it 12 or 6, both have their own advantages. If you find a good credit union like Aspire FCU( New Jersey) to back you, then there’s nothing stopping you from owning your dream car.

  4. Theresa wright on October 26, 2015 at 7:49 pm

    Can you insurance company go up every six months because you had A fender bender you’re at fault I really need to know because my insurance company is doing that every six months they go up $50 more on my insurance

  5. Lloris on January 6, 2014 at 1:02 pm

    Not only you avoid processing fees and interest charges with full payment but also some companies offer between 5 – 10% discounts for one lump sum payment. Always ask if you would be offered discounts if you pay the full amount.

    Also, not every company offer 12 month policies. If this is the option you like, perhaps you should first check if the company you want to get quotes is offering 12 month policies to avoid wasting time.

  6. Aspet Grigoryan on December 5, 2013 at 6:43 pm

    In most states credit is used by insurance companies to predict the likely hood that you may file and claim and how expensive it may be. So if you think your credit is about to improve for some reason then you want to purchase a six month policy and take advantage of the lower rates at next renewal. This is also true if your credit score is about to drop. In that case you want to purchase a one year plan and lock in the rate as long as possible.