| Auto Insurance
african american girl with cash floating near her head

You don’t look forward to it but you have to do it – pay your car insurance bill. Some people choose to coordinate their monthly payments with their paychecks, while others prefer to pay for their 6 or 12 month policy up-front, in one lump sum. If you haven’t explored the benefits of paying for your policy in full, take a look at the advantages below. With the average tax refund at about $3,000, being able to pay for your policy in full may be more realistic than ever. Read on to see if taking care of the full cost of your insurance at one time is right for your budget and lifestyle.


With the daily demands of keeping track of work, family, and finances, paying for your policy in full means one less monthly bill to worry about.  You won’t have to worry about mailing a check, drafting money from your bank account, or visiting your local insurance office to make a payment each month.

Lower Cost

By paying in full, you’ll avoid the fee associated with setting up a monthly installment plan, along with the fee you may be charged for making your monthly payment. If you choose a payment plan*, and miss your payment you could be subject to a late fee.  And, if you’ve let your policy cancel for nonpayment, you might have to also incur cancellation and reinstatement fees.

Monthly Budgeting

When you take care of your car insurance with one payment, you’ll no longer have to factor your car insurance into your monthly budget – because you’ll already be paid up! Plus, paying in full when you have the money means you won’t have to worry about going without car insurance later in the year because of an unexpected change in your finances.

Policy Term

Whether you’re paying in full or by the month, you’ll also want to think about the length of your policy term: do you want to lock-in your rate for 6 months or 12 months? There are advantages and disadvantages to each of these policy terms.

With a 12-month term, your insurance rate is “locked-in” for a whole year. If you get a traffic citation midway through the term, your rate won’t increase during that time period. Also, some products have policy fees that would be charged each term, so a driver with a 6-month term would end up paying those fees twice in a 12-month period!

With a 6-month term, you can re-evaluate your car insurance needs and shop for better rates sooner than someone with a 12-month term (many carriers impose an early cancellation penalty if cancellation is requested by the insured). And, if you maintain a good driving record or have a violation that is due to be taken off your record within a year, there’s a chance that your second 6-month premium could be less than the first 6-month premium.

Which option do you think is right for you? Talk to one of our agents at 1-877-GO-DIRECT or visit your local Direct Auto Insurance store to learn more about selecting a policy term or making a car insurance payment.


*Not all pay plans are available in all states and are subject to terms and conditions.