Get a Paid-in-Full Discount

A paid-in-full discount is one of the reductions insurers offer to save you money on your auto insurance policy. All you need to do is pay for six or 12 months of your premium up front, depending on your insurance company’s requirements.

Many drivers make monthly payments for their auto coverage — reasons may vary, but paying by the month allows a person to switch carriers at any time. Insurance companies offer this discount to help drivers save money, which also keeps them with the same company for a longer period.

Insurers like to reward their customers by providing policy discounts. Be sure to ask your agent about other discounts for which you may be eligible.

If you pay for your car coverage in full when you purchase insurance or when your coverage renews, you may qualify for this discount.

Your insurer may consider paying ahead for six months of coverage as paid in full, or you may be required to pay for 12 months of coverage to receive this discount. Be sure to ask your agent about their requirements.

Who Does Not Qualify for a Paid-in-Full Discount?

If you opt to make monthly payments, you do not qualify for this discount.

Also, your insurance company may place limits on how many discounts you can apply to your policy. So, if you’re already receiving other discounts, you may be ineligible for this one. If there are limits, find out all the discounts for which you are eligible so you can apply

When drivers pay for their auto insurance in full up front, insurers save administrative costs they’d otherwise spend on processing your monthly bill. By paying for your coverage up front, you help them save money, and they, in turn, help you save money through this discount.

Paying for your insurance in full up front can reduce your premium by up to 9%. This means, for example, if your premium is $500, the reduction would bring it down to $455. That’s a whole lot of savings you can use for other things.

This method of payment also saves you from late fees you may have been subject to had you opted to pay monthly and forgotten to make a payment on time.

Most insurance agencies offer a range of discounts, from passive ones that don’t require much action on your part to more active ones.

Passive discounts include those you qualify for without having to do much of anything except tell your agent of your circumstances. When providing your agent with your vehicle information, for instance, you may qualify for the new car discount if your car is less than three years old, which can save you up to 10%.

Other discounts include:

• Safe driver: Save 10% to 30% if you’ve been ticket- and accident-free for three to five years.
• Defensive driver course: Save up to 5% if you pass an approved driver course.
• Senior driver: Save 15% to 35% if you’re over 65.
• Bundling policies: Save 10% to 25% when you purchase two or more policies (for example, auto and renters or auto and homeowners) from one insurer.
• Multi-vehicle: Save 10% to 25% when you insure more than one vehicle with one insurer.
• Military, first responders, and teachers: Save 15% as a thank you to those who serve or have served.
• Good student: Save up to 25% for high school and college students who maintain a certain GPA.
• Low mileage: Save up to 5% if you drive under a specified number of miles each year.

Another way to lower your premium is by adjusting your deductible — a higher deductible will lower your premium. Just be sure you have available money to cover that deductible in case you have an accident.

If you opt to set up automatic monthly payments from your checking account instead of paying in full up front, you can earn a decrease of 5% off your premium.