6-Month vs. 12-Month Car Insurance Policies

June 19, 2013

Different car insurance policies work for different customers. This is simply a fact of the individual nature of consumption. Whereas one person may choose to purchase short term car insurance, another may find that long term car insurance is a wiser investment.

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Car Insurance Policy Lengths

People typically buy 6-month car insurance policies. However, they are also sold in 3-month and 12-month packages. If you only need car insurance for 3 months, it does not make much sense to buy 6 months worth of it. If you are planning to maintain your car insurance for an indefinite period of time, it may be worth your while to purchase longer term car insurance.

6-Month vs. 12-Month

The biggest difference between 6-month and 12-month car insurance--besides the premium--is that you will be on the same policy for a longer period of time with the 12-month type. 12-month car insurance lets you put the policy out of your mind for a longer duration of time. You won't have to worry about renewal for an entire year. You also buy yourself an extra 6-months of time where the premiums won't increase. Although 6-month insurance is the most common, if you are interested, inquire about 12-month insurance. You might even receive a discount for insuring for an entire year.

Fees or No Fees

Whether you buy a 6-month or a 12-month policy, it is always better to pay it in full. When you agree to make monthly payments, you are assessed a fractional premium fee (sometimes a flat fee) for each payment. You are essentially paying the insurance company for breaking up your policy into segments. Avoid these fees by paying in full.

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A 6 month insurance policy is more common, but with a 12 month policy, you may receive a discount for committing to a longer period and you buy more time that your premiums won't go up. Ask about both options before you decide if a short term or a long term policy is the way to go.