6-Month vs. 12-Month Car Insurance Policies

June 10, 2016

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.

Drivers 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 doesn't make much sense to buy 6 months' worth of it. If you're 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're 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's 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.

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- or long-term policy is the way to go.