The full payment discount is just what it sounds like: pay your bill in full and then get a discount. To be eligible for this discount, you'll have to pay for the full term of your policy at the time of purchase. When you do, you can be eligible for a one-time discount to reduce your premium. You can get a discount on the full payment of car insurance if you pay your premium in a single payment.
Five of the 10 largest insurance companies offer a discount on the full payment, and the requirements are generally the same among insurers. However, the exact discount amounts may vary by company and state. For example, the Travelers full-pay discount can help you save up to 7.5% on your premium. Less money will leave your bank account at once, which means you're less likely to find yourself in a difficult financial situation paying for car insurance.
While some insurance companies may not offer discounts on auto insurance up front, they may charge you more to finance your insurance through monthly payments. The monthly premium for a pay-per-drive insurance plan is determined based on the miles you drive, in addition to a base rate determined by your insurer. The discount paid in full means that your insurer offers you a percentage discount on your car insurance premium because you have paid your annual payment in one or two large payments instead of monthly payments. If paying your car insurance deductible in full puts you in financial trouble, opt for monthly payments for now.
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