How to stop paying car insurance monthly

Car insurance… one of those necessary evils budget items. Is it just me or does it increase every year?

Aggravating upcharges or otherwise… You just gotta have it! One of the things I love to do is get the annual discount, where paying in full saves you a nice chunk of change – generally a couple hundred bones!

How can you pay annually if you are used to paying monthly, and you can’t figure out how to swing the large, all-at-once cost of an annual car insurance premium?

When we first bought our car in 2013, after living abroad with no need for a personal vehicle, we realized we could not afford to pay the entire premium all at one time. The solution we came up with was simple:

Divide the big premium by the months you have left to save it up, and then squirrel it away on the side at the same time as you are paying the monthly premium. You are “sinking” for the annual premium while paying the monthly one. This was much easier on our budget than figuring it all out at one time. Then, once we paid the annual premium, we set our budget to continue automatically saving for the yearly premium in monthly chunks. Before celebrating your excellent fiscal stratagem, make sure to set up your bank to auto-draft your savings for your insurance and keep the savings in your budget. The next time the policy renewal date comes around, you have the savings sitting in an account, waiting for you to reap the discount!

 

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