The standard US auto policy term is six months.

Insurers offer a discount of ~15% if you pay in full up front.

Insurers also refund any "unused premium," net of an early cancellation fee, which is usually 10% of unused premium.

Let's compare paying for your policy in full up front against paying for it monthly.

Paying in full up front

Total policy premium


Paid in full discount


Premium if paid in full


Let's say you choose to pay the premium in full, and cancel the policy after three months:

Paid in full premium


Unused premium at cancellation


Early cancellation fee (10%)


Premium due back to you



Net premium, Paid in full up front


Paying monthly

Total policy premium


Monthly payments



Net premium, Paid monthly



In this example, paying in full and cancelling after three months is a slightly better deal than paying monthly:

Here's another thing to consider: paying in full for six months means less things that might require your attention during your visit.

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