What Is the Paid-In-Full Discount?

Most insurers let you choose how you pay for car insurance. You could get a paid-in-full discount if you pay your entire premium in advance. Learn more here.
Man making car insurance payment

Car insurance companies allow flexibility in how you pay your premium. You can make monthly payments or pay your entire premium with one check. Insurers prefer the latter and reward those who do with the paid-in-full discount.

Your provider loves it when you pay your premium on one lump sum because it reduces the possibility of missed payments and, by extension, coverage lapses. When your insurer has your money upfront before your effective period, it exposes them to less risk. With less risk comes a lower premium.

This article will explain how paying for your auto insurance policy in advance qualifies you for a discount. You’ll learn how it works and how much you can save. We’ll also explain the pros and cons of paying off your premium at the beginning of the policy term. Finally, you’ll learn about which companies offer this reward.

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How the Paid-In-Full Discount Works

Auto insurance is expensive, especially if you buy coverage that goes beyond your state’s minimum requirements. But in most cases, you’ll need a policy to drive. Luckily, there are plenty of discounts that you can use to lower your rates. They slice a percentage off of your premium. And you can often qualify for many others to save more.

Paying in advance is a good way to lower your car insurance premium. If you have the money on hand and your insurer offers it, paying upfront is a great way to lower rates. All you’ll need to do is pay in advance for your coverage instead of making monthly payments. The amount you can save depends on your provider and state. This is not available in California.

When your insurer says that you’re paid up, it’s referring to a six-month term. You may also see carriers call this a semi-annual payment. Others might allow you to pay quarterly. Most insurance providers give you the option to select how you pay when you’re setting up your policy.

Paying-In-Full vs. Making Monthly Payments

There are many reasons why you might want to pre-pay your car insurance premium. But there are also some reasons you might prefer monthly billing. Here we look at pre-paying vs. making monthly payments:


  • Less stress. You won’t need to worry about monthly car insurance payments. Instead, you’ll be able to lock up your coverage for months. This makes it harder to miss payments as well.
  • Discount. Many insurers lower rates if you’ve prepaid your premium. It can help you save a little extra on your rates each billing cycle.


  • You’ll need to pay all of it at once. It’s never fun watching a lot of money disappear from your checking account. So, it’s definitely a con when you pay the entire cost of your car insurance policy at once. This can amount to hundreds of dollars in a one-time payment. This might be hard to handle if you can’t afford it right away.

Choose the Payment Plan That’s Best for You

The bottom line is that you should go with the payment plan you feel most comfortable with. Even so, it’s a good idea to take advantage of any savings offered. You’ll have less worry about missing car insurance payments and risking your standing with your insurer.

However, paying monthly can also be a smart choice. You won’t have to foot the whole bill right away. You can just pay the smaller monthly increments. This helps you have more money on hand each month. And for some, less anxiety. Insurers also offer similar discounts for electronic or automatic billing each month. However, they’re usually only for customers that pay monthly.

How Much Does It Save?

There are a lot of good reasons to make a single payment for your premium. Getting a discount is at the top of the list. Insurers don’t always publish details about them online. Availability and savings vary quite a bit by state and person. That makes it hard to provide a dollar amount or percentage saved. Savings from a single auto insurance company depend on your personal details.

Our research shows that you can save anywhere from 5% to 15% when you prepay. For instance, Infinity says that it saves policyholders between 5% and 11%. Ask your agent if making one lump-sum payment qualifies you for any savings.

Companies That Reward Policy Prepaying

Many of the top car insurance companies reward policyholders for prepaying their premiums. But they may offer different savings. They might also run their programs in different ways. Here’s a list of major insurers that offer this discount as well as a look at how their programs work:


Progressive lowers rates about 11% when you pay in advance, but how much you save will likely depend on facts about you, as well as the state that you live in.

Liberty Mutual

The Liberty Mutual preferred payment program rewards customers who pay for their car insurance in one or two payments. Liberty Mutual doesn’t list a percentage of savings on its website. This indicates that it’ll depend on you and your state. Be sure to speak with your agent about how much you should save.


Travelers reduces qualifying policyholders premiums about 9% when they prepay. When you’re setting up your car insurance policy, make sure to ask your agent how to choose a payment plan that qualifies. You should also ask them about how much you save by making a single payment.


Allstate FullPay provides customers with a discount of about 9% if they prepay their auto insurance. All you’ll need to do is make sure you pay your entire premium before your policy period begins. Once you’ve settled up, you’ll see your savings.

Farmers Insurance

The Farmers paid-in-full discount puts up to 6% back in your pocket. You qualify when you pay the balance of your account at the beginning of the policy term. Your Farmers agent will likely have more info about how much you’ll save.

Erie Insurance

Erie offers a payment perk for paying your car insurance policy in one lump sum. It rewards qualifying policyholders by lowering rates by about 9%. It’s perfect for those that prefer to paying all at once. Be sure to contact Erie for more details.


Dairyland offers a sweet incentive to make fewer, larger auto insurance premium payments. It’s called the “payment frequency discount.” It’s basically the same thing, but you may select options besides month-to-month or making one lump sum payment.


Companies prefer that you pay for an entire car insurance policy term up front. When you do, Mercury will give you a paid-in-full discount. If you plan on making a one-time payment each year, be sure to take advantage.

NJM Insurance

New Jersey Manufacturers, or NJM, prefer it when you pay for your premium with a lump sum payment. The company will reduce your rates when you do. Savings are usually small, but even small ones add up. Contact NJM for more details.


When you pay your car insurance balance upfront, Amica will reward you. There isn’t much information about it on the insurer’s website. Savings often vary from state to state. To learn more about these savings, contact Amica or ask an agent.


Paying your car insurance by making a single payment can get you a lower premium. Kemper offers a discount when you write a single check. Contact Kemper to find out how much you can save when you skip the monthly payments.

The Hanover

The Hanover also offers policyholders a deal when they pay their entire policy upfront. There are few details on the company’s website. So, you’ll need to contact The Hanover to learn more.


Shelter lowers auto insurance rates by 10% when you pre-pay for each policy term. You have the option of paying once a year or every six-month term to qualify.

Keep in mind that these aren’t the only companies who have a paid-in-full discount. They’re just some of the most common ones that offer it. Other insurers might also offer this reward, including local carriers. That’s one reason why you should do an auto insurance comparison from time to time. Comparing quotes can help you find better discounts and rates.

Paid-In-Full Discount by Company

Insurance CompanyMax Savings
Liberty Mutual5-15%
The HanoverVaries
Note: table data found on the above insurers’ websites.

Frequently Asked Questions

Does the paid-in-full discount make car insurance cheaper?

Your premium will be cheaper and more affordable if your insurer offers this discount. The savings aren’t significant in the way bundling is, but every bit helps. It isn’t offered by every car insurance company, though.

When shopping for auto insurance, ask your agent if you can pre-pay and receive a discount. Remember that this means you’ll be on the hook for the whole premium all at once. Only do it if you can afford to.

How far in advance do you need to pay in full to qualify?

In general, it means buying car insurance coverage for six months in advance. Insurers often provide quarterly and monthly payment plans. However, six-month terms are standard. Some companies even offer 12-month plans. It’s a smart idea to consult with your provider or financial advisor before you make any decisions on how you pay.


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