6-Month vs. 12-Month Car Insurance

Choosing between 6-month and 12-month car insurance affects how often your rates can change, when you pay premiums, and how much flexibility you have to switch carriers. Understanding the differences helps you pick the policy length that matches your driving record, budget, and future plans.

The main difference between 6-month and 12-month car insurance is how often your rates can be adjusted and when you need to renew. Here's how they compare:

Both policy lengths provide the same coverage. The difference is purely administrative and affects when your rate can change.

6-month policies work well for drivers who had a violation 2-3+ years ago, new drivers building insurance history, and those expecting major life changes. 12-month policies are better for drivers with clean records who can pay in full and want rate stability.

A 6-month policy gives you more frequent opportunities to benefit from rate decreases and greater flexibility to switch carriers. Consider a 6-month term if you:

• Had a ticket or accident 2-3+ years ago: Violations affect your rates for 3-5 years. As they age and approach the drop-off date, insurers may begin reducing your rate. With 6-month policies, you'll see those reductions sooner than waiting a full year for renewal.
• Are a new driver building insurance history: Your rates often drop as you gain experience. More frequent renewals mean faster access to better rates as your driving record improves.
• Expect major life changes soon: Planning to move, get married, buy a new car, or change jobs? A 6-month term gives you a natural opportunity to update your policy without cancellation fees. If you move to a new state with lower insurance rates, you can switch to a local insurer sooner.
• Want flexibility to shop around: If you like comparing rates frequently, 6-month terms give you two chances per year to switch carriers without penalties.
• Trade-offs to consider: With renewals happening twice yearly, insurers have more opportunities to reassess your risk profile and raise your rate. You'll also need to track renewal dates more often, increasing the chance of accidentally letting coverage lapse.

A 12-month policy locks in your rate for a full year, providing budget predictability and fewer renewal hassles. Consider a 12-month term if you:

• Have a clean driving record: If your driving history is strong and unlikely to improve much in six months, a 12-month policy protects you from rate increases. Your rate stays locked in for 12 months, offering predictable costs and protection from mid-year price hikes.
• Want predictable budgeting: Knowing your exact insurance cost for a full year makes financial planning easier. Renewing only once yearly also reduces the risk of a lapse in coverage.
• Can pay in full for maximum discounts: Many insurers offer bigger discounts when you pay an annual premium in full rather than semi-annually (5-10% vs. 3-5% for 6-month), which can save you $50-150 annually.
• Prefer less administrative work: One renewal per year means fewer billing cycles, payment reminders, and policy documents to manage.
• Live in a high-rate area: If your state or region is seeing significant rate increases industry-wide, a 12-month policy might lock in current rates before they jump.
• Trade-offs to consider: You're locked in for longer, so switching insurers may require waiting or paying a cancellation fee. If a better rate becomes available mid-term, you might have to stick with your current provider until the year ends.

Often, you won't have the choice between 6-month and 12-month policies, with most insurers defaulting to one term length. GEICO and Progressive primarily offer 6-month policies, while State Farm defaults to 12-month terms.

If you do have a choice between both options, choose 6-month if you expect your rate to improve soon (violations aging off, building credit) or anticipate major life changes. Choose a 12-month if you have a stable situation and want to lock in your current rate for a full year.

If you're paying monthly either way, the policy length matters less for cash flow, though it still affects when your rate can change.

Both policy term lengths provide identical coverage. The only difference is how often your rate can be adjusted and when you renew. Here's what each term means:

A 6-month car insurance policy is auto coverage that lasts for six months and automatically renews at the end of the term. Your insurer can adjust your rate at each renewal based on your driving record, claims, and market conditions. Most major insurers like GEICO and Progressive offer 6-month policies as their default option.

Six-month car insurance policies benefit many drivers. If you want to try different insurers, you can switch after every term to find one that suits you best.

Younger drivers getting car insurance benefit from short-term policies, especially if they have a birthday in the next six months. As younger or first-time drivers seeking car insurance maintain a clean driving record, their premiums often decrease each term. Teen drivers pay higher rates due to inexperience and statistical risk factors, with rates varying by state and insurer.

Six-month policies also benefit drivers who've improved their credit score, since car insurance for drivers with poor credit costs more (some states prohibit or limit using credit scores for insurance rates). Similarly, drivers who have had infractions like speeding tickets removed from their records benefit from rate revisions at their next renewal.

A 12-month car insurance policy is auto coverage that lasts for one full year with your rate locked in for the entire period. Your insurer can only adjust your rate at the annual renewal (unless you make mid-term policy changes like adding a driver or vehicle). State Farm and Allstate offer 12-month policies as their default option.

A 12-month term suits some drivers better than others. This duration benefits drivers who maintain a clean driving record and want to avoid twice-yearly premium increases. Choose this option if you prefer rate consistency over flexibility.

These policies benefit drivers who can afford to pay for an entire policy upfront, since some insurers offer full-payment discounts. They're also ideal for low-income individuals looking for car insurance who can't handle rate increases twice yearly. Locking in a single rate for the whole year protects you if you get into an accident.

If you expect your credit score to drop within the year, buy a 12-month policy. Insurers won't factor the lower score into your rates for at least another year, giving you time to improve it before renewal. Some states prohibit or limit using credit scores for insurance rates.

A 6-month car insurance policy often comes with lower upfront costs, while a 12-month policy offers price stability and protection from mid-year rate hikes. The annual cost is similar regardless of term length, but 12-month policies often qualify for larger paid-in-full discounts (5-10% vs. 3-5% for 6-month), which can save you $50-150 annually if you pay upfront. Compare rates from three to five insurers; the difference between companies can be up to 100%. Follow our guide on how to get car insurance for the best results.

*These rates represent the cost of car insurance calculated with Quadrant Information Services. 6-month rates are annual costs divided in half. Real 6-month policies may have different pricing structures. Your actual rates may vary based on individual circumstances.

The choice between a 6-month and 12-month car insurance policy comes down to your need for flexibility versus stability. A 6-month policy offers more frequent chances to adjust or switch, while a 12-month policy provides rate consistency and fewer renewals. Consider your driving habits, financial goals, and how often you want to reassess your coverage before deciding.

We analyzed policy structures and pricing from major insurers, including GEICO, State Farm, Progressive, Allstate, and Farmers, to compare 6-month and 12-month car insurance terms.

Data Sources: Our research used data from Quadrant Information Services and state insurance departments, analyzing 83,056 quotes from 46 companies across 473 ZIP codes.

Driver Profile: We used a 40-year-old male driver with a clean driving record, excellent credit score, driving a Toyota Camry LE with 12,000 miles driven annually. To calculate average costs across different regions and coverage requirements, we adjusted this profile by location, coverage type, and amount.

Coverage Levels: This study compared premiums between six- and 12-month policies. For full coverage (comprehensive and collision), we used 100/300/100 limits with a $1,000 deductible when calculating national averages. For state-specific data, we used 50/100/50 coverage with a $1,000 deductible.

Learn more about MoneyGeek's methodology.