Six-Month vs. 12-Month Car Insurance: Which to Buy

Six-month car insurance policies are the standard for insurers and tend to be best for those who want the flexibility to switch carriers. On the other hand, a 12-month policy suits drivers who value consistent rates. Regardless of the duration of your policy, make sure to compare insurance quotes at the end of your term to evaluate your options and find the most affordable coverage.

Insurers typically offer six-month car insurance policies over annual ones. This option gives you the flexibility to compare car insurance quotes after your term ends. However, it also means your rates can frequently change — which can be good or bad based on your driving record. On the other hand, annual policies lock your rates in for an entire year, but not all insurers offer them.

Most insurers prefer a six-month car insurance policy to have the flexibility to recalculate your rates based on your driving record in the previous term. For instance, they can increase your premiums to cover their losses if you got into an accident during your last policy period. Alternatively, they can also lower your rates if you’ve had infractions removed, paid off car loans or improved your credit score.

Not all insurers offer the option to purchase an annual car insurance policy, which means you may be stuck with a six-month policy depending on your provider. Of the major car insurers below, only three companies give you the option to have a 12-month term.

Six-month car insurance policies can be beneficial for many drivers. Those who want to try out different insurers, for instance, can do so after every term, giving them a chance to find an insurer that suits them best.

Younger drivers getting car insurance can also benefit from such a short-term policy, especially if they have a birthday that falls within the next six months. As younger or first-time drivers looking for car insurance maintain a good driving record, their premiums may decrease each term.

A six-month policy can also benefit drivers who have improved their credit score, as car insurance for low credit holders is often expensive. Likewise, drivers who have had infractions — such as speeding tickets — removed from their records can benefit from a rate revision at their next policy renewal.

A 12-month term may suit some better than others. For instance, this duration is beneficial for those who maintain a good driving record and want to avoid a twice-annual increase in their premiums. In other words, it’s best for those who prefer consistency in rates over flexibility.

These policies may also benefit those who can afford to pay for an entire policy in full, as some insurers offer discounts for this. On the other hand, it’s also ideal for low-income individuals looking for car insurance who can’t afford any rate increases on a bi-annual basis. Locking in a single rate for the whole year can help in case you get into an accident.

If you expect to get a lower credit score within the year, purchasing a 12-month car insurance policy can be beneficial. This way, you’re sure that insurers don’t factor it into your rates for at least another year, giving you time to improve it before your next renewal.

When everything is kept equal, a six-month car insurance policy will cost about half as much as a policy with a 12-month term. For instance, at GEICO, a six-month auto insurance policy costs an average of $524, while a 12-month policy costs $1,047.

However, once the renewal period comes around for a six-month policy, rates may increase or decrease based on your driving record and how insurers calculate rates. Be sure to remember to renew your policy before it expires, as a lapse in coverage can increase your premium dramatically. If you’re interested in switching providers, your renewal period may also be the best time for you to compare quotes to find the cheapest car insurance for you.

View the table below to compare rates for six- and 12-month policies. Note that the rates mentioned don’t take potential auto insurance discounts into account, which could help you save significantly. For instance, you might be eligible for a “pay-in-full” discount if you can afford to pay your entire six-month or 12-month policy at once.

^{*These rates represent the cost of car insurance for a year calculated with Quadrant Information Services. For six-month policy rates, MoneyGeek simply divided annual costs in half.}