Paid-in-Full Discount: GEICO, Progressive & More
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Ah, yes. The beloved paid-in-full discount. While some love this discount, other drivers take a hard pass. Many auto insurance companies reward policyholders with a discount for paying their entire premium upfront instead of monthly. The offer may apply whether you are purchasing a new policy or renewing an existing one.
This guide will help answer all your questions about paid-in-full discounts, including how they work, their advantages/disadvantages, and five highly recommended auto insurers that offer them.
If your insurer does not offer a paid-in-full discount, use Compare.com‘s car insurance quote comparison tool. Enter your ZIP code below to receive online quotes from the best car insurance companies like Farmers Insurance, Allstate, and Liberty Mutual:
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What is a Paid-in-Full Discount?
The paid-in-full discount means your insurer gives you a percentage off of your car insurance premium because you’ve paid your yearly payment in one or two large payments instead of monthly. You can either make a six-month or annual payment to qualify for a discount between 5-10%.
While some insurance companies may not offer auto insurance discounts upfront, they might charge you extra to finance your insurance through monthly payments. You can avoid paying this interest by paying your annual premium in full via checking account electronic funds transfer (EFT) or credit card.
How Do Paid-in-Full Discounts Work?
To better understand what this looks like, let’s consider a driver named Shanice.
Shanice’s monthly rate is $75 after discounts, so at the end of the year, she’ll have paid a total of $900.
However, her insurer offers a 10% discount for drivers who pay in full at the beginning of the year. If she decides to go this route, she’ll make a one-time payment of $810 at the beginning of the year, saving her $90.
That’s $90 that can go toward paying off debt, putting gas in your car, buying groceries, increasing how much you have in your emergency savings, or enjoying a fun activity.
Paying in full allows you to keep more of your money right where it belongs — in your bank account. It also frees you from being tied down with monthly payments. This freedom means you can spend less time paying bills and more time doing what matters to you.
Pros and Cons of Different Payment Frequencies
The three most common payment frequencies we see with insurers are paid in full, monthly installment payments, and pay as you drive.
Paid in Full
You pay your six-month or yearly premium upfront in a single payment.
Reduced Insurance Premiums. You can save up to 10% on your yearly insurance premium or avoid paying extra to finance your monthly payments.
Payment Freedom. You only have to think about paying for insurance once or twice a year and have one less monthly payment.
Steep Upfront Payment. Many drivers can’t afford to pay the yearly premium all at once.
Ties Up Your Funds. Setting aside such a large amount of money ties up your money that you could use for other purposes. If using your credit card, it may also put you on the hook for extra interest charges if you do not pay off your statement balance in full by the due date.
Divide your yearly premium into smaller, monthly installments.
Easier on Your Budget. Paying for your insurance premium in installments is often easier on your budget. Less money leaves your bank account at a time, meaning you’re less likely to be in a tight financial spot paying for car insurance.
Convenience. Many insurance companies allow you to put your monthly payments on autopay. If you tend to forget when bills are due, this may be your perfect option.
Overall Higher Cost. Although the monthly payments are smaller, you end up paying more than a driver who pays in full. Some insurers offer 10-15% discounts for drivers who pay their premiums annually.
Cumbersome Monthly Payment. On the flip side, you might dread having another monthly payment tacked onto your rent, electricity, car payment, and water bill each month. With a monthly payment plan, you lose the freedom to pay your premium in full.
Pay as You Drive
Your monthly premium for a pay-as-you-drive insurance plan is determined by the miles you drive on top of a base fee decided by your insurer. This type of insurance can only be paid monthly because the total varies every 30 days.
Only Held Accountable for the Miles You Drive. Since you only make payments on the miles driven, you have some say in how much your monthly premium will be.
Safe Driving Incentives. Many pay-as-you-drive programs are packaged with telematics programs, giving discounts to drivers who practice safe driving habits such as avoiding nighttime driving, maintaining legal speeds, and soft braking. Also, keeping track of your miles may encourage you to be more mindful of your driving habits, encouraging you to walk/bike versus drive on some occasions.
Difficult for Budgeting. A monthly premium that’s constantly fluctuating can be complicated to include in your budget.
Unpredictability. The number of miles you drive may vary month to month, so you might not be able to forecast in advance how much you will pay in premiums. It could throw a wrench with your monthly budgeting.
Is Paying in Full the Right Option for Me?
Only you can decide if paying in full is the right option. Although you stand to save money by paying in full, you must consider your financial circumstances.
If paying for your car insurance deductible in full puts you in financial turmoil, opt for monthly payments for the time being. After all, you can always put aside money throughout the year and choose to pay in full the following year.
Which Insurance Providers Offer a Paid-in-Full Discount?
Here are some auto insurance companies offering paid-in-full discounts.
Policy Details: All Farmers Insurance policyholders who pay their entire premium up front (before their policy term starts) are eligible for a paid-in-full discount.
Savings: Not disclosed
What Sets Them Apart: Founded in 1928, Farmers Insurance is the sixth-largest insurance company in the country by market share. They offer various insurance products, such as auto, business, life, and home insurance. Accolades include high ratings from A.M. Best, Moody’s, and Standard & Poor’s.
Farmers Insurance policyholders qualify for other discounts, including safe driver, multi-policy, renters, automatic payment, defensive driving, paperless billing, and low mileage discounts.
Policy Details: Allstate policyholders who pay their entire auto insurance premium upfront instead of in installments qualify for a paid-in-full discount.
Savings: Up to 10%
What Sets Them Apart: Founded in 1931, Allstate is the country’s fourth largest auto insurance company, with nearly 11% of the private passenger market. They have several insurance products, including auto, life, and commercial insurance. Their auto policyholders also benefit from various discount programs such as accident forgiveness and deductible rewards, which lowers your deductible amount by $100 for every year of safe driving at no charge.
Other ways to save on auto insurance as an Allstate customer include increasing your deductible, lowering your liability limits, and installing in-vehicle safety equipment, e.g., anti-lock brakes and anti-theft devices.
Policy Details: Paid-in-full discounts are offered to Liberty Mutual policyholders who pay an entire year upfront.
Savings: 5% to 15%
What Sets Them Apart: Liberty Mutual is the 7th largest auto insurance company by market share in the country. Auto policyholders enjoy several benefits, including accident-free discounts, accident forgiveness, 24-hour roadside assistance, and new car replacement. Like Farmers Insurance, they also enjoyed critical acclaim from top independent rating agencies such as A.M. Best and Standard & Poor’s.
Policy Details: Travelers Insurance policyholders get a paid-in-full discount in exchange for paying their entire premium upfront.
Savings: Up to 7.5%
What Sets Them Apart: New York City-based Travelers Insurance is one of the largest insurance companies in the United States. They offer several discounts, including a multi-policy discount that can save policyholders up to 13% when bundling home/condo and other eligible insurance policies.
Policy Details: The General’s paid-in-full discount applies to policyholders who purchase their entire 6-month or 12-month policy upfront. It is not available in all states.
Savings: Not disclosed
What Sets Them Apart: The General is an excellent alternative for high-risk drivers, including those who recently got their license suspended or revoked. Other discounts available to The General policyholders include an innovative one-time Double Deductible discount, which doubles your collision and comprehensive deductible amount for the first 45 days after purchasing your policy (not available in all states).
Policy Details: Progressive policyholders can save 11% by paying their policy upfront.
What Sets Them Apart: Founded in 1937, Progressive is one of the largest auto insurers in the country. Other insurance products offered by Progressive include home, boat, renters, and business insurance. Like many top insurers, it also runs a usage-based insurance program called Snapshot which uses telematics to adjust rates for policyholders based on good driving behavior.
Regrettably, GEICO does not offer a paid-in-full discount. If you are a GEICO customer and want this discount, consider switching to any of the providers above.
What Are Other Auto Insurance Discounts I Can Qualify For?
Check with your insurance company to see if you qualify for any of the following discounts to save more on your car insurance policy:
Good Drivers Discount: If you have had a clean driving record for the last three to five years, expect to be eligible for this type of discount, regardless of coverage options.
Good Student Discount: If you or someone on your policy is a full-time student with a GPA over 3.0, you may be eligible for the Good Student discount. To qualify, you’ll need to be 16 to 25 years old with a B average or higher.
Homeowner/Car Insurance Discount: Own a home and a vehicle? Consider bundling your policies to save up to 25% on home and car insurance coverage.
Multi-Car Discount: A multi-car discount for families with multiple drivers can help you save money on your deductible. You’ll need to insure two or more cars on the same policy to get this discount. Many car insurance companies offer discounts anywhere from 25-30% for a multi-car policy.
Anti-Theft Discount: Does your car have anti-theft features like VIN etching or GPS-based systems? If so, your auto policy might qualify for a discount of up to 25%.
Military Discount: Insurers often give discounts to military members and veterans. Check with your insurer to see how much of a military discount they offer.
Defensive Driving Course Discount: Enrolling in a specialized training program that teaches accident prevention, defensive driving techniques and other rules of the road can lower your insurance rates and reduce points on your driving record.
Pay Your Entire Premium Upfront as Early as Today
Maybe your current policy doesn’t offer a pay-in-full discount, and you want in. Compare.com makes it easy to compare quotes from multiple affordable auto insurance providers like Farmers Insurance, GEICO, Progressive, Travelers Insurance, Nationwide, and Liberty Mutual.
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