6-month vs. 12-month auto insurance: Which is better?

Q: Does car insurance go down after six months?

If you have a 6-month car insurance policy, it may go down , but it could also go up. Your policy may be reviewed after six months and your insurance carrier will determine your new rates. Your rates will likely increase if you’ve had any speeding tickets or accidents or moved to a new area with a higher claims history. Conversely, if you’ve had a moving violation ready to drop off soon, you won’t have to wait the full 12 months and can look forward to a better rate upon the 6-month policy review.

6-month vs. 12-month auto insurance

A six-month and a 12-month auto insurance policy offer the same coverage options, but the rate-lock period differs.

“In other words, the six-month policy is reviewed twice a year, while the 12-month policy is reviewed annually,” McChristian says. “At the end of the policy, the insurer will look at the factors affecting the cost of insurance and determine if the insurance premium you pay must be adjusted.”

Before choosing a policy term, compare how six-month and 12-month car insurance policies differ in rate review frequency, flexibility and availability below.

Feature	6-month policy	12-month policy
Term length	Six months	One year
Rate review	Twice a year	Once a year
Rate stability	Lower	Higher
Availability	More common	Less common
Coverage	Same coverage	Same coverage
Best for	Flexibility and faster rate changes	Predictable costs
Main downside	Rates can change sooner	Savings may take longer

12-month policies lock in your rate for an entire year, which is appealing because your rates can’t go up during that term. Another benefit is that any car insurance discounts you qualify for will apply for the entire year.

What is a 6-month car insurance policy?

A 6-month car insurance policy is a standard insurance policy in terms of coverage and has a six-month policy term. For 6 months, your rate is locked in. After six months, your insurance carrier may change your rates. Any changes to your driving record or personal situation can trigger a change in the cost of your policy.

You have the option of renewing or canceling. Your insurance company can also nonrenew your policy at the six-month mark if there are valid reasons.

Pros of 6-month car insurance policy:

It's more affordable to pay upfront, which can earn you a discount
If something changes, such as an improvement in credit, you will see lower rates sooner

Cons of 6-month car insurance policy:

If something changes that will increase your rates, you'll see that increase sooner
The insurance company can review and change rates every six months

What is a 12-month car insurance policy?

A 12-month car insurance policy covers you for one full year and keeps your rate locked until the annual renewal. It offers the same coverage as a six-month policy, but gives you more rate stability because your insurer reviews your premium once a year instead of twice.

If you’ve had an address change, a change to your driving record (speeding tickets or accidents), or made another change, such as adding a new driver to your policy, your rates will change as well.

Remember, sometimes your rates go up regardless of anything you have done (or not done). Insurance carriers often raise their rates across the board because of external factors.

Pros of 12-month car insurance policy:

Your rate is locked in for a full year
If you pay annually, you won't have to think about car insurance as often

Cons of 12-month car insurance policy:

If something changes that would decrease your rates, it will take longer to see the change
A year's premium may be too expensive to pay up front.

Is it cheaper to pay for car insurance every six months?

Paying for car insurance every six months can lower your total cost if your insurer offers a paid-in-full discount. The policy term does not guarantee the cheapest rate, though. A 12-month policy protects you from a rate increase longer, while a six-month policy can help you access lower rates sooner.

“Typically, a driver may find a lower price with the 12-month policy because it locks in the rate for a year,” McChristian says. This is in contrast to a 6-month policy, which will be reviewed after the six months are up. Your rates could go down or up.

Regardless of the term length, you may be able to get a discount if you pay your premium in full up front. With a 12-month policy, you’ll only have to pay once a year.

There are a few instances where a 6-month policy may be the cheaper option. For example, young drivers are the riskiest to insure, but rates start to drop around age 19-20. If you’re going to hit a birthday during your policy term, you may consider a 6-month policy, so you’re not locked into the teen driver rate for an entire year.

How to choose the right auto insurance policy term length

Choose a six-month policy if you want flexibility, plan to shop often, or expect your rate to improve soon. Choose a 12-month policy if you want rate stability and can find an insurer that offers it. Since annual policies are less common, compare both term options before you buy.

Some people also like having an annual payment they can factor into their budget, which you get with a 12-month policy.

“That being said, an auto insurance shopper might find it challenging to find a 12-month policy. Most are six-month policies,” McChristian says.

If you can find a 12-month policy, it’s a good way to prevent more frequent rate increases.

FAQ: 6-month vs. 12-month car insurance

Does car insurance go down after six months?

If you have a 6-month car insurance policy, it may go down, but it could also go up. Your policy may be reviewed after six months and your insurance carrierAn insurance carrier is the company that provides your car insurance policy and pays claims. will determine your new rates. Your rates will likely increase if you’ve had any speeding tickets or accidents or moved to a new area with a higher claims history. Conversely, if you’ve had a moving violation ready to drop off soon, you won’t have to wait the full 12 months and can look forward to a better rate upon the 6-month policy review.

Can you get car insurance for six months?

Yes. Six months is the standard term length for many car insurance policies. Your coverage runs for six months, then renews unless you or the insurance company decides not to continue the policy.

Is it better to pay car insurance monthly or every six months?

If you pay every six months, you may earn a paid-in-full discount. However, for many people, monthly payments fit better into the budget. It depends on your finances and how you prefer to handle bills.