By June 29, 2007 1 Comments Read More →

How to lower your car insurance premium by getting rid of installment fees

Reader question:

I found out I’m getting charged installment fees on my car insurance premium. What are these?


Great question.

They’re basically a few that allows you to pay your premium in parts instead of all at once, kind of a service fee. Normally if you pay for something that is usually paid in full, like a traffic ticket, you have to pay a few bucks extra for setting up a payment plan. It’s the same way with car insurance, even though most people don’t pay their premiums all at once. It’s almost a hidden fee that most people are unaware of. As it seems normal to pay for your insurance once every month, it would strike many as a little weird that it should be considered unusual enough to set up a payment plan for there to be a fee with it. But so it goes.

Called ‘fractional premium fees’, these usually amount to less than five dollars a month and many have no problem paying for them. However if you think about it, they add up. Five dollars a month for twelve month is almost a hundred dollars by the end of the year. And you can’t avoid these fees just by shaking up the way you make payments, by making half every six months or paying quarterly. They’ll always be there.


One great suggestion for saving a little more money on your car insurance is to make these extra fees unnecessary. Granted, it only works if you have enough money to pay your whole premium up front, and that might not be possible in more expensive areas. However, these fees can be avoided by paying all at once, and not only that, but you can be positive of being constantly insured for the rest of the year. It simplifies your car insurance by taking away the monthly hassle, and those few extra bucks.


Fashun Guadarrama.

Posted in: Auto Insurance

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  • Gabriel

    I have the same question myself. Thanks for enlightening us! Nice blog, by the way! :)