Are you currently paying your car insurance monthly? Car insurance providers offer lots of different payment plans when it comes to car insurance policies. All payment plans are not created equal. Discounts are actually offered depending on which option you select.

Traditional through the mail monthly payments: Making your car insurance payment through the mail, over the phone, or even online on a monthly basis is probably the worst way to make your payment. Yes, even online if you are processing the transaction yourself, you are probably losing money. You are paying extra for service fees, possibly late fees, and could even be losing an extra discount.

The only way manually paying your payment monthly could benefit you, is if it prevents you from bouncing your account. Money management is not always easy. Consider your specific situation before choosing a car insurance payment plan.

Check into automatic withdraw: An increasingly popular payment method is electronic funds transfer. I currently have my car insurance set up on automatic withdraw. You do not have to worry about your payment ever being late and I save on monthly payment fees. It is not for everyone though. If you make a lot of changes to your policy or do not have a cushion of money in your account, you could be setting yourself up for problems.

Fees associated with bouncing an automatic withdraw payment are steep. Especially since the fees not only come from your insurance carrier, but also the bank. Changes to your car insurance policy are often not reflected on your very next monthly payment. It can be confusing to many people and cause problems with how much money is expected to be withdrawn. On the flip side, insurance carriers are handing out discounts for choosing automatic payments. They have determined clients tend to stay longer when their payment is on auto drive.

Weigh all of your payment plan options. Discuss potential savings with your insurance agent. Who knew something as simple as how your car insurance payment is processed could affect your overall cost?