Anyone looking to save money on car insurance will need to keep their eyes open for the best discounts, different coverage types, and even car makes/models to ensure that they are getting the best possible deal on auto insurance. It is possible to scour local insurers and the Internet for the best discount, but the real deal might actually be found in a little secret that auto insurers hide from policyholders without a keen eye: there is often a hidden fee being assessed each time policyholders pay their auto insurance premiums.

Here’s what happens: Many insurers actually charge customers to make each and every payment. Some charge $7 or more per payment! Think about it this way: if a customer was presented with monthly, quarterly, semi-annually, and annual payment options, they could save $56 a year by opting for quarterly payments, $70 by opting to pay their auto insurance premium twice annually, and $77 if an entire year’s payments were made up front. These savings are above and beyond almost any other form of savings, and can be quite substantial. After all, who would refuse the additional savings of up to $77 per year above and beyond their best possible deal?

Some insurers also offer discounts above and beyond this per-transaction fee discount to people willing to pay their auto insurance premiums in advance. The reasoning behind this additional discount is fairly simple: it reduces the overall risk of not being paid. Simply put, insurers need to pay their own bills on time and have to rely on policyholders sending in timely premiums. A certain percent of premiums arrive late or do not arrive at all, and that necessitates an accounts receivable department as well as the loss that the insurer takes if they pass an account on to collections. All of this risk can be mitigated by accepting larger payments that cover greater blocks of time, and that allows the insurer to feel more comfortable offering a lower rate. After all, a consumer with money in the bank is likely to prove far more responsible than a consumer that is barely making ends meet and living paycheck to paycheck.

Consumers that do find it difficult to get enough money together for a quarterly or even semi-annual payment should try to find creative ways to use funds. For example, a tax return could go towards paying bills that could be paid with paychecks at the same price, or it could go towards getting a substantial discount on auto insurance premiums.