Car Insurance Payment Date: Optimising Deadlines, Payment Methods and Legal Aspects
11 May 2025
10
Minutes
Katrin Straub
CEO at nextsure
The debiting of car insurance often raises questions: When exactly is the premium due and what is the best method of payment? This article provides you with clear answers and practical tips, so you always stay informed and ensure your insurance coverage.
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The topic in brief and concise terms
The car insurance premium is usually deducted a few days to two weeks after the start of the insurance or on the contractually agreed due date (often the beginning of the year).
Annual payment is usually the most cost-effective option and can save up to nine percent compared to monthly payment.
Non-payment of the premium can lead to contract termination, loss of insurance coverage, and immobilisation of the vehicle after reminders.
Precisely determine the debit dates for car insurance
The exact timing of when your car insurance is debited depends on several factors. Typically, the first debit occurs a few days to two weeks after the official start of the insurance. For contracts starting on the first of January, you often receive the bill as early as December of the previous year.
The main due date is usually the first day of the insurance year. If this day is a holiday or weekend, the debit is deferred to the next working day. For vehicles registered during the year, the first payment is calculated proportionally and due shortly after registration. The regular debit of subsequent payments is then based on the agreed payment method, often at the beginning of the calendar year for annual payments. Please note that the debit date for car insurance may differ from the car tax due date.
Optimise payment terms and avoid cost traps
Various payment methods are available for your car insurance. The most common method is the SEPA direct debit, which is preferred by most insurers. Alternatively, payment by invoice and bank transfer may sometimes be possible, although this can involve additional fees.
The frequency of payment significantly impacts the total costs. The following options are common:
Annual payment: This is almost always the most cost-effective option. Insurers often offer a discount of up to nine percent here.
Semi-annual payment: This often incurs a surcharge of around four percent.
Quarterly payment: Expect surcharges of around eight percent.
Monthly payment: This option is the most expensive, with surcharges averaging nine point five percent, at peak even up to twenty-five percent.
Our expert tip: Carefully check how high the surcharge for non-annual payments is in your contract. Switching to annual payments can often save several dozen euros per year. Many policyholders choose installment payments to spread the financial burden, but annual payment is usually the most economical decision. More information on the costs of car insurance can be found in our blog. Choosing the right payment method is an important step in cost optimisation.
Understand the consequences of late payment for car insurance and take the right action
If the car insurance premium is not paid on time, it can have serious consequences. Initially, you will receive a payment reminder or directly a first notice. This sets a deadline of usually fourteen days to settle the outstanding amount, plus reminder fees.
If the payment is still not made, the insurer may send a second reminder. At this stage, the insurance coverage is often reduced to the statutory minimum coverage. If this deadline is also missed, the insurer may terminate the contract. This leads to the loss of insurance coverage. Since car liability insurance is legally required in Germany, the insurer informs the Federal Motor Transport Authority about the termination. Subsequently, the registration office can decommission the vehicle, which means the number plates are unstamped and the vehicle may no longer be moved or parked in public spaces. All associated costs are borne by the policyholder. If you encounter payment issues, you should immediately contact your insurer to discuss possible solutions such as installment payments. Understanding the General Terms and Conditions for Car Insurance is very helpful in this context. Knowing these processes is crucial to avoiding serious consequences.
Mastering the Legal Foundations and Expert Tips on Contribution Payments
The payment of the insurance premium is regulated in the Insurance Contract Act (VVG). According to Paragraph 33 VVG, the initial premium is due immediately after a period of fourteen days following the receipt of the insurance policy. If the initial premium is not paid, the insurer can withdraw from the contract (Paragraph 37 VVG), and there is no insurance coverage.
The Compulsory Insurance Act (PflVG) stipulates in Paragraph 1 that every motor vehicle must have liability insurance. Driving without valid insurance cover is a criminal offence and can be punished with a prison sentence of up to one year or a fine according to Paragraph 6 PflVG.
Our expert tips for a smooth process:
Ensure account balance: Always make sure there is a sufficient balance in your account at the time of debit to avoid return debit fees and reminder costs.
Check payment method: Consider whether an annual payment method is financially viable for you to benefit from discounts.
Note due dates: Make a note of the due dates, especially if you are paying by invoice.
Seek communication: In case of payment difficulties, contact the insurer immediately to find solutions such as deferral or payment in instalments before the insurance cover is endangered.
Careful planning and knowledge of deadlines, when the car insurance is debited, are essential. At nextsure, we are happy to help you find the suitable and cost-effective insurance coverage for your needs. We offer you transparent information and digital solutions for your insurance matters. Also, find out about the possibility of transferring discounts on car insurance. With this information, you are well-equipped to manage your insurance contributions optimally.
Request an individual risk analysis now: Have your insurance situation checked free of charge and receive specific optimisation suggestions.
More useful links
Under Gesetze im Internet you will find the full text of the Insurance Contract Act (VVG 2008), which governs the legal foundations for insurance contracts in Germany.
The Verbraucherzentrale provides comprehensive information about the compulsory car insurance for all vehicle owners and offers important consumer tips.
The Gesamtverband der Deutschen Versicherungswirtschaft (GDV) offers detailed statistics and information on motor vehicle liability insurance for cars.
The ADAC provides guides and information about the special termination right for car insurance.
The Verbraucherinformationssystem Bayern (VIS Bayern) offers general information on insurance contracts and premiums.
FAQ
When exactly will my car insurance payment be debited?
The exact debit date depends on your contract and the chosen payment method. For annual payments starting on the first of January, the debit usually occurs at the beginning of January. For contracts concluded mid-year, the initial contribution is due shortly after approval. You can find the exact date in your insurance certificate or premium invoice.
Can I change the payment method of my car insurance?
Yes, you can usually change the payment method of your car insurance, often for the next insurance year. Contact your insurer for this. Bear in mind that switching from annual to more frequent payments is usually associated with higher costs.
What are the advantages of paying by SEPA direct debit?
SEPA direct debit payment is convenient because contributions are automatically debited, so you don't have to manually monitor payment deadlines. Many insurers prefer this method and offer it as standard.
What are the legal consequences if I drive without car insurance?
Driving without valid motor vehicle liability insurance is a criminal offense under Section 6 of the Compulsory Insurance Act and may be punishable by fines or imprisonment for up to one year. Additionally, your vehicle may be deregistered.
My car insurance has been cancelled due to non-payment – what now?
You must immediately take out a new motor liability insurance policy, as driving without insurance coverage is prohibited. Your previous insurer may refuse a new contract. Although other providers are obliged to offer you at least liability insurance, surcharges may apply.
Will I receive a notification before the car insurance is deducted?
As a rule, you will receive an invoice before the main due date (e.g. for annual payments) indicating the amount and due date. For direct debit payments, there is usually no separate notice for each individual debit, but the rhythm is contractually agreed.
