Paying your premium once a year will attract cheaper California car insurance rates than opting for monthly payments. You may be told monthly payments are less stressful but what you’re not told is how much more you pay for it.. There are transaction fees that are attached to processing a check. While a yearly payment calls for a single check and therefore a transaction for a year, monthly payments attrract twelve. This means that you will pay transaction charges twelve times. There are also administrative costs to your insurance provider that result just from taking monthly payments. For instance, it costs insurers millions of dollars annually to send out payment notices. These and more are then added to your rate thereby making it more than if you paid annually.