How you choose to pay for your car insurance is up to you. You can choose to manually pay the bill or automate it. But did you know that you can get a discount if you set your policy up for automatic payment? Insurance companies will reward you with a discount if you set your policy up to pay your monthly rate automatically.
Insurers likely give out a discount for you choosing to pay automatically because it poses less of a risk to them. When you manually pay your rates, there’s a chance you might forget and miss a payment. Setting up auto payments helps you avoid any lapses in your policy. This also means that insurers know they’ll have your money each month. Those who pay their insurance in full generally can’t qualify for this discount. But they can get a pay-in-full discount for doing so.
This article will take a more in-depth look at automatic payment discounts. It’ll tell you about how the discount works. You’ll also learn about which types of payments are generally acceptable to qualify. Finally, we’ll list some major insurers that make this discount available to their customers.
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How Automatic Payment Discounts Work
Most states require that you have insurance to drive a car. The trouble is that it can cost a lot. Especially if you’re young or new to driving. The good news is that there are ways you can lower your rates. Insurers offer plenty of discounts that you might be eligible for.
Discounts lower your rates by a certain percentage. The amount will depend on the discount and your insurer. Applying multiple discounts to your policy can save you big money on your auto insurance.
Some of these car insurance discounts aren’t in your control, but some are. The automatic payment discount is one that you can easily get. All you have to do is set your policy up so that you automatically pay for it each month. Then, your insurer should be able to give you a discount.
Insurers also offer a discount for those that opt to pay in full for their policy. But you can’t get the automatic payment discount when you pay in full. Keep this in mind when you’re deciding to set up your payment plan.
If you want to do so, you should ask your agent about setting up an automatic payment system when you’re buying your policy. Otherwise, you should be able to change it later to get the discount. Many insurers offer some sort of reward for doing so. Also, note that this discount isn’t available in California.
Which Payment Types Insurers Accept
While many insurers offer some sort of automatic payment discount, they don’t always accept every form of payment. The most common accepted forms of payment are:
- Credit cards. Most insurers will accept credit card payments. Only use your credit card for automatic payments if you’re comfortable paying it back later. Otherwise, you’ll rack up debt with unforgiving interest rates.
- Debit cards. Debit cards are another common form of payment. These cards take money straight out of your bank account as soon as the payment finishes processing.
- Electronic funds transfer (EFT). An EFT is a transfer of funds from your bank account to someone else’s. In this case, you’d be sending money straight to your insurer. Like with a debit card, the money comes straight from your bank account as the payment processes.
Before you set your car insurance policy up for auto-payment, you should check with your insurer to see what types of payment they accept. Many will accept all three. But it’d be a smart idea to talk to your agent and ask about their accepted payment methods.
Who Offers an Automatic Payment Discount
Many insurance companies offer automatic payment discounts. This includes several top insurers that you’re likely familiar with. Here’s a list of major insurers that offer an auto-payment discount:
These aren’t the only insurers who provide an automatic payment discount, but they are the ones who publicly list the discount on their website. None of the insurers above tell customers up front how much money they can expect to save. However, getting a car insurance quote can help you find out. The exact amount of savings will depend on your insurer and the state that you live in.
Frequently Asked Questions
Q: How much can you save with an automatic payment discount?
A: The amount of money that you can save will depend on a couple of things. First, it depends on your insurer. They’ll get to decide how much you end up saving on the discount. It’ll also depend on your state’s rules. California doesn’t even allow this discount. Be sure to ask your agent about how much you can expect to save when you set auto-pay up for your policy.
Q: Do insurance companies accept electronic fund transfers as a form of payment?
A: You should be able to use an EFT to pay for your car insurance. Though, that’ll depend on your insurer’s rules regarding payment methods. To be sure, check with your insurer’s rules. Most insurers should accept this as a form of payment. If you can’t use an EFT, credit and debit cards are almost always acceptable forms of payment.
Q: Are automatic payments a good idea?
A: Setting up automatic payments may seem like a good idea. Especially if there’s a discount in play when you do so. But you should also consider that this means that your money will be gone as soon as you reach a certain day on the calendar. Only set up auto-pay if you think you can make these payments each month without worry.
Besides the discount, auto payments can also help you avoid forgetting to pay each month. This can help improve your credit score. It can also improve your insurance rates over time. Many insurers will reward you for being a loyal customer that pays on time. These positives might make it worth it to set up auto-pay.