Credit Card Car Insurance Discounts [2024]

Can you pay car insurance with a credit card? By using your credit card, you can often save money on your car insurance. Many car insurance companies partner with credit card companies to offer discounts. Knowing how to take advantage of credit card car insurance discounts can help your budget, so read on to learn how it’s done.

What are credit card car insurance discounts?

There are several types of credit card insurance discounts commonly available. These include automatic payments, advance payments, cash back or rewards, as well as extras and perks. Finding out what you qualify for starts with understanding the different types.

Automatic Payments

With many car insurance policies, you can get a discount for setting up automatic payments. Sometimes this is called auto pay. Insurers prefer this payment method over mailing a check or paying online every month because it reduces the chances of a missed or late payment. 

When you use a credit card for automatic payments instead of setting up withdrawals from a checking account, you won’t have to worry about potential overdraft fees or returned payments. While most credit cards have limits, they’re usually more than you would need to pay for routine expenses like car insurance. 

Although some credit cards approve transactions that exceed your credit limit and then charge you a fee, most decline the purchase and let you know that the automatic payment wasn’t successful. That way, you can avoid fees from your credit card company and use another payment method until you can reduce your credit card balance and make sure it’s well below your limit.

Advance Payments

If you have plenty of credit, you can make an advance payment instead of setting up automatic payments. Rather than paying monthly, you can pay yearly or every six months when your policy renews. Many car insurance companies also offer credit card discounts for these types of payments as another way to keep people from missing payments or paying late.

When you use your credit card, you can get this discount even if you don’t have the funds to make a large payment. You can simply pay off your credit card balance over time. With automatic or advance payments, you won’t need to remember to pay a monthly bill. If you need to postpone a payment or change payment methods, you can adjust your car insurance payment options online or over the phone.

Cash Back or Rewards Programs

Many credit cards offer a cash back or rewards program. The credit card company reimburses you for between 1% and 5% of purchases. Some credit card issuers offer cash back in rotating categories, and others offer a smaller amount with every purchase. 

Other organizations allow you to use rewards points towards discounts on purchases or miles for free travel instead of cash. Getting a low percentage back on your purchases or receiving a small discount may seem insignificant, but cash back and rewards can add up over time, especially if you use your credit card often.

What other extras and perks are offered through credit cards?

Credit cards can also offer a variety of benefits to help you save money. You could get the following and more:

• Free roadside assistance
• Rental car insurance
• Discounts on travel expenses, like hotel rooms and airline tickets

Credit cards usually provide secondary insurance as opposed to primary insurance coverage, meaning it doesn’t apply unless your primary insurance or insurance from the rental car company won’t cover all your expenses.

Paying your car insurance with your credit card can help you earn more of these perks. Using your credit card regularly and making payments on time can also help improve your credit score. Many car insurance companies offer even lower rates to people with good credit.

Case Studies: Credit Card Car Insurance Discounts

Case Study 1: The Automatic Payment Saver

Emily recently switched her car insurance provider and opted to set up automatic payments with her credit card. By doing so, she not only enjoyed the convenience of hassle-free payments but also received a credit card car insurance discount. This discount allowed her to lower her monthly premium, saving her money over the course of the policy term.

Case Study 2: The Advance Payer

Mike decided to make an advance payment for his car insurance by paying the premium for the entire year upfront with his credit card. As a result, he not only qualified for a credit card car insurance discount but also avoided the hassle of monthly payments. This upfront payment saved him both time and money, and he enjoyed the peace of mind of having his insurance coverage secured for the entire year.

Case Study 3: The Rewards Maximizer

Sarah uses a credit card that offers cash back rewards on purchases. She decided to pay for her car insurance with this credit card to take advantage of the rewards program. Over time, Sarah accumulated a significant amount of cash back, which she could redeem or apply towards her car insurance payments. This strategy allowed her to enjoy the benefits of credit card rewards while effectively managing her car insurance expenses.

Final Thoughts About Credit Card Insurance Discounts

So yes, it’s a good idea to pay for car insurance with credit cards and get discounts at the same time. When possible, pay your entire credit card balance every month to avoid interest charges. Most credit cards with car insurance have a one-month grace period before charging any interest.

When you pay your balance within a month, there’s no charge for using your card, and saving money with credit card car insurance discounts is easy. You can also reduce your insurance rates by comparing policies and providers carefully.