Use a Credit Card for Cheaper Car Insurance

A smart way to save money is to use a credit card for cheaper car insurance. How to use a credit card for cheaper auto insurance starts by timing your credit card billing date perfectly with your annual insurance premium payment. You could have up to 60 days to pay your premiums without any additional interest charges! Learn more in our guide below and use our free comparison tool to find cheap car insurance quotes.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 25, 2020

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Many drivers search for cheap car insurance rates and one of the best ways to save money on auto insurance is by purchasing a policy with a credit card.

Almost all credit card companies have a grace period and if you happen to catch the right billing date you may have up to 60 days to pay your policy premiums in full without incurring any interest or financing charges. Then there is the added bonus of miles or a cash back reward.

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Smart use of a credit card can be very beneficial to your finances and taking advantage of paying car insurance with a credit card can save you upwards of 5% or more on policy premiums if you do it right. Some of the ways to save money on car insurance with a credit card are:

Automatic Payments

Car insurance policies are often sold with multiple payment options. You can take advantage of a pay-in-full option or make installment payments periodically (such as monthly or quarterly). These payments can usually be made by credit card to most car insurance companies and many car insurers offer small discounts for simply setting up automatic payments in advance. Bigger discounts are available should you pay your policy in full at the time of issuance.

Why do car insurance companies offer an incentive to set up automatic payments with a credit card or checking account?

Car insurance companies spend millions of dollars on accounts receivables chasing down consumers, mailing out invoices and dealing with the billing of car insurance premiums the old fashion paper trial way. With automatic payments scheduled in advance the car insurance company realizes a much more efficient and highly probable way they will get the next payment on time so it’s a win–win for everyone.

Cash Back Option

Credit card companies offer many loyalty programs but one which can directly save you money on auto insurance is a cash back card. While some drivers may opt for air miles paying auto insurance premiums with any kind of reward card surely has many benefits over simply writing a check.

Additional Coverage / Partner Discounts

Do you know some credit cards offer emergency roadside assistance, rental car insurance and even affinity group discounts? Its worth calling your credit card company and inquire about what benefit they have for auto insurance. You may be surprised about some discounts they may offer through partner promotions.

The only downfall with using any type of credit for car insurance premiums is making sure you pay your bill on time before and finance charges start to accumulate. While in theory using a credit card can often save money many consumers still pay only the minimum payment and if this is the case then the cost of your auto insurance will actually be much higher if you use a credit card for premium payments.

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