Get an Auto Pay Car Insurance Discount

Here’s how it works when you set up auto payment for your auto insurance. Insurers want to know that you’ll pay your bills on time. That means they don’t have to worry too much about whether or not you’ll pay — and if you don’t pay, companies won’t be able to cover all their expenses, including those required to insure other drivers, homeowners, etc.

When you set up an automatic payment for when your premium is due, you’re giving that insurer peace of mind that you’ll pay on time every month, quarter, or year. Usually, the way this works is that you’ll set up a direct deposit from your checking account, or you might use a credit or debit card. Sometimes, credit card payments have additional fees, however, since credit card issuers often charge higher rates to merchants who accept these cards.

This kind of insurance discount isn’t just for the tech-savvy crowd. If you’re someone who struggles to remember due dates or just wants to avoid late fees, auto pay can be a lifesaver. Plus, for drivers who are trying to get back on the road after having their license revoked or suspended, every dollar saved counts toward rebuilding your finances and driving record.

It’s not difficult to get going with this discount. Assuming your insurance company offers it, all you’ll likely need to do is use their web portal or call a customer service rep to get started. Here are the exact steps you’ll usually need to take to get going:

1. Connect Your Account or Card: Some insurers might accept credit and debit cards, so the first step is to either connect your checking account (including your routing and account number) or your card.
2. Have Enough Money in Your Account: Obviously, none of this will work if you don’t have enough money in your account. Make sure you don’t have bounced payments.
3. Choose the Right Payment Method: Some insurers might offer a higher discount for using specific payment methods, like direct bank withdrawals over credit card payments. It’s worth checking which option saves you the most.
4. Stick With It: The longer you stay enrolled in auto pay, the more you save. Some companies might increase your discount over time to reward your loyalty.

This is a pretty rare situation. You might not qualify for an auto pay discount if your policy type isn’t eligible, you’ve had missed payments, or your premium is too low. Some insurers only accept specific payment methods for auto pay, like direct bank withdrawals.

If you’re a new high-risk customer, you may need to wait before you can get the discount, and certain state regulations might limit availability. To be sure, it’s a good idea to check with your insurer to find out if you meet the criteria.

It’s hard to say for sure exactly how much you can stand to save with this discount. It all depends on the insurer in question. However, most drivers can expect to save somewhere in the range of 5% off their total premium. It’s not a ton of money, but it adds up over time.

Think about it this way. If your annual premium sits around $1,200, 5% of that is $60. Not too bad — basically, you’re saving an extra $5 per month for doing nothing more than automating your payment. And you need to pay anyway to stay street-legal, so everyone wins — you, your insurer, and the state.

Besides discounts, there are other ways to save money on your car insurance. For example, you can increase your deductible. This means in the event you do need to file a claim, you will pay more for your deductible and the insurance company will pay less for the claim.

Minimum liability does not have a deductible but if you have collision coverage or comprehensive insurance, you’ll need to pick a deductible.

Another way to save on auto coverage is to drive a reliable car with high safety ratings and easy-to-find-parts. Insurers like these cars because they have safety features that can help drivers avoid collisions, plus if there is an approved claim, repairs are reasonable and parts are available. Vehicles such as these typically do not need specialized (and more expensive) mechanics as well.

Finally, bundle. For those who need more than one policy, see what kind of deal you can get by bundling, for example, your renters insurance with your car insurance. In some cases, you may get up to 15% off.