How to Get an Automatic Payments Discount on Car Insurance

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Written by Eric Schad Edited by Nick Versaw

Updated November 27th, 2023

Car insurance companies offer dozens of discounts to entice new customers and retain the ones they already have. But one discount, in particular, doesn’t have any special requirements. All it requires is a bank account, a debit card, or a credit card, and the willingness or ability to pay each month at a certain time. It’s known as an automatic payments discount.

By signing up for automatic payments, you can put extra money in your pocket each month while also ensuring that you always pay on time. If you want to reap the benefits of one of the most accessible car insurance discounts available to most drivers, read on to find out just what you need to know.

What is an Automatic Payments Discount for Car Insurance?

Also called autopay or an autopay discount, an automatic payments discount is a slight decrease in your car insurance premium for paying each month on a set date. The car insurance company automatically charges your card or debits your account on a due date you set after you provide your financial information.

You’re free to use whatever payment method you want to pay the amount due, including through your bank (either your checking account or savings account), debit card, or credit card. By choosing your own due date, you’re always assured that you have money in the bank so you never overdraft or go over your credit limit. Keep in mind that this discount only applies to customers who make monthly payments — those who pay in full won’t receive the discount.

Because a car insurance company can limit its administrative costs through automatic payments, they pass the savings on to you. Typically, an automatic payments discount isn’t as sizable as other discounts, such as a multi-car discount or bundling homeowners and auto insurance. But when you’re talking about extra money in your pocket, every little bit helps.

Advantages of Automatic Payments

Beyond a monthly discount, automatic payments also have several other advantages that make them even more attractive. When you enroll in autopay, you’ll also have the benefit of:

• No late fees: Since your bank account or credit card is automatically debited, you never accrue late fees if you forget to pay due to travel, an emergency, or just plain absent-mindedness.
• No hits to your credit score: Late fees aren’t the only lingering effect of missing an auto insurance payment. Late payments may also result in a hit to your credit score, although most insurers don’t report missed payments unless you’re more than 30 days behind. Interestingly, your credit score is one of the factors of your car insurance rates in the future, so it’s of the utmost importance to pay on time.
• Save time and hassle: Although paying a car insurance bill is relatively simple, thanks to websites and apps, it still takes you a few minutes each month to pay. Plus, it’s just a hassle and another thing on your plate. Automatic payments alleviate these problems, freeing up time and giving you a little extra peace of mind.
• Credit card rewards and credit score increase: Another benefit of autopay is that you can earn rewards points each month if you tie it to a credit card. Then, just pay the credit card balance each month, and you’ll also increase your credit score over time.

How to Qualify for an Automatic Payments Discount

As long as you don’t pay in full and choose a monthly bill on your car insurance, you almost always qualify for automatic payments discounts. All you need is a valid debit card, credit card, or bank account.

If you have one of these financial instruments, you can sign up for automatic bill payment by using your car insurer’s website or mobile app or by contacting them over the phone.

Automatic Payments Discount Savings by Car Insurance Company

The amount you save on an auto pay discount varies depending on who you choose as your car insurance provider. Here is a list of some top-rated insurers and how much their automatic payment discounts can save you money.

• Allstate: Known as the Easy Pay Plan, Allstate provides an automatic payments discount of up to 5% on certain policies/coverages.
• Farmers: Farmers calls its automatic payments discount the EFT (electronic funds transfer) discount. The amount of the discount varies depending on your location and policy.
• Liberty Mutual: The automatic payments discount from Liberty Mutual has varying amounts of savings depending on your policy. Just look for their Preferred Payment discount to enroll and select your favored payment option.
• American Family Insurance: American Family Insurance offers autopay discounts that have a range of savings depending on your policy and whether or not you include paperless billing.
• Direct Auto: You stand to save up to 5% when you sign up for Direct Auto’s Auto-Pay, just so long as you use either a checking account or a savings account.
• Nationwide: Nationwide offers a one-time automatic payments discount when you enroll in autopay.
• Progressive: Progressive provides all customers with an automatic payments discount. The amount varies depending on your policy.
• 21st Century Insurance: You can save a small percentage on your monthly car insurance bill through 21st Century Insurance’s autopay program.
• Amica: Amica offers a slight discount when you sign up for automatic payments, although — once again — the amount depends on your policy and geographic location.

Do You Save More With an Automatic Payments Discount or a Paid-in-Full Discount?

If you have a bit of extra cash burning a hole in your pocket, you might be looking for a useful way to spend it. That’s when you might consider a paid-in-full discount with your car insurer.

As the name implies, you pay for your entire car insurance premium upfront rather than in monthly installments. In return for getting their payment in full, a vast majority of insurers will give you a discount on your premium between 5% and 10%.

Comparatively, a paid-in-full discount typically offers more savings than an automatic payments discount if it provides more than a 5% discount. However, it comes at the cost of not having that extra money in your pocket.

If you want to save more money upfront, opt for the paid-in-full discount; if finances are tight, you’re saving up for something, or you just want some extra money in an emergency fund, stick to the automatic payments discount.

The Other Way to Get a Great Rate

You can firmly place an automatic payments discount in the nice-to-have pile, but things change. Perhaps you don’t want to have an automatic charge to your bank account, debit card, or credit card, or you’d rather make the payments yourself.

Fortunately, you have an alternative way to save money: gathering quotes to find the most affordable auto insurance. In about the same time it takes to enroll in an automatic payment program, you can input your information, select the type of insurance you want, and scour prices for the best rate from a company you trust.

It’s fast, it’s free, and it’s easy. That’s one trifecta you don’t hear too often — especially in the hunt for car insurance. Get started today:

Eric Schad Insurance Writer

Eric Schad has been an expert content writer for nearly a decade. Before getting behind the keyboard, he worked in the finance and music industries. With eight years of writing experience in the automotive and insurance industries, he enjoys communicating information that makes shopping for car insurance a breeze. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.