How to Buy Car Insurance With a Checking Account

Most car insurance companies offer automated clearing house (ACH) payments through your checking account but typically have several other payment options also available. Credit and debit cards, cash, checks, money orders, and payment apps like PayPal and Venmo are all common forms of payment — but specific options and availability vary by insurer and state.

We’ll cover which payment methods are available, how they work, what to consider, and how to set up automatic payments to ensure you never have to worry about a late payment.

How to Buy Car Insurance Without a Credit Card

Though buying car insurance with a credit card is typically easier, it’s not the only payment method available. Most auto insurance companies offer several payment options.

For example, State Farm accepts the following forms of payment:

• Credit card

• Debit card

• Bank account

• Paper check

• Cashier’s check

• Money order

• Cash

It’s a good idea to familiarize yourself with your insurer’s payment options before you purchase a new car insurance policy to ensure you’ll be able to make your payments on time. Most companies offer several multiple forms of payment, but each insurer’s methods and fees vary.

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Common Car Insurance Payment Methods

You typically have several options to make payments on your auto insurance policy, and you can usually avoid installment fees by paying your insurance bill in full instead of monthly.

Here’s how each payment method works.

Checking account

Paying with a checking account is common, and most insurers offer this payment method because it’s fast and secure. When you sign up for an auto policy or pay your monthly car insurance bill, you’ll need to provide your routing and checking account numbers to your insurance company so they can pull your premium directly from your account.

When you choose an electronic funds transfer (EFT) or automated clearing house (ACH) payment, it usually posts to your account in one or two business days.

Credit card

Another common way to pay your bill or start your car insurance policy is to use a credit card with the Discover, Visa, American Express, or Mastercard logo. Many insurers offer credit card payments, but some may limit them to certain card issuers. For example, American Family doesn’t accept Discover cards, and Progressive doesn’t accept American Express.

Debit card

Most banks provide a free debit card when you sign up for a checking account. Debit cards work like credit cards but deduct funds from your checking account, just like an EFT or ACH payment. It’s a good option if you don’t want to give out your bank account numbers but don’t have or don’t want to pay with a credit card. Most auto insurers will accept debit cards if they also accept credit cards.

Services like Apple Pay, PayPal, and Venmo

Alternative payment options like Apple Pay, PayPal, and Venmo may be an easy way to pay for some goods and services. Still, they’re rarely an option to pay for insurance premiums. Progressive is the only insurer that accepts PayPal as a form of payment, based on our research. GEICO, State Farm, and USAA will accept Apple Pay if you pay your insurance bill through the insurer’s mobile app.

If you prefer to pay with Venmo, the Venmo Credit Card may be your best option. Insurers that accept Visa credit cards should also accept the Venmo credit card.

Prepaid cards

Unlike a debit card (which is linked directly to your bank account) or credit card (which uses a line of credit), a prepaid credit card is like a gift card — you add funds to the card and can use the money to make purchases. These cards typically have reloading or monthly fees.

You can use them in most places that accept the merchant logo (usually Mastercard or Visa), including most insurance companies. But your insurer may decline a payment if there isn’t enough money on the card to pay your insurance bill.

In-person cash payments

Some companies will accept cash payments if you have a local office that accepts it. Allstate, Mercury, State Farm, and Direct Auto are examples of insurers that accept in-person cash payments.

It’s a good idea to check with your local insurance agent first to ensure they accept in-person cash payments. And make sure to also get a receipt to confirm your payment date and amount.

Money orders

Though less common than other payment methods, some insurers also accept money orders. If the company accepts checks, money orders are also usually acceptable forms of payment, too. Just make sure to put your policy number and contact information on the money order, especially if you’re not sending it in with your paper bill.

If you plan to mail a money order, leave ample time before your due date. Most companies use the day after the postmark date as the payment date.

Cashier’s checks

A cashier’s check — also known as an official check — pays with funds from the financial institution issuing the check rather than a person. When issuing a cashier’s check, the bank immediately takes the money out of your account.

Since they’re less likely to bounce than personal checks, lenders typically accept cashier’s checks for large down payments on vehicles, mortgages, and other loan types.

Many insurance companies accept checks, though they may not list all check types as acceptable payment methods. So, before having your bank issue a cashier’s check, verify if your insurer will accept it first.

Pros and Cons to Using a Checking Account to Pay for Car Insurance

Paying for car insurance with your checking account may be the best option for some, but it’s not without drawbacks. Consider the following pros and cons of this payment method.

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Insurance Companies that Accept Checking Account Payments

Most major insurers accept checking account payments, whether they’re paper checks, cashier’s checks, or ACH payments. GEICO, Progressive, American Family, Allstate, and USAA are a few examples of companies that take checking account payments.

Still, not all car insurance companies accept payments directly from your bank account. For instance, Lemonade, Hugo, and Metromile only take credit, prepaid, or debit card payments in most states. But if your debit card is attached to your checking account, it works similarly to using your routing and account numbers or a check to make the payment.

How to Set Up Automatic Car Insurance Payments From a Checking Account

You can avoid a trip to the post office and save on stamps if you set up automatic payments instead of manually paying your insurance bill each month. It can also prevent coverage lapses and may help you avoid installment fees. After all, many insurers also offer an auto-pay discount.

Though the setup process can vary by insurer, here are general steps to set up automatic electronic check payments:

1. Log into your online account, mobile app, or contact your insurance company.

2. Navigate to the payment methods page.

3. Provide your personal information, like your bank name, routing and account numbers.

4. Verify your payment date. Depending on your billing cycle and payment plan options, some insurers may allow you to change the date.

5. Read and accept the terms and conditions.

6. Provide any necessary documentation, like a voided check or bank statement, to confirm your account information.

7. Check your email for a confirmation of the automatic payment setup.

FAQs About Car Insurance Payment Methods

Sources:

1. National Association of Insurance Commissioners, “2023 Property and Casualty Market Share,” accessed September 10, 2024.

2. Citizens Bank, “What is a debit card, and how is it different from a credit card?,” accessed September 10, 2024.

3. Capital One, “What is a prepaid card and how does it work?,” accessed September 10, 2024.

4. Chase, “What is a cashier’s check?,” accessed September 10, 2024.