Anamarie Waite, Car Insurance Writer
You can pay for car insurance with a credit card, but it might cost extra. All of the top 10 auto insurance companies accept credit card payments, as well as bank transfers, paper checks, and money orders. But insurers will charge a credit card processing or convenience fee, typically a percentage of the payment amount between 1.5% and 4%.
Major Car Insurance Companies That Accept Credit Card Payments:
- American Family
- Liberty Mutual
- State Farm
Paying for insurance with a credit card means taking an additional risk. If you don’t pay the full balance each month, interest charges can add up quickly. Plus, paying bills like your mortgage or car insurance with credit cards can negatively impact your credit score due to high credit utilization—how much of your total credit limit you’re using.
If you’re financially responsible and use credit cards effectively, paying with credit can be a smart move. For example, people with good credit and a great rewards card can rack up a lot of extra rewards by paying for car insurance with their credit card.
Most insurance companies also offer a paid-in-full discount. If the potential savings from paying the whole year upfront are worthwhile, but you can’t swing the payment upfront, a credit card could be a cost-effective solution. It also helps to get your payment out of the way, so you don’t have to worry about sending checks on time, late fees, or lapses in coverage, either.
If paying by credit card is the difference between making and missing a payment, it’s definitely better to buy now and pay over time to stay insured. There is no standard grace period when it comes car insurance payments. If you don’t pay the bill on time, you could be without insurance, and it’s illegal to drive. There can be lapsed coverage penalties, too.
Finally, if you need to pay your car insurance deductible with a credit card, you should be able to. Most insurance companies simply write a check—either to you or your mechanic—for the total cost of repairs minus your deductible. If you need to pay your deductible directly to your insurance company before they will write a check, they can process that payment on a credit card just as they would for a premium. Otherwise, the mechanic fixing your car will need to accept plastic for you to cover the cost of your deductible with a credit card.
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