Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Apr 14, 2022

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In a nutshell...

  • Companies may offer a discounted price overall for making one bulk annual payment rather than monthly installments
  • Many car repair companies take credit cards, which may be a great help if you are faced with very costly car repairs
  • Depending on each particular insurance company, you may be able to pay in a certain number of installments other than one or six

Credit cards are acceptable forms of payment for many car insurance companies, although you need to check with each particular carrier to review their specific policies for using credit cards.

There is indeed no law against using credit cards to pay for your car insurance, but there is no law that says all companies must accept them, either.

Certain auto insurance companies may offer discounts or ways to, save money off your insurance bill if you pay with a credit card.

However, you want to be sure paying your insurance with your credit card doesn’t end up costing you more in the long run.

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What are possible benefits of paying my car insurance with a credit card?

Using a credit card to pay your car insurance may enable you to pay for an entire year’s worth of premiums at one time. This is where discounts from the car insurance company may kick in.

If you do opt to pay monthly, you may be able to set up an automatic transaction that charges your card each month without you having to do anything, which can help ensure you don’t end up with late payments.

Rather than receiving paper bills in the mail, your company may offer electronic copies sent via email that you could pay with a few clicks of the mouse and your credit card number.

If you are especially savvy with credit card balances, you can also look into balance transfer cards to move a large balance due, such as an annual car insurance premium, to a card that charges no interest for a set amount of time.

This can result in savings in the form of no interest payments if you pay off the balance due within the set amount of time.

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What are the possible drawbacks of paying my car insurance with a credit card?

High-interest rates and other fees associated with using a credit card may be a strike against using your credit card to pay for car insurance.

The insurance company may also charge a fee related to credit card transactions to cover the extra cost of processing credit cards payments.

Credit cards themselves may also come with a host of fees such as fees for:

  • Transferring a balance on balance transfer cards
  • Setting up or activating a new account
  • Going over your credit limit or obtaining a higher credit limit

If you happen to miss a credit card payment, although the credit card company may cover your car insurance, you may also accrue late or lost payment fees.

What other payment options do I have for car insurance?

In addition to credit card payments, many car insurance companies also accept debit card payments, personal checks, money orders and cash.

The overall cost of your car insurance may vary based on the type of payment you use, with companies sometimes willing to give you a discount if you pay in a method that is least costly and trouble for them.

Credit card payments may be accepted electronically, as may bank transfers or electronic checks.

Some insurance companies may also accept payments over the phone and by mobile text while many still receive the standard payment sent in the mail.

What other auto-related things can I pay by credit card?

Specific vehicle repair and tire companies even issue their credit cards, which may be easier to obtain than a standard credit card.

Such cards, however, may come with a high-interest rate, although they may come with a grace period during which you have a set amount of time to pay off the debt in full before any interest rates are charged.

Company cards are usually only allowed to be used for products or services obtained from that particular company.

AZ DOT accepts credit card payments for online vehicle registration renewals, provided you do not need an emissions test to renew.

If you own a vehicle, you certainly need a credit card to help with any unexpected expenses, and it certainly makes life easier paying all the bills associated with vehicle ownership.

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