What is a Pay-On-Time Discount?

An on-time payment discount may reduce car insurance rates by $11.90/mo for drivers who pay their premiums on time. Compare the four companies that offer on-time payment discounts below.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 21, 2021

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Here's what you need to know...

  • Making on-time payments could lead to getting an insurance policy discount
  • Paying by the due date also reduces the chances of suffering a lapse in coverage
  • Review auto insurance quotes to figure out if there are any additional discounts available to you

Purchasing the best auto insurance serves the best interests of a driver. So does saving money.

When given a choice between buying a great auto insurance policy, one that provides an outstanding level of coverage, and a cheap one with restrictions and exclusions, buying a better policy makes more sense.

Drivers looking to save money may be thrilled to learn that both saving funds and getting a tremendous policy are both possible. Taking advantage of available discounts helps with cutting down costs.

One of the easiest price reductions to take advantage of falls under the category of an on-time payment discount.

Compare car insurance quotes today by entering your ZIP code into our free rate comparison tool above.

What is an on-time payment discount?


An on-time payment discount pretty much is what the name states. Customers who pay their premiums on time and not after the due date and during the grace period find their policy discounted.

The amount of the discount varies from one insurance company to the next, which is why reviewing several quotes must be a priority.

Discounts and other cost-saving measures prove very helpful when trying to save money on a solid policy. Finding a discount of more than 10 percent could happen.

Saving money on a policy allows for adding more coverage including uninsured/underinsured motorist protection at a lesser expense.

Accessing on-time payment discounts requires being diligent and making payments on the date the company sets. If the due date is the third of every month, paying before or on the third for a set amount of time opens up the possibility to access the discount.

One provider may require paying on time for a year while another could require more. Again, check the rules regarding how you can access specific discounts made available by a provider.

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Enter your ZIP code below to view companies that have cheap car insurance rates.

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Other Reasons Why On-Time Payments Help

Paying on time does more than just save you a few dollars. On-time payments could save your policy. Not paying a policy by the due date could lead to a policy being canceled.

If the insurance provider offers no grace period, a policy could be outright canceled the minute payment is missed. Even with a grace period, problems could arise.

A grace period reflects an extension of the due date before a policy suffers from cancellation. A grace period could anything the insurance provider chooses to establish. Ten days or 30 days or no grace period could be offered.

Always double-check with the insurance provider to determine the exact length of a grace period to avoid a lapse in coverage. And do not abuse the grace period.

Constantly paying during the grace period as opposed to paying on the due date does more than eliminating you from consideration for an on-time payment discount.

An insurance provider could very well raise your rates or even choose not to renew the policy due to constant late payments. Late payers create extra, costly work for insurance companies.

Time and effort are required to send out late notices. Constant late payments may lead the insurance company to assume you aren’t a customer worth keeping.

How to Pay on the Due Date


Sending a check or money order out in the mail three or more days ahead of the due date is acceptable, but there are better ways. Mail can get lost in transit, which creates problems.

Setting up automatic payments online or on the phone ensures the account is paid without any extra effort on your part.

Deductions can come from a checking/savings account, a debit card, or a credit card. Just take the added step to look at the account on the due date to make sure the payment went through. Don’t assume anything. Be thorough.

Accessing an On-Time Payment Discount

Insurance companies offer discounts to attract reliable customers, make rates competitive, and to lower their own costs and risks. On-time payments discount reward and, hopefully, retain responsible customers. Right now, there are four providers offering this particular discount:

Compared to other types of available discounts, on-time payments premium reductions don’t seem too popular in the industry. A full-payment discount seems to be more accessible since payment in full would be preferred by insurance providers.

Not everyone, however, is able to pay cash or charge full payment. Those unable to access an on-time or full-payment discount should look at other available discounts such.

Defensive driver, employment, green vehicle, anti-theft, and anti-lock brakes are some of the many discounts out there.

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How can you find great deals and discounts?


The number of insurance providers that present this particular discount could change.

Changes in insurance company discounts and coverage options reveal why customers should review four or more quotes every six months to see what new deals, discounts, and coverage options they can get. Stacking several different discounts is possible.

With the best protections in place at the best price, you may be able to drive with greater confidence.

Compare car insurance quotes right here to find out which company offers you the best rate for the car insurance you need.


  1. https://www.investopedia.com/articles/pf/08/beginner-guide-auto-insurance.asp
  2. https://www.insuranceopedia.com/definition/476/insurance-quote
  3. https://www.nolo.com/legal-encyclopedia/when-make-underinsured-uninsured-driver-insurance-claim.html
  4. https://www.lexisnexis.com/legalnewsroom/lexis-hub/b/commentary/archive/2009/07/26/premium-payment-for-cancelled-insurance-policy-does-not-create-reinstatement-for-time-period-prior-to-receipt-of-the-payment.aspx
  5. https://www.moneyunder30.com/ways-to-lower-your-auto-insurance-premium

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