Want very cheap car insurance with no deposit? Also known as zero down auto insurance, instant car insurance with no deposit offers you the option to buy coverage by paying monthly premiums instead of making an upfront payment for 6 or 12 months. Fortunately, there are many good car insurance companies that don’t require a deposit or some type of down payment for coverage – these insurers calculate their rates based on a pay-as-you-go system.
With so many US drivers struggling to save money but needing to drive to work, getting new car insurance with little to no deposit or through monthly installments may be a family’s only way to buy a policy. However, it is important to note that no deposit auto insurance doesn’t mean you’ll get free insurance.
If you need cheap car insurance now and want to pay monthly installments, here we’ll discuss how no deposit insurance works, the pros and cons of low deposit for new cars, and how to find the lowest rates for coverage.
What is no deposit car insurance?
No deposit car insurance is coverage that requires only the first month’s premium to obtain insurance. These types of policies allow drivers to pay their rates in one of two ways – through annual, semi-annual, or quarterly payments or through a monthly payment plan.
While some brokers, agents or companies try to market cheap car insurance with no down payment as a way to get free insurance for a month without paying any money upfront, the truth is that you can only initiate coverage by paying for the first month. Beware of any companies or agents promising “first month free car insurance” or other false advertisements as there will certainly be some fine print.
Ultimately, the “no down payment” part simply implies your car insurance rates only cover the first month instead of requiring a large lump sum premium charge.
It’s also important to note that, although monthly premiums may be the best way to buy car insurance for you, auto insurance companies that don’t require a deposit actually end up charging you more in the long run. Drivers who can afford to pay more upfront will get a discount, resulting in a lower total cost. If you can pay for 3-months, 6-months, or 12-months in advance, ask your insurer how much cheaper your car insurance can be.
What is the cost of car insurance with no deposit?
Here is the cost of car insurance with no deposit. To compare premiums at GEICO, we included the price difference between a driver who pays for 6 months upfront and the cost of insurance with monthly payments.
|Lump Sum Payment|
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How much you would save with different insurance companies (e.g. State Farm, Allstate, Progressive, Farmers, Mercury, Liberty Mutual, Nationwide, etc.) depends on your driving history, age, gender, zip code, vehicle, the length of your policy, and other factors that affect rates. However, the average discount or savings is around 5% to 10% on a 12-month policy when premiums are paid upfront.
Car Insurance Companies That Don’t Require A Deposit
Most car insurance companies that don’t require a deposit don’t often advertise the monthly installment plan, even if they offer it. This is because insurers prefer to get paid up front with a down payment to cover some of the risk of insuring you and your vehicle. Ask your agent if you can pay monthly to see if the option exists, but you’ll have to qualify for the plan nevertheless.
New drivers or owners of new, expensive cars will have a difficult time finding no or low down payment insurance because of the increased risk to their carrier. Moreover, drivers with bad credit will be required to pay more of their premiums up front. On the other hand, drivers with old, cheap cars may qualify for zero down car insurance.
To get the best, cheap car insurance quotes for a low or no deposit policy, we recommend drivers compare rates from multiple companies. After all, the only way to know you are getting the lowest premiums is to complete an insurance comparison. Just enter your zip code to find a list of the best companies in your area and receive a free, instant quote online.
States Where You Can Get Car Insurance With No Deposit
Unfortunately, purchasing auto insurance with no money up front isn’t an option in every state. Here’s a list of states where you can buy car insurance with no deposit.
- New York
For cheap car insurance today, compare quotes, companies, policies, and terms to find the lowest premiums and best coverage for your situation.