No Money Down Car Insurance

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No Money Down Car Insurance

Auto insurance is an unavoidable expense if you drive. It’s mandatory by law. It can also be costly for many people. Most don’t have enough money saved to pay for the entire policy upfront. For some, even paying for a down payment can be challenging. The good news is some carriers offer no money down auto insurance policies. It can help those low on savings get legally insured without any money out of pocket. It’s important to note that not all companies offer this type of deal. It is not provided by every insurer and is only available in select states.

What Exactly is No Down Payment Auto Insurance?

Some people falsely presume they can get insured without paying any money upfront. They falsely believe they can get free car insurance for a certain period. This is not the case. Zero down car insurance means you are not required to pay for the 6 month or 12-month premium upfront. However, you are still required to pay for the first installment payment. So, for example, if your policy costs a total of $1,200 for a year of coverage and it’s broken into 12 equal payments, you will need to pay $100. While you will not have to make a large deposit of $200 or $300, you will still need to make the first payment.

How often do you Pay for Car Insurance

Insurers Normally Require Down Payments

A customer who is trying to get free car insurance raises concerns for companies. It might suggest that the person just wants to get insured for a short time and then cancel the policy. For example, they might borrow a car, or test drives a vehicle for a week, or just don’t have the funds to buy a policy. This is why most insurers require a deposit or down payment before a policy is activated.

These types of customers are also more likely to file a claim, commit fraud, and switch insurers more often. In general, it’s often not profitable for providers to offer no deposit auto insurance plans. Insurers want financially stable customers who renew their policy for years.

What is an Auto Insurance Down Payment?

Most people mistakenly think a down payment is an additional fee that is added to the policy premium. This is not the case. A down payment is taken from the premium’s overall cost, whether it’s six months or twelve months. To illustrate this, let’s say a 12-month policy costs $1,500, and the insurer is requiring a $300 down payment. The customer would then pay $300 upfront and 12 equal payments of $100.

With no deposit car insurance, there is no down payment requirement. The customer only needs to make the first money payment. A zero-down policy can mean the difference between getting insured or not for those on a tight budget. Remember, never drive a vehicle uninsured. It is against the law and could cost you thousands if you get into an at-fault accident. Always drive with the legal amount of coverage.

Cost of a No-Down-Payment-Policy

The amount you pay for auto insurance is based on numerous factors. Not every person will qualify for a nothing down auto insurance policy. The premiums for this type of policy will also vary from one insurer to another. Rate factors include:

  • Drivers Gender and Age
  • Years of Driving Experience
  • Driving Record
  • Type of Vehicle
  • Homeowner or Renter
  • Credit History
  • Zip Code Where the Vehicle is Parked

The least risk you pose, the greater chance you have of qualifying for a zero down auto insurance policy. On the other hand, if you have bad credit, at-fault accidents, and are currently uninsured, you probably won’t be able to get a no-down car insurance policy.

Companies that Offer No Down Payment Auto Insurance

Not every insurer offers no down payment car insurance, but there are several that do. This includes:

  • Safe Auto
  • Progressive
  • State Farm
  • Kemper
  • Allstate

States that Offer No Down Payment Auto Insurance Policies

Also, it’s important to note that not every state allows no down payment auto insurance policies. States that do allow it are:

  • New York
  • Florida
  • Arizona
  • Oklahoma
  • Georgia
  • California
  • Washington

Paying for Car Insurance

Most auto insurance premiums are paid in monthly installments or in an annual payment. Many people who are buying coverage for the first time ask, how can I buy no money down car insurance? The answer depends on several critical factors, including the insurer and where you live. Let’s dig a little deeper and explore several options that will help you get the lowest down payment car insurance possible.

If you can afford it, pay for the entire premium upfront instead of opting for no money down car insurance. It will save you 2%, or even more, off your premium. It will also, of course, be one less monthly bill you have to worry about. On the other hand, you might want to break up the premium cost into monthly payments. It is a significant benefit for those on a tight budget, who otherwise could not afford to get insured.

Almost All Insurers Offer Yearly Payments

Most car insurance companies give their customers the option to pay auto insurance no money up front. You might ask, why do they do this? Insurers make a large portion of their income by investing the premiums. So, the more money they can get upfront from each policyholder, the more they have to invest. It often results in a higher ROI, or return on investment, for the insurer in good investment market conditions. For some carriers, it can be the difference between being profitable and not.

Because of this and other reasons, nearly all auto insurance firms offer discounts for paying your policy in full and upfront. It is one of the significant benefits to the consumer. Discounts vary by insurer but can often be 2% or 3% and sometimes more. If you have adequate savings, then it makes sense to pay for your automobile insurance costs upfront.

If you can save more by paying the entire premium in one lump sum, why doesn’t everyone do it? The obvious answer is many people just don’t have enough savings to make a full yearly payment. An annual auto insurance policy can often cost $800 for liability only coverage to over $3,000 for comprehensive coverage on a newer vehicle.

Many consumers just don’t have that amount of cash lying around. Also, the option of buying a no money down car insurance policy is not available to everyone. Some people won’t qualify, and many carriers require a down payment.

Most people pay their premiums in small monthly installments, even if they have the funds to pay the premium in full. Check the cheapest online rates by entering your zip code. Get matched with multiple insurers’ best rates and take advantage of online discounts that can save you more.

Cheap Liability Only Policies

If you want the cheapest car insurance with no deposit, you will be looking at state minimum liability-only coverage. If you have a good driving record and a cheap used car, it might be possible to get a year of coverage for $400 or less. To save the most money, pay your entire premium upfront. While you might not have $1,500 saved up for a high limit collision of comprehensive insurance, you should be able to afford a one-time payment of $400 or $500.

Monthly Auto Insurance Installment Plans

If you can’t afford to pay all of your policy upfronts, don’t worry. Nearly all insurers offer easy monthly installment plans. You should be aware that most no down payment car insurance companies will add on extra fees, in addition to charging interest. You should carefully review all the wording in your insurance policy, including all the fees and interest you will be paying.

This is important because some companies that offer instant car insurance with no deposit might have a lower yearly coverage rate but charge more in interest and fees. This can be deceptive and cause serious confusion.

You can figure out your total annual cost of auto insurance by adding up all the monthly payments. Some carriers might charge a small fee for the option of paying monthly but not charge interest. This is why it is essential to shop around and review 10 or more quotes before deciding on one particular insurer.

Getting a Low Deposit Auto Insurance Policies

If you are tight on cash, you should try and get covered with a low down payment plan with monthly installments. There are a few requirements for getting auto insurance with $20 down or even no deposit coverage. You will need:

  • A Good Driving Record
  • Be Over the Age of 25
  • Have Good Credit
  • A Good History of Continuous Coverage

If you meet these requirements, you can get car insurance with no deposit. If you have bad credit or have often canceled your policies in the past, you will be required to pay a deposit of 20% or more of the yearly premium. This is why it’s so essential to maintain a good driving record and keep your credit score above 650.


Buying car insurance is something that almost everyone that drives has to do. For those with adequate savings, it makes sense to pay the entire premium upfront. There are monthly installments available for people who cannot afford to pay for their entire policy in one payment, but check the fees and interest you will be paying.

Finding no money down car insurance plan starts with comparing multiple quotes from regional and national providers. If you have excellent credit and more than ten years of continuous coverage, insurers will bend over backward to earn your business. They will often offer incentives, including no deposit car insurance policies, to get your business. Compare low-cost auto insurance near you. Enter your zip code and lower your auto insurance costs today.