Cheap Car Insurance With No Down Payment or Deposit

Find the cheapest car insurance options that don't require a down payment or deposit. We help you with strategies to minimize upfront payments and ways to get cheaper rates.
Get very cheap car insurance with no down payment below.

Written by Mark Fitzpatrick

Updated: January 30, 2026

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What Is No Down Payment or Deposit Car Insurance?

“No deposit” or “no-down-payment” car insurance can be misleading and misunderstood, but here is what it really means. You can get very cheap car insurance with no down payment or deposit, but you will need to pay your first month's coverage to start the policy.

All reputable car insurance companies require an upfront payment, but the good news is that this is not a deposit and it pays for your first month's car insurance coverage. This is different from older traditional payment structures where some companies required 20 to 30 percent or more of your annual premium upfront.

If you are looking for the cheapest car insurance with limited upfront payments, here is how we help:

The Cheapest Car Insurance Companies With No Deposit

GEICO has the cheapest car insurance with no deposit, but they do require the first month's car insurance be paid to start the policy. Travelers, State Farm, and Progressive are also very cheap options with monthly payment plans. Getting the cheapest car insurance policy will minimize your upfront and long term costs. Monthly rates for no deposit car insurance are as low as $43 on average for minimum coverage and $98 for full coverage, but your rate will vary depending on your profile.

Company	Best For	Cheapest Minimum Coverage	Cheapest Full Coverage	Standout Feature
GEICO	Most affordable minimum coverage	$43	$98	User-friendly mobile app with payment management
Travelers	Cheapest full coverage	$50	$98	Many customization options
State Farm	Best overall service and coverage	$52	$124	Superior claims satisfaction ratings
Nationwide	Best for pay-per-mile options	$96	$179	SmartRide and SmartMiles programs
Progressive	Best for high-risk drivers	$68	$216	Name Your Price tool

Why No Down Payment Car Insurance Costs Vary

The rates in the table above are based on a standard profile. Your actual first-month cost of no deposit car insurance depends on these factors:

Credit score. Drivers with poor credit pay 50 to 200 percent more than those with good credit. This is one of the biggest factors affecting your upfront payment.
State and location. Each state sets minimum coverage requirements. Some require higher liability limits that increase costs. Urban city areas with more accidents cost more than rural areas.
Driving record. At-fault accidents and traffic violations increase your rates. A clean driving record qualifies you for lower upfront payments.
Age and vehicle. Younger drivers pay more. Expensive vehicles and sports cars cost more to insure than older, less expensive and safer vehicles.

How to Get Cheaper No Deposit Car Insurance

Here are strategies to help you get get very cheap car insurance with no deposit or down payment. You will lower you first month's payment by choosing a car insurance policy that is less expensive.

1
Compare Rates from Multiple Insurers to Get the Cheapest Rate
Comparing car insurance quotes is most effective way to get cheaper car insurance and reduce your monthly payments. Insurance rates vary widely between companies, and getting quotes from at least three insurers can reduce your cost by up to 50% and minimize upfront costs.
2
Consider Lower Coverage Levels and Higher Deductible
State minimum liability coverage will get you the very cheapest legal car insurance rate. Minimum liability rates start as low as $50 per month. Remember that the very cheapest coverage amounts won't cover you as well in the case of an at-fault accident.

Full coverage is more expensive, starting around $100 per month. It covers you for damage to your car. It requires a deductible that you pay before your car insurance kicks in. You can get cheaper rates by choosing a higher deductible, saving you 10-15%.
3
Get Easy Discounts
Several discounts are simple to qualify for and can reduce your premium by 2% to 25% without cutting coverage. Look for paperless billing, automatic payments, good student discounts, and safe driver discounts. Ask your insurer directly about all available discounts, as many aren't always advertised online.
4
Improve Your Credit Score
In most states, insurance companies use credit-based scores to set your car insurance rate. Better credit qualifies you for cheaper rates and better payment options.
5
Lower Your Annual Mileage
If you drive under 7,500 miles per year, you will get lower rates. Drivers with under 7,500 miles annually save an average of $223 annually compared to those driving 15,000 miles. If your actual mileage is lower than what you reported, updating your insurer can reduce your down payment immediately.
6
File Claims Carefully
Avoid filing claims for minor damage. Instead, pay small repair costs out-of-pocket to prevent rate increases. Insurance companies penalize claims for up to three years, so paying $500 in repairs now is often cheaper than higher future car insurance rates.

How to Lower and Delay Initial Car Insurance Payments

When you're short on cash, a $100 down payment can feel impossible. Here are ways that will delay your upfront payment and lower your first payment:

Choose a monthly payment plan: Insurers let you pay monthly, semi-annually, or annually. Monthly requires the least upfront but you will pay $3-$7 monthly in processing fees that cover the insurer's costs to verify your information and process your payment. Annual payments eliminate these fees and save you 2 to 5 percent overall, but you need more payment upfront.
Use a credit card to delay upfront cash needs: If you don't have the funds to pay for the first month's payment, you can pay with a credit card to get coverage immediately. This delays the actual payment up to 30 days when your credit card payment is due. This keeps money in your account longer when you need it. All major insurers like GEICO, Progressive, and State Farm accept credit cards.

Payment Frequency	Pros	Cons	Best For
Monthly	Lowest upfront cost and easier budgeting	Usually includes processing fees ($3-8 monthly)	Tight budgets, first-time buyers
Semi-Annual	No processing fees with a moderate upfront cost	Requires larger initial payment	Drivers wanting to balance cost and convenience
Annual	Cheapest overall cost and no processing fees	Highest upfront payment	Drivers with available cash wanting maximum savings

Why Car Insurance Requires a First Month's Payment

Your first month's payment protects the insurance company and covers the cost to set up your policy. Without upfront payment, insurers have no guarantee you'll actually pay or that your payment method works before they start covering your vehicle.

The upfront payment also confirms your payment method is valid, it covers the administrative costs of activating your policy, and it ensures you're committed to the coverage. If you never pay after getting coverage, the insurer has taken on all the risk with no money coming in.

Consider Pay-Per-Mile Car Insurance For No Deposit

If you drive fewer than 10,000 miles annually, pay-per-mile insurance can get your cheaper rates and lower your initial monthly payment. You pay a base monthly rate plus a per-mile charge (around 2 to 10 cents per mile), so your bill adjusts based on how much you actually drive. Low-mileage drivers can save 20 to 40% compared to standard policies.

These policies have limits. Some cap daily charges at 250 miles and don't offer the same discounts as traditional insurance. You'll only qualify in certain states and need a vehicle made after 1996 or a compatible smartphone.

How to Spot Misleading No Down Payment Insurance

Any company claiming to offer no upfront payment car insurance is probably exaggerating or running a scam. A common scam is requiring a deposit in exchange for car insurance quote. Legitimate companies provide free quotes with no upfront payment needed to get a quote.

Watch for red flags like cash-only payments, advertising on social media, no phone support, and difficulty reaching the company directly. Some insurers use confusing language like "buy now, pay later," "first-month-free," or "instant coverage" to make their payment plans sound better than they are.

You can make sure a company is legit by checking the NAIC database at naic.org to confirm the company is licensed in your state.

Cheap No-Down-Payment Car Insurance: FAQ

We answered the frequently asked questions about getting cheap no down payment and no deposit car insurance to help you understand how it works:

How do the OCHO no down payment car insurance work?

OCHO finances your down payment at 0% APR as an interest-free loan you repay monthly over your policy term, plus an $80 broker fee. You get instant coverage with no cash upfront and flexible payment dates tied to your paycheck, but you're only available in 8 states and still paying the full premium spread out over time.

How does Hugo no down payment car insurance work?

Hugo has flexible payment options for drivers who need short-term or occasional coverage. You pay for only the days you drive, starting with as little as three days of coverage, with no down payment or upfront fees. You can choose to pay weekly, biweekly, or monthly.

The issue is that Hugo only offers state-minimum liability coverage, not full coverage that protects your vehicle. This means your car isn't covered if you cause an accident. Hugo also only operates in 13 states, so you'll need to check if it's available where you live. And rates are high, averaging around $121 monthly for basic coverage.

What happens if I miss a payment on my monthly insurance plan?

Most insurers offer a grace period of 10 to 30 days after your payment due date before canceling coverage. After that grace period ends, your policy may be canceled, leaving you uninsured. Set up automatic payments or payment reminders to avoid this situation.

Can I switch payment plans mid-policy?

Yes. Most insurance companies allow you to change your payment plan mid-policy. Contact your provider or use their online portal to adjust from monthly to semi-annual or vice versa. Some companies offer discounts for switching to lump-sum payments.

Will using a credit card for my insurance payment affect my credit score?

Using a credit card for insurance won't impact your credit score unless you carry a balance. This approach gives you an extra 30 days before paying out of pocket. Pay the card balance in full by the due date to avoid interest charges. Most major insurers accept credit cards without fees.

Should I consider pay-as-you-go or pay-per-mile insurance to minimize upfront payments?

Pay-per-mile insurance charges a base rate plus per-mile fees, making it attractive if you drive rarely. It's risky for someone needing immediate, reliable coverage. If your policy lapses for seven or more days, the DMV gets notified, leading to registration suspension and higher future rates. If you forget to activate coverage and get in an accident, you won't be covered. For someone tight on cash needing insurance now, traditional monthly payment plans offer more stability and fewer gaps in coverage.

No-Down-Payment Car Insurance: Our Review Methodology

We analyzed over 2 million quotes from 607 insurance companies across 3,500+ ZIP codes to find the cheapest no-deposit car insurance options. We tested rates for different ages, locations, credit scores, and driving histories to compare both minimum coverage and full coverage policies. Our focus was on first-month payments and upfront costs rather than annual premiums to help you find the lowest rates with minimal upfront payment.

Learn more about MoneyGeek's auto insurance methodology.