Cheapest Car Insurance With No Deposit [February 2024]

Car insurance companies require a deposit or initial payment to start coverage — they won't cover drivers without the first payment. Many insurers, however, offer payment discounts, flexible terms and affordable rates, allowing drivers to activate their coverage cheaply.

Car insurance companies may even lower your first payment, allowing you to start your policy immediately. However, expect your succeeding monthly payments to be higher. Be cautious of offers like "first month free car insurance" or "no down payment car insurance," which could be scams.

MoneyGeek found that GEICO, State Farm and Nationwide provide the most affordable options for those who want to keep monthly costs low.

State Farm and GEICO are likely your cheapest options, whether you choose to pay monthly or up front:

• State Farm: $524 per year and $44 per month
• GEICO: $527 per year and $44 per month

When you're looking for cheap car insurance, you may be able to save money by getting liability-only coverage. This kind of car insurance doesn't cover your car's damage, but it does cover any damage to other vehicles if you're in an at-fault accident.

The table below shows the national average annual and monthly rates for a liability-only policy.

Almost every state requires you to have at least liability insurance on your car. However, if you have a car loan or lease, the financing company will require you to carry full coverage car insurance.

For a very cheap policy with comprehensive and collision insurance, MoneyGeek found that GEICO and State Farm are likely your cheapest options:

• Nationwide: $1,044 per year and $87 per month
• Travelers: $1,107 per year and $92 per month

In most cases, the cheapest full coverage insurance is still more expensive than cheap liability-only insurance with the highest possible policy limits. However, it offers more coverage and better financial protection.

Full coverage insurance includes collision, which covers any damages to your car from a collision with another vehicle or an object like a tree or light pole. It also includes comprehensive coverage, which covers non-collision damage to your vehicle, such as theft, vandalism, fire, weather hazards, cracked windshields and hitting an animal while driving, like a deer.

Almost every state requires you to have at least liability insurance on your car. However, if you have a car loan or lease, the financing company will require you to carry full coverage car insurance.

On average, Nationwide is the cheapest company for most drivers based on MoneyGeek's analysis. You may have different results, however, as many factors affect how much you pay for auto insurance.

While "no-money-down' car insurance" suggests starting a policy without upfront payment, insurers typically require the first month's premium for coverage activation. This initial payment can be as low as $20. Insurance companies offer various payment plans to spread out costs:

• Annually: Pay the entire premium once a year
• Semi-annually: Split the payment into two installments per year
• Quarterly: Pay every three months
• Monthly: Make payments each month

Be cautious of "no-money-down" promotions as some payment is usually necessary for immediate coverage.

Insurers do not offer no down payment car insurance.

Credible car insurance companies require at least the first 30 days' coverage payment to activate a policy. A deposit or down payment is essentially equivalent to this initial coverage cost. It's not an additional fee you pay on top of your premium but goes toward the total cost of your policy.

Drivers who cannot afford to pay a lump sum and are in the market for cheap no down payment car insurance just need to sign up with one of the cheapest car insurance companies. To minimize the down payment, choose the cheapest insurance provider, ideally one with flexible payment options.

Some insurers may lower the initial deposit and distribute the remaining amount over the policy's term, offering a more affordable start. For even lower costs, consider shopping for the cheapest liability-only insurance, suitable for older cars not needing comprehensive coverage

What you pay for a car insurance policy will likely be different than the example above, and every insurer calculates rates uniquely. According to the Insurance Information Institute, many factors go into what a car insurance company charges you, including:

• Driving record
• Annual mileage
• Where you live
• Age
• Gender
• Make and model of your car
• Credit history

Because insurance companies use a variety of factors to calculate your unique rate, comparing car insurance quotes can help you get the best price — whether you're paying monthly or all at once.

Most car insurance companies offer flexible payment plans, which means you can pay monthly. Paying your insurance premium in installments will make your total cost higher, but monthly payments can help drivers on a tight budget. Shopping around will help you find the best rate, and drivers with good credit histories are more likely to be approved for a monthly payment plan option.

The companies below are known to offer monthly payments to those who qualify, but it's good to check with other companies to see if they provide similar payment plans.

A down payment — which is just the initial payment for the policy — acts as the policyholder's financial commitment, signaling their intention to maintain the coverage. It establishes a concrete agreement between the insurer and the insured.

It also serves to mitigate the insurer's risk. By receiving an upfront payment, the insurance company ensures that it does not extend coverage without securing payment first. This approach effectively reduces the risk of future non-payment, protecting the insurer's financial stability.

Getting car insurance for no money down isn't technically possible, but even though you will need to come up with some money to get your car insured, you can still do so quickly and inexpensively. You have options for getting car insurance right away, even if you have had trouble with your credit or past accidents or moving violations.

The important thing is to shop around, get several quotes and look for a monthly payment you can afford. Purchasing a minimum level of car insurance is mandatory in most states, but you'll be glad you took some time to find the cheapest car insurance.

Whether you're looking to make monthly payments or find the cheapest car insurance rates, learn more with frequently asked questions about no-money-down car insurance.