Cheapest Car Insurance With No Deposit [February 2024]

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Updated: May 20, 2024

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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.

Key Takeaways

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No insurer offers a no-money-down policy — they typically require policyholders to pay for at least the first month to activate the policy.

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The first month's payment is typically the same as each additional monthly premium.

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Paying for car insurance monthly can help you spread out costs, but it's usually cheaper to pay in full.

Why Trust MoneyGeek? To discover the very cheapest no deposit car insurance, we gathered car insurance quotes from Quadrant Information Services and state insurance departments to discover the cheapest car insurance rates from providers that offer monthly payment plans.

83,056Quotes Analyzed
46Companies Compared
473 ZIP Codes

Cheapest No Deposit Liability-Only Car Insurance

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.

State FarmAnnual Premium$524Monthly Premium$44
GEICOAnnual Premium$527Monthly Premium$44
NationwideAnnual Premium$538Monthly Premium$45
ProgressiveAnnual Premium$542Monthly Premium$45
TravelersAnnual Premium$544Monthly Premium$45
FarmersAnnual Premium$667Monthly Premium$56
AllstateAnnual Premium$756Monthly Premium$63

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.

Cheapest No Deposit 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.

NationwideAnnual Premium$1,044Monthly Premium$87
TravelersAnnual Premium$1,107Monthly Premium$92
GEICOAnnual Premium$1,154Monthly Premium$96
State FarmAnnual Premium$1,187Monthly Premium$99
ProgressiveAnnual Premium$1,273Monthly Premium$106
AllstateAnnual Premium$1,395Monthly Premium$116
FarmersAnnual Premium$1,427Monthly Premium$119

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.

Compare Auto Insurance Rates

Ensure you're getting the best rate for your auto insurance. Compare quotes from the top insurance companies.

What Is No Money Down or No Deposit Car 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.

How No-Money-Down or No Deposit Car Insurance Works

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

Payment Structuure
Total Policy Cost

Low Down Payment

If you chose a low down payment plan and the total cost of your policy was $720, you would only need to pay $60 upfront to get insured, and you'd make the same payment each month for a full year.

Standard Policy Paid in Full

If you can pay in full, the same $720 no-deposit policy may only cost $684 per year with the annual payment discount. You would make one initial payment of $684 with no following monthly payments, and you'd save $36.

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.

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There's no such thing as a no-money-down car insurance policy, and car insurance providers don't require a deposit to get a policy. You simply need to make your first monthly payment to become insured.

While choosing a monthly payment plan will cost more in the long run, it's the cheapest upfront cost. Car insurance rates are determined by your unique profile and MoneyGeek has the resources to help you find the cheapest rate for you.

Explore the options below to find the cheapest car insurance based on your profile and needs:

One of the fastest ways to compare rates based on your profile and price range is our car insurance calculator. Our calculator allows you to enter your anonymous but basic information to get a quick view of how rates may stack up for you.

Compare Auto Insurance Rates

Ensure you're getting the best rate for your auto insurance. Compare quotes from the top insurance companies.

Companies Offering No Deposit Car Insurance

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.

State Farm
  • Bundle all of your policies into one bill
  • Select your payment due date
  • Monthly payments available
  • Safe driver discounts
  • Easy to initiate claims
  • Convenient mobile app
  • Pay in two, three, four, five or six installments
  • Online quotes with graphs and charts
  • Customer service is available 24/7
  • Military discounts
  • Monthly payments available
  • Bundle with your property insurance
  • Multi-Policy discounts

Why Insurers Ask for a Down Payment

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.

How to Lower Car Insurance Down Payment

Having a strong credit history, driving a cheap car and shopping around help get you the lowest possible down payment. Drivers with stellar driver profiles can find a policy with a 20-dollar down payment.

Shop around for the best rates

Comparing rates from multiple insurers is key to finding the lowest down payment options. Different companies offer varying rates based on their assessment of risk, so shopping around can lead to significant savings.

MoneyGeek estimates you can save up to 47% when you shop around. We recommend getting at least three car insurance quotes from different companies to make a fair comparison. Also, consider which company’s customers have had fewer complaints. The last thing you need when you’re in a car accident is subpar customer service. You can also shop for car insurance by company reviews with MoneyGeek.

Opt for higher deductibles

Increasing your deductibles — the amount you pay out of pocket in a claim before your insurance kicks in — can significantly lower your down payment and overall premium costs.

Raising your collision and comprehensive deductibles from $200 to $500 could save you 15–30%, and increasing each deductible to $1,000 could save as much as 40%. Just make sure you put aside enough money to cover the deductible in case you need it if your car is damaged.

Improve your credit history

You need to work on this over time, but making payments on time, managing your credit wisely and keeping balances as low as possible can help you save money on car insurance. Insurers see those with good credit as a lesser risk than those with poor credit histories.

Bundle policies

Purchasing multiple insurance policies from the same provider, such as auto and home insurance, can often lead to discounts on down payments and overall premiums.

Choose a vehicle that's cheap to insure

Driving a car that's less expensive to insure can reduce your down payment. Cars that are cheaper to repair or have better safety ratings typically have lower insurance costs.

High-performance sports cars and luxury cars are more expensive to insure. SUVs are usually less expensive. Also, take note of safety features. Options like adaptive cruise control and lane detection assist can lower insurance costs.

Drive safely and maintain a clean record

A clean driving record with no accidents or violations can qualify you for lower insurance rates. Insurers reward safe drivers with lower premiums and down payments.

Seek out discounts

Many insurance companies offer a variety of car insurance discounts, such as for being a student, a safe driver or for installing anti-theft devices. For example, if you buy a home and auto bundle from the same insurer, you can save up to 25%, depending on the company.

Always inquire about available discounts to reduce your down payment.

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.

FAQ About No Deposit 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.

Can you get car insurance with no deposit?
Who actually has the cheapest car insurance?
How do I get insurance with no money down?
Can I pay half my car insurance?

About Gail Kellner

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Gail Kellner is a freelance writer specializing in personal finance and insurance. She grew up outside of Hartford, Connecticut, the insurance capital of the world. She has written for Bankrate, Bravo Policy, Retireable and many other publications.