Cheapest Car Insurance With No Deposit (October 2024)

State Farm and GEICO are the cheapest liability-only car insurance options that don't require a deposit. However, you will pay for your first month when the policy starts.

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

When you're looking for the cheapest car insurance policy, 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 cheapest national average rates for a liability-only policy.

MoneyGeek found that Nationwide and Travelers have the cheapest full-coverage policies, on average. 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.

• 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. However, it offers more coverage and better financial protection. Full coverage insurance includes collision — which covers any damages to your car from an accident — and comprehensive protection — which covers damage to your vehicle caused by theft, vandalism, fire and weather.

Most car insurance companies offer flexible payment plans, which means you can pay monthly. MoneyGeek spoke our the three cheapest no-deposit car insurance providers and learned the following:

• All required some form of initial payment, but this payment was applied to paying for a portion of the policy rather than being held as a deposit.
• The providers offering the cheapest rates offered flexible initial payment options and required partial policy payments as low as $20 to start the policy depending on your state.

The three providers below offer the cheapest rates with no deposit for multiple coverage options. They are all rated among the best for customer service, affordability and a variety of discounts and product options.

Credible car insurance companies require payment to activate a policy, usually the first month of coverage. Here's how it works:

1. Choose your policy type and coverage. You'll need to choose liability-only or full coverage, as well as whatever liability limits and deductible you want. Even if you opt for liability-only, you'll still need at least state minimum limits for your policy.
2. Make the first month's payment to activate your policy. This first payment is not an additional fee you pay on top of your premium but goes toward the total cost of your policy.

No-deposit car insurance means that you are only responsible for paying for the first month of your car insurance policy, but you are not required to give a separate deposit. 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.

The first month's payment 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 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.

Whether you want to make monthly payments less expensive or find the cheapest car insurance rates, learn more with frequently asked questions and answers about no-deposit car insurance.