How to Get Cheap Car Insurance With No Deposit or No Down Payment

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When money is tight, the last thing you want is a big car insurance bill. Car insurance companies usually let consumers pay either all at once or in monthly installments. You can choose the monthly plan, get insured right away and then pay month-to-month. If you can pay in a lump sum, you’ll save some money, but not everyone can afford a huge payment all at once.

Key Takeaways

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No-money-down policies refer to monthly payments for car insurance instead of a lump-sum premium.

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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.

What Is No Money Down or No Deposit Car Insurance?

No-money-down car insurance refers to a policy that allows you to pay monthly. To get car insurance without having to pay any money upfront isn’t possible. You will have to pay at least the first month’s installment on your policy, but then you will be fully insured. Insurance companies typically allow consumers to make payments:

  • Annually
  • Semi-annually
  • Quarterly
  • Monthly

If you need and can’t afford a huge lump sum, paying a monthly premium will get you insured right after making your first payment. “No-money-down” advertisements can be misleading because consumers are led to believe they can get car insurance without any payment at all; however, car insurance providers require the first month’s payment to activate the policy.

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

Typically, insurance companies offer better deals to those who can afford to pay for the entire policy in one payment. As you can see in the following example, a driver can pay the policy's total cost, $746, in one lump sum, or a driver can make monthly payments of $130 a month for six months. Making monthly payments increases the cost a little bit, in this case, by $31.

Payment Plan for a Standard Policy vs. No Money Down

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  • Payment Amount
    No Money Down
    Standard Policy
  • First Month's Payment
    $130
    $746
  • Future Monthly Payments
    $647
    $0
  • Total
    $777
    $746
  • Savings
    $0
    $31

What you pay in for a six-month car insurance policy might be very different than the example above. What do insurance companies look at when determining your rates? According to the Insurance Information Institute, many factors go into what a car insurance company charges you, including:

  • Driving record
  • Mileage
  • Where you live
  • Age
  • Gender
  • What kind of car you drive
  • Your credit score

Because insurance companies use a variety of information 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.

The Cheapest Car Insurance With No Deposit or No Money Down

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.

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

Average Premiums for Liability-Only Coverage

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Full coverage insurance is more expensive, but it covers a lot more. Full coverage insurance includes collision, which covers any damages to your car. It also includes comprehensive, which covers both damages to other vehicles and damage to your vehicle sustained by natural causes, such as hitting a deer or damage due to a hailstorm.

On average, Geico 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.

Average Premiums for Comprehensive and Collision Coverage

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Which Companies Offer No Down Payment Car Insurance?

A lot of 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 scores 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
GEICO
  • Pay in two, three, four, five or six installments
  • Online quotes with graphs and charts
  • Customer service is available 24/7
  • Military discounts
Progressive
  • Monthly payments available
  • Bundle with your property insurance
  • “Name your price” tools let you name a price, and then Progressive will show you coverage options

Five Steps You Can Take to Get Cheaper Coverage With a Payment Plan

Everyone wants to save money on car insurance, especially if you’re opting for a monthly payment plan. Consumers on a budget usually want monthly payment plans because they’re quick and require less money upfront, but there are other ways you can save some cash and find cheap car insurance.

1

Shop around

MoneyGeek estimates you can save up to 47% when you shop around. Get at least three car insurance quotes from three different companies. 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.

2

Go for a higher deductible

Increasing your deductible from $200 to $500 could save you 15–30%, and increasing your 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.

3

Bundle

If you buy your home and auto insurance from the same insurer, you can save up to 15%, depending on the company. Don’t assume this is true, however. It still pays to shop around.

4

Improve your credit score

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 reasonable risk.

5

Check out insurance costs before you buy a car

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.

If you're looking to get car insurance for no money down, you're looking to get coverage quickly and inexpensively. Even though you will need to come up with some money to get your car insured, you can still do so rapidly and affordably. You have options for getting car insurance right away, even if you have had trouble with your credit or past accidents. The important thing is to shop around, get several quotes and look for a monthly payment you can afford. Insurance is not an option in most states, but you'll be glad you took some time to find the cheapest car insurance.

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FAQs 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.

Methodology

MoneyGeek compared quotes from major U.S. insurance companies to find the cheapest companies. These were the specifics of our search:

  • 40-year-old male driver with a clean driving record
  • Liability-only insurance with the coverage level 50/100/50
  • $500 deductible for both comprehensive and collision

A 50/100/50 policy means $50,000 for bodily injury per person, $100,000 for bodily injury per accident and $50,000 for property damage. Read more about pricing methodology.

About the Author


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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.


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