For those on a budget, every penny counts. One expense almost everyone has is auto insurance. With coverage costs going up, it’s good to know what companies have the lowest deposit car insurance. Some insurers offer plans with deposits starting at $20. That’s an amount just about anyone can afford.
Purchasing auto insurance with a low down payment is the best way to ensure you can legally drive your vehicle without spending a ton of money upfront. Driving covered is essential because all states require that you have auto insurance to drive on any road legally. So, how can you find a low-down payment policy? Here’s a quick look at everything you need to know.
Compare Plenty of Quotes
Getting quotes from multiple reputable automobile insurance companies is the best way to find the price that suits your needs. Fortunately, no insurer should charge you just for giving you a quote. If you do come across an insurance company that wants you to pay a deposit or any other type of fee to receive a quote, continue your search elsewhere. It is a significant indicator that you should not trust the company.
Remember that getting a quote for a car insurance loan is very different from other services that often give quotes. For example, it is entirely acceptable for a construction company to charge you for a new project quote because it requires more effort on their part. If you want to buy now pay later car insurance, you do not have to do nearly as much. To get started, enter your zip code and start comparing direct rates in about five minutes.
The Cheapest Car Insurance Requires a Deposit
You’ll have to make some payment upfront for your vehicle coverage to be legal and go into effect. This rule applies in all 50 states, so there’s no getting around it. Although this may not be referred to as a “deposit,” it serves a similar purpose by bringing you the coverage you need to get your vehicle legally on the road.
How much you will have to pay to get your policy started often varies. In some cases, it may be a tiny amount intended to activate your plan. In rare cases, you may be asked to pay the entire premium upfront. Your premium will allow coverage for 6 or 12 months, depending on the details of your policy. It’s worth noting that most insurance companies will give you a slight discount for paying your premium in full to get the policy started. Of course, this isn’t always an option, especially if you are on a tight budget. Almost all insurers will divide the premium into convenient monthly payments if you cannot afford to pay the entire amount at once.
Will Your First Payment Be More than the Rest?
As mentioned above, car insurance carriers will divide your premium into monthly payments, whether you choose a six or twelve-month policy. This leads to an important question. Will all your payments are equal, or will you be expected to pay more for the first month’s installment? It depends on the insurance company.
Most companies do indeed charge slightly more for your first payment than your subsequent payments. However, each situation is different, so you’ll have to get several quotes to find out. Some insurers have incentives to bring in new customers, such as $20 down payment auto insurance plans.
How Will My First Month’s Payment Be Decided?
Let’s check how much various factors, including the following, will determine your auto insurance premium:
- Your driving history
- Your age, gender, marital status, and profession
- What for will you be using the vehicle – You’ll need to state whether you will use it for pleasure or business, such as operating as a Lyft or Uber driver.
- Your credit score
- Where you live
- The value and age of the vehicle being insured
- The vehicle’s safety ratings
If your credit score is a little low, your driving history is marked by tickets or at-fault accidents, your down payment and premium will be more. This also goes for new drivers with little experience behind the wheel. Drivers will be charged more for coverage and have higher deposit requirements. All this also applies to brand-new vehicles, particularly sports cars. On the other hand, if your driving record is clean, your credit score is high, and your vehicle is a few years older and known for its high safety ratings, you can expect your premium to be much more affordable.
After the insurance company has determined your premium amount, they will be able to break it down into monthly payments. Depending on the state you live in and your policy’s details, your first month’s payment is estimated to be around 20-33% of the 6-month premium total.
Providers That Have the Lowest Deposit Car Insurance
Several auto insurers have aggressive incentives to bring in new customers. One way of doing this is by making the deposit very cheap and postponing the first month’s payment. Progressive and Geico are two nationally recognized companies with the deposit starting at just $20 down. Even if you are required to pay a larger deposit, based on your credit and other factors, the chances are that these two companies will still have some of the lowest deposit car insurance requirements compared to other competitors. Enter your zip code and compare low-cost auto insurance quotes online in minutes.
What if I Can’t Afford My Car Insurance?
Unfortunately, car insurance isn’t an option. To legally operate and drive a vehicle, it must at least have the bare minimum insurance on it. This minimum insurance is usually liability coverage, which protects the other driver if you cause an accident. The rules regarding the lowest liability minimum coverage do vary from one state to another. You’ll have to check with your insurance company to ensure you follow the rules. Fortunately, your state may not require that you have comprehensive collision insurance coverage, which should drastically decrease your insurance costs. This way, you will also make it more affordable.
Suppose you are struggling to afford a car insurance deposit and the first-month premium. In that case, your best options are to select a policy that includes only the minimum liability coverage and opt to only make the first month’s payment instead of paying the premium in full upfront.
There’s no way around the law that all vehicles on the road must be insured. It is required in every state to operate an automobile. Fortunately, you do have options when it comes to finding affordable coverage. Start by getting quotes from multiple companies. Then compare what the policy covers and the premium amount to determine the best deal. Chances are you can find the lowest deposit car insurance for the type and amount of coverage you need if you search multiple carriers. Start comparing quotes now and lower your rates.