How to Get Affordable No Down Payment Auto Insurance

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A Concise Overview:

  • Car insurance with no money down is not available in every state or with every company
  • Do the math – it might not be a better deal if you’re charged more for your insurance
  • Many factors are used to determine your auto insurance rates

Affordable no down payment auto insurance is hard to come by since it’s not available in every state, and not every company will offer it. On top of that, cheap car insurance with no deposit is not always the deal it seems to be. You might see something like “first-month free car insurance” advertised, but be cautious. You could end up paying more than you expect when you add all of the fees together.

The other problem is some people assume they have to skimp on car coverage, which is not true. You can still get comprehensive coverages. The only thing that changes is how you pay.

Whether you want to pay in advance or monthly, the best way to get cheap car insurance quotes with no deposit is to shop around. Compare different companies, and make sure you are being quoted the full cost of a policy, including any additional fees. This is the best way to compare average rates.

Looking for no down payment auto insurance quotes? Enter your ZIP code at the top of our page and compare online quotes from auto insurance companies that don’t require a down payment.

Can I get auto insurance with no down payment?

If you’re in the market for new car insurance, you have a few options available to you. On one hand, you can cough up a sizable chunk of change and pay the full auto insurance rate in total. Choosing this route often yields auto insurance discounts for an upfront payment. Or you can go with the alternative (a popular choice for many drivers on a budget) and pay monthly car insurance rates.

Keep in mind opting to pay a monthly car insurance premium can still have upfront costs, in the form of an initial down payment, as a sign of good faith. While auto insurance companies still accept checks for the down payment out there, the check still has to clear before your coverage goes into full force.

How much is this first down payment? And what if you can’t afford it?

no down payment car insurance costs

The fact is, you need money to pay car insurance bills, but sometimes that’s the last thing you want to spend money on. That’s when “buy now, pay later” cheap car insurance is tempting.

A typical car insurance down payment for a monthly rate could equal up to two months of coverage. Auto insurance down payments may depend on individual policies and states, but they are often estimated at anywhere from 20% to 33% of a six-month total.

Here’s where you come to a rock and a hard place: If you’ve chosen to pay a low monthly car insurance rate because you can’t afford to pay a six-month rate upfront, you’ll likely have a hard time coming up with a 30% down payment.

This leads us to door number three. There is a possibility of securing zero down payment auto insurance, cutting out an upfront cash commitment altogether. However, this auto insurance deal is not available in all states or from any service provider.

What will you get when you find a company that offers no down payment auto insurance?

Your first monthly payment may be used as the policy down payment on your annual premium, providing the illusion that you are getting zero down payment car insurance. A car insurance provider that waives your down payment in this manner minimizes your out-of-pocket costs.

Some companies will also offer discounted deposits, like $20 down payment car insurance from companies like GEICO. They may also offer cheaper car insurance, such as auto insurance for $30 a month.

What’s the catch with no deposit auto insurance?

As described above, an auto insurance provider may offer the cheapest car insurance with no down payment insurance by waiving the down payment and applying it as your first month’s payment. This is ideal. However, since $0 down auto insurance is in high demand for those strapped for cash, an insurance company may use this golden opportunity to increase your monthly premium in lieu of a down payment. This could lead to a higher monthly payment.

To provide a better example, an insurer may quote you $400 for annual premiums, paid in full. They may also offer you the alternative of no down payment auto insurance rates of $45 per month. Thinking back to math class. Which is the better deal? Paying month-to-month with no down payment will ultimately cost you $540 per year, $140 more than the annual rate paid in advance.

Yet for those who don’t have $400 to spare, paying more for no down payment insurance over the course of a year may still be the better choice to have auto insurance coverage. With no down payment car insurance, you will completely bypass the cash obligation. But keep in mind that you may still have to pay a minimal administrative processing fee to open the policy. You will also /be responsible for all monthly payments. If you only need coverage for a short period of time, you can see if temporary car insurance is right for you.

The one thing that you don’t want to do is go without car insurance. The Insurance Information Institute reports that in 2015, 13% of drivers were uninsured, making uninsured motorist coverage essential. Most states require that you carry at least minimum coverage and can issue fines or suspend your driver’s license if you don’t.


Since no down payment car insurance is not the industry standard, you may not be able to find this type of insurance just anywhere.

Cheap monthly auto insurance with no deposit may be available in these states:

car insurance without deposit availability

When you get car insurance quotes from providers like GEICO, Progressive, or State Farm, they typically give you a breakdown of your monthly payment schedule ahead of time. This will help you decide if the plan makes sense for you.

Are there auto insurance companies that don’t require a deposit?

A no-down payment auto insurance company will usually advertise as such. You can also purchase no money down auto insurance online, directly through insurance providers, or a third-party website. You can’t buy no down payment auto insurance from everyone; it can take some searching. Keep in mind your coverage limits are not based on your payment method.

The average premium can be higher simply because you don’t get the discount for paying up front. Each person has to consider their own unique situation.

Why do insurance companies ask for down payments?

Insurance companies charge down payments to protect themselves. It prevents people from taking out a policy just to show proof of insurance when needed and then failing to pay anything to the insurance company.


Who has the cheapest auto insurance? If I’m looking for dirt cheap auto insurance, where can I find the lowest rate? These are common questions often asked when people are searching for auto insurance with no required deposit.

As you probably know by now after shopping and comparing car insurance online, your individual insurance rate will depend on a number of variables.

no down payment car insurance

What are the no down payment auto insurance companies?

The companies that provide no down payment car insurance are:

  • USAA
  • Farm Bureau Insurance
  • Erie
  • Auto-Owners Insurance
  • State Farm
  • American Family
  • Progressive
  • Metropolitan
  • Nationwide
  • Allstate
  • Travelers
  • Farmers

Since your driving record has the most impact on your auto insurance rates, let’s look at how your rates can change with an accident, speeding ticket, or DUI.

Average Annual Auto Insurance Rates by Driving History

CompaniesAverage Annual Rates with a Clean RecordAverage Annual Rates with One AccidentAverage Annual Rates with One DUIAverage Annual Rates with One Speeding Violation
American Family$2,693.61$3,722.75$4,330.24$3,025.74
Liberty Mutual$4,774.30$6,204.78$7,613.48$5,701.26
State Farm$2,821.18$3,396.01$3,636.80$3,186.01

A clean driving record will keep your rates to around $260 a month, but one accident will jump your rates to about $340 a month. Of course, if you stay with certain insurers, they may offer services like accident forgiveness. The average cost when you’re switching to a new company will not have that discount, though. If you’re a safe driver, your annual premium will fall over time.

Your credit history also affects your rates. According to Experian, the average credit score in the U.S. is 714, which is considered good. If your score is lower than average, there are ways to improve it, like paying your bills on time. Credit history can have as big an impact on your rates as some driving habits.

Some factors, like your credit score, can easily be improved. Do what you can to improve your score to get the lowest car insurance rate. Other factors, like having teen drivers, will require patience. Yes, some companies offer discounts for good grades and driving classes. The national average for teens remains high because they have limited experience and present a higher risk.

No Down Payment Car Insurance Coverage

Just like any other car insurance policy, your no down payment quote will be composed of several insurance components that can impact price, including but not limited to liability coverage, collision coverage, and uninsured/underinsured motorist coverage.

Liability car insurance is the coverage required in all 50 states and is mandatory. Other coverage options, including add-ons like collision coverage, will offer extra protection and can increase your base rate further. The best way to approach getting a good deal on no down payment car insurance is just as you would any other policy. We’ll cover how to keep your no down payment insurance affordable in the next section.

How does auto insurance down payment affect monthly rates?

Now, imagine the cost of car insurance monthly payments if you pay a deposit at the beginning of the policy. You’re paying a portion up front, and you have to pay any remaining balance in the coming months. Auto insurance with a low down payment will make your monthly payments more expensive. Car insurance companies that don’t require a deposit may not have low-payment car insurance options.

Let’s look at an example of how a no down payment car insurance affects monthly rates and how deposits lower them.

No Down Payment Auto Insurance Compared to Depositing Auto Insurance

Down Payment Amount on Auto InsuranceMonthly Rates After Deposit
10% or $300$225/month
20% or $600$200/month
30% or $900$175/month

These monthly rates are based on annual auto insurance rates worth $3,000, and 10% of $3,000 is $300. The car insurance company will deduct $300 from the policy total. If you have a 12-month policy, your auto insurance provider will divide your annual rate by 12 to get the monthly rate, which would be $2,700 for the year.

Some companies only offer policies for a six-month period. In that case, your annual rate will be divided into two. For the sake of the example, a six-month car insurance policy would be $1,500. However, the deposit rules are the same. The more you deposit, the cheaper your monthly auto insurance premiums.


If there’s one thing to know about signing up for no down payment insurance, it’s that comparison shopping can be your best friend. There’s no way to tell which auto insurance provider will offer cheap no-deposit insurance policies until you request a quote. You can play around with things like your comprehensive deductible. But you should make sure you’re comparing the same terms between companies. Are you really saving money or just cutting coverage? Once you factor in things like a multi-policy discount, you may see stark differences.




Drive safe. Obvious, but true, working to improve or preserve your driving record can keep monthly, dirt cheap car insurance.

 Drive less. Have you ever considered carpooling, using public transportation, or even working from home? Now is the time to put these grand ideas into action, considering that fewer monthly miles on your vehicle mean a cheaper monthly insurance rate.

 Play with your deductible. This may prove to be a problem if you don’t have enough extra cash to pay for an insurance down payment, let alone deductibles. However, increasing your deductible, the amount you will pay in the event of an at-fault accident, can inversely lower your policy rate.

 Ask for discounts. When it comes to affordable car insurance, you never know until you ask. Extra policy discounts may be available for military, students, driver’s education, nurses, multi-car households, firefighters, and more.

 Talk to your boss. Your company may offer bulk discounts when an auto insurance policy is purchased through a company-sanctioned provider.

 Ask for automated payments. It’s possible that your no down payment insurance could cost more than an annual rate paid in full. Ask your new service provider to set you up with automatic payments to bring your monthly rate down even more.

 Take advantage of the extras. If you can’t do anything to get your no down payment insurance quote to drop, at the very least, look for a reputable insurance company that offers some freebies. For example, many companies provide an in-car device to track driving and potentially lower rates. Some insurers build extras into their standard car insurance policies, including coverage for transportation expenses after an accident, locksmith services, and pet injuries.

If you want very cheap car insurance with no deposit, enter your ZIP code at the top of this page, and you can compare companies that might offer insurance without a deposit required.