Consumers looking to save money and find coverage that fits their budget often consider purchasing very cheap car insurance with no deposit. While it is possible to find cheap auto insurance in every state, the term “no deposit auto insurance” is not a standard phrase used by insurers or agents.
These policies don’t cost much more than the standard ones, but not all insurers offer them. These policies are also not allowed in most states, with only seven states currently allowing auto insurance coverage with no deposit required.
How does No Deposit Car Insurance work?
It’s generally referred to as policies that do not demand an initial deposit when applying for coverage. This means that your first month’s premium is equal to or cheaper than the following monthly premiums. So, the first installment payment made on the policy will be considered as the down payment.
The term very cheap car insurance with no deposit often means a “bare bones” policy, often state minimum liability only coverage with the deposit waived.
While there is no deposit put down, a payment still needs to be made before the policy becomes valid and in effect. Even when you don’t make a deposit, this amount will be applied toward future months’ premiums. Therefore, your first installment will be the same or cheaper than the following months, but it does not mean that the total cost of your insurance premium will be less. Not paying for your premium in full will almost always cost you a little more. For the cheapest plan, pay for an entire year of coverage in one payment.
To compare the best rates, along with the lowest deposit requirements where you live, get a free online quote. To get started, just enter your zip code and fill out a simple five-minute quote application.
Is Car Insurance With No Deposit a Scam?
Most large insurers concerned about their reputation do not use the term no deposit car insurance. They don’t promote this type of offer because it doesn’t exist.
Many people mistakenly think that they will be getting free car insurance for a month with this type of no deposit coverage. Simply put, there’s no such thing as free auto insurance for a week, month, or two or more months.
You should be aware that auto insurance companies will not provide immediate coverage without receiving a payment first. Only after you have paid your first installment will your coverage start. So be wary of companies that claim you can get your first month of coverage free. The truth is any broker or insurer that offers you very cheap car insurance with no deposit is not being truthful and potentially trying to scam you into a more expensive policy.
Very Cheap Car Insurance with No Deposit is a Scam!
That’s the bad news. You cannot buy an auto insurance policy without putting down a deposit first. It’s just that simple. No insurer will offer any coverage, even for a day, without first receiving a payment. Only after a payment is made will the policy become active.
The good news is you could qualify for a $20 down payment car insurance policy in minutes and get a low monthly payment, starting at just $39 a month. It’s never been easier to get cheap auto insurance coverage with the lowest deposit requirements. Enter your zip code to get started.
Qualify for $20 Down Payment Auto Insurance
The good news is you might qualify for $20 down auto insurance with rates as low as $39 a month. That’s a low deposit amount that almost anyone can afford. Safe drivers that meet certain criteria, such as a clean driving record and a credit score above 700, can get $20 down auto insurance with rates that start at about $1 a day.
We can help you find the lowest deposit auto insurance deals from just $20 down. Enter your zip code and answer a few simple questions. It only takes about four or five minutes. You’ll then be matched with the best rates and lowest deposit requirements from national and regional providers. Get started now.
What does the Deposit Required depend on?
The deposit required to secure coverage will depend on many factors, including:
- The Insurance Company
- The Age and Gender of the Driver
- The Automobile and whether it is owned, financed, or leased
- Location
- How Many Miles you Drive Each Month
- Driving record and how long a person has been driving
- Credit Rating
- Homeowner or Renter
A deposit in select states and from various carriers could be anywhere from zero down to 33% of the yearly premium. If you have a good driving record and a used car, your down payment should be much lower than your monthly premium. Usually, it’s anywhere from $20 to $50.
Insurance rates are about pricing in a particular driver’s potential risk. In general, the safer your driving record is over a three-year period, the less down payment you will need to put down. Other important factors, like the monthly miles driven and the type of automobile you drive, will significantly impact rates and the deposit amount required.
Higher-risk drivers who have serious driving convictions, like a DUI or multiple at-fault convictions on their record, will be required to put down a higher deposit, and the overall premium will cost more. Some insurers do not take drivers who have a DUI conviction or multiple reckless driving tickets.
The Car you Drive Impacts the Insurance Deposit Required
It’s essential to think about your next vehicle purchase and how it relates to insurance rates. Expensive newer cars that cost over $20,000 will almost always have a higher deposit because the overall premium will be greater.
Also, financed and leased vehicles will almost always require comprehensive coverage, which is more expensive and requires a larger deposit amount in most cases. Therefore, if you are looking for $20 down payment car insurance coverage, you should get a used vehicle that is not financed.
Apply for Low Deposit Auto Insurance
In general, insurance companies offer better deals to those drivers who can pay the entire policy in one payment. But, if you are like many consumers and can’t afford to pay for the whole premium amount upfront, you will need to make monthly payments. The good news is almost all insurers have convenient monthly payment programs.
When you apply for a quote, you are then given a chance to select a payment option. You can pay in full, quarterly, or month to month. You will also be quoted the Deposit Amount – if any Monthly Premium Payment Amount is not paid off. However, making monthly payments increases the cost of the premium a bit.
Using a 2012 Honda Accord as an example, Progressive Insurance provided a low deposit amount. The first monthly payment totaled $90.60, and the total premium payoff amount quoted was $458. Note how small the deposit was of about $17. Almost anyone can afford this amount, and it makes securing coverage easy for those low on funds.
Nevertheless, you should also note in the example above that if you pay in full, the total premium will be reduced by $62.
Once you go through your quote and decide on a payment option, you can instantly purchase your policy. You can even use your smartphone through the entire process and print out your I.D. cars in a matter of minutes. If you choose an installment plan, set up automatic payments to never miss paying your bill. Some insurers offer a small 2% discount just for setting up automatic payments.
Advantages of Low Deposit Car Insurance
There are several reasons to consider car insurance with low down payments. In some instances, you might be in a financial crunch and low on money. In this case, getting the cheapest coverage with zero down might be the only option. Here are a few reasons why these plans are so popular:
- Securing Coverage at little cost
- Offers Monthly Premiums at no additional cost
- Ability to Add Additional Coverage or Cancel the Plan at Anytime
- Automatic Payments Using a Credit Card or Bank Debit
Who Can Qualify For $20 Down Payment Car Insurance?
The less of a risk you pose to an insurer, the more likely you will qualify for coverage with $20 down. This means no prior at-fault accidents and no outstanding tickets. Also, credit is more of a factor than you might realize. If someone has a good score, they are more likely to pay their insurance premium and on time each month. It’s also why insurance companies give these customers better rates.
If you meet specific basic requirements, you can get cheap car insurance with the first month free. Each insurer has different pricing metrics, and you might get covered for just $20 down or pay up to 25% or more of the premium. Remember, low-risk drivers will get the best deals, including a lower deposit.
What If you Don’t Qualify for a Low Deposit?
While it might be hard to find a low deposit from $5 to $20, there are still steps you can take to get cheaper coverage. If you’re tight on cash but need car insurance today, you still have some solid options. This includes:
- After you have applied for 10 or more quotes, compare the cheapest first installment payment. This installment will be a small deposit, plus your monthly premium amount.
- Consider buying the state minimum liability insurance where you live and minimize add-ons. This determination will lower your deposit and monthly payments.
- Choose a Higher Deductible
- Fix the issues that resulted in you paying more for coverage. For example, if you have bad credit or tickets, work to get it cleared up.
Cheapest Policies For High-Risk Drivers
If you are classified as a high-risk motorist, finding cheap car insurance can be frustrating. Insurers make a profit by not paying out claims, and the riskier a driver is, the more likely they will get into an accident. This is the reason why down payments and premiums are so high for these types of drivers.
Getting a DUI, an at-fault accident, reckless driving, or having terrible credit can all send premiums up 50% and more. If you fall into this category, get as many quotes as possible, and choose the lowest deposit. Also, get the basic coverage that is less costly. There are companies like The General that have low rates for higher-risk motorists.
Final Takeaways
If you need instant coverage but have little or no cash, you may look for car insurance with low down payment online. Unfortunately, you can’t get auto insurance without paying something for the first month, at least not from a reputable auto insurer. Keep in mind that you can get a cheaper first month of coverage if you get low or no deposit car insurance, but you will likely pay higher premiums in the following months.
While you might have to compare several quotes from different companies, don’t give up until you find both the most affordable plan along with a low deposit requirement. There are still great deals out there, and all it takes is some diligence and quote comparison research. To get the cheapest insurance where you live, start your online application by entering your zip code and compare quotes.