Cheapest no down payment car insurance
Some drivers may be looking for very cheap car insurance with no deposit required, but in most cases, you should expect to put down some money. When purchasing car insurance, the money you put down is what binds the policy, putting your coverage into effect (or activates your coverage). However, the money you pay up front is not technically a down payment. It is, instead, your first premium payment or installment. If you prefer to make small payments throughout the year, you could pay monthly rather than in one lump sum for the entire policy period.
What companies offer cheap car insurance with no deposit?
Searching specifically for very cheap car insurance with no deposit is unlikely to yield many credible options, as many policies require a payment to activate the coverage. There are, however, several options for low- or no-down-payment coverage. Based on the average premiums of the carriers we reviewed, you may be able to get cheap minimum coverage auto insurance from insurers such as Auto-Owners, Geico, and Amica.
When insurers offer a no-down-payment option, you save one month of premium payment and instead pay the remaining months of your policy at a higher rate until your policy is renewed. Many drivers looking for cheap no down payment car insurance may actually be looking for lower overall coverage. Investigating low-cost insurers could be an effective way to reduce the impact of your premium on your budget.
Similarly, Auto-Owners, Geico and State Farm could be thought of as offering cheap full coverage auto insurance with no down payment, or at least a minimal down payment based on our average rates from Quadrant Information Services. Your individual rate will be determined by factors such as your driving record, claims history, and coverage requirements.
Insurance company | Average monthly minimum coverage premium | Average monthly full coverage premium |
Auto-Owners | $27 | $109 |
Geico | $30 | $108 |
Amica | $37 | $125 |
State Farm | $38 | $116 |
Travelers | $40 | $121 |
How much does a car insurance down payment cost?
While not a down payment, the cost to activate your car insurance policy will depend on your premium for the entire policy period, which is six or 12 months. You usually have the option of paying the full premium for the policy period up front, semi-annually, quarterly, or monthly. If you pay for your car insurance in installments, the insurer may charge you additional fees.
The table below shows how much you might have to pay upfront, on average, to finalize an auto policy with one of the top, low-cost insurers. While these are averages, they can be used to determine whether you're receiving a competitive quote based on whether you pay your entire year's premium in a lump sum or monthly.
Insurance company | Annual full coverage “down payment” amount* | Monthly full coverage “down payment” amount** |
Auto-Owners | $1,305 | $109 |
Geico | $1,297 | $108 |
Amica | $1,495 | $125 |
State Farm | $1,397 | $116 |
Travelers | $1,447 | $121 |
*Average annual premiums do not include a pay in full discount (if available)
**Average monthly premiums do not include installment fees.
What to keep in mind when getting no down payment car insurance
There are some things to consider when looking for cheap no down payment car insurance. These tips may help you save on your car insurance costs.
Paying monthly could cost more in the long term
Although paying your auto insurance monthly may be more cost effective in the short term, it may end up costing you more in the long run. This is due to the fact that most insurance companies charge an installment fee for each payment. So, if you have a six-month policy with a carrier that charges a $3 monthly installment fee, you would end up paying an additional $18 for the policy period, which is added to your total cost of car insurance.
Each insurance company determines its own installment fee, which can range from $1 to $5 or more per installment. If you're looking for car insurance quotes and intend to make monthly payments, ask the insurance agent how much the installment fee is so you can decide if it's worth it to you to pay monthly.
Lump sum payments could save money
Even if you are looking for cheap no down payment auto insurance to save money, keep in mind that those who can afford to pay their premium in full may end up saving more money than monthly payers. In addition to avoiding recurring installment fees, many insurance companies offer a discount for paying premiums in one lump sum.
If you want to pay your premium in full, planning ahead of time by budgeting for your annual premium and setting aside the amount for each month in a savings account may make paying in a lump sum feel more manageable. When your next renewal is due, you can use the money you saved to pay your premium. However, because car insurance rates are rising, you may end up owing more when your policy renews. It may be worthwhile to set aside additional funds to account for an increased premium.
Shop for insurance before buying a car
Shopping for insurance before buying a car can help you stick to your financial goals if you're on a tight budget and want cheap down payment car insurance.
One factor that influences car insurance rates is the make and model of your vehicle. If the vehicle is paid off, you may be able to forego full coverage and instead obtain cheaper minimum coverage insurance. However, some newer cars have advanced safety features that may make them less expensive to insure. Shopping for insurance quotes can help you decide which car to buy and find the cheapest car insurance companies that provide the coverage you require.