When you buy car insurance, you’ll typically have to make your first payment in order to actually start your coverage. This initial payment is often called a car insurance deposit or down payment, even though it’s technically just your first monthly premium.
Trustworthy companies don’t offer no-money down or no down payment insurance where you get the first month of your policy free. But since the “down payment” you pay to start your policy is just your monthly premium, comparing quotes and choosing the most affordable option will help keep your monthly insurance payments low.
What is no-down payment car insurance?
People who search for no-down payment car insurance want to find coverage that doesn’t require any money down before it starts. Unfortunately, no-down payment car insurance doesn’t really exist.
When most people refer to the down payment or deposit on their car insurance, they usually mean their first month’s premium. You’ll always have to make a payment or a deposit in order to start your policy, but when you buy coverage, your insurance company will offer you a few different ways to pay.
Most companies give you the option of paying your premium either monthly or all at once at the start of the policy. Paying all at once costs more up front, but it can actually save you money in the long run, since you’ll earn a discount for paying for the entire 6-month or twelve-month policy in one go.
But whether you choose to pay monthly, every two months, or all at once, you won’t be able to avoid making an initial down payment before your coverage can start.
Is zero-down car insurance legitimate?
Zero-down payment car insurance doesn’t exist, mostly because it wouldn’t make sense. A down-payment is just your first car insurance payment, so if someone could get insurance without making a deposit and paying for the first month, the company would be offering service for free — and taking on the risk of that driver crashing and making a claim.
Some companies might appear to offer zero-down car insurance or insurance where your first month is free and you can pay later, but you shouldn’t trust any insurers that claim to have this option.
Disreputable companies may offer no-down payment car insurance as a way to steal the personal information of drivers looking for the cheapest rates — they may also just pocket your money without actually providing any coverage.
While there are some companies that act dishonestly, it’s still safe to get insurance online. Instead of zero-down car insurance, look for cheap coverage from a well-known and reputable provider.
Comparing rates through a marketplace like Policygenius can help you find cheap options, so you can keep your monthly payments as low as possible.
Companies that offer car insurance with a low down payment
Since the down payment — or deposit — that you have to make when you get car insurance is just your initial payment, getting a lower deposit is as easy as choosing the cheapest company.
The best way to find cheap car insurance is to compare rates as you shop. A few of the most well-known companies have car insurance rates that are less than $100 per month.
Company | Average monthly cost | Average annual cost |
|---|---|---|
USAA | $87 | $520 |
Erie | $94 | $566 |
State Farm | $98 | $587 |
GEICO | $99 | $592 |
American Family | $118 | $708 |
Nationwide | $123 | $737 |
Travelers | $125 | $753 |
Amica | $141 | $844 |
Progressive | $148 | $887 |
Farmers | $162 | $972 |
Monthly and six-month rates for a full-coverage policy.
How to get cheap car insurance with a low down payment
Since your down payment is either your first month’s premium or the cost of your entire policy, finding auto insurance with a low down payment is just looking for the best rates. In order to get insurance with a low down payment:
Compare quotes from different companies: Decide what you can afford, then shop around for quotes from multiple companies to find cheap car insurance. You’ll be able to see easily which companies have more expensive rates than others.
Check for payment discounts: Setting up automatic payments or paying through electronic funds transfer (EFT) will usually earn you a discount, while paying your car insurance by credit card may mean extra fees.
Pay your policy in full at the start of your term: Some of the biggest insurance companies offer discounts for paying your entire premium in full instead of in monthly installments, including Allstate, American Family, Progressive, and Farmers, which means paying all at once will be cheaper in the long run.
Drive safely: Being involved in a car accident or getting tickets for traffic violations will raise your car insurance rates. Staying safe on the roads will mean lower rates over time.
Don’t be afraid to reshop for auto insurance: It’s normal for auto insurance to get more expensive for everyone each year. If your rates get too high, consider switching policies for a cheaper company.
→ Learn more about ways to lower your car insurance rates
Frequently Asked Questions
Can you get car insurance with no immediate payment?
No, you’ll have to pay for the first month of your car insurance before your policy starts. Your rates will be cheaper if you can afford to pay your entire policy at once — or commit to a larger deposit.
Who can get car insurance with no deposit?
The only people who can technically get car insurance without a deposit are drivers who pay their entire premium up front. In this situation, you still won’t get a month or more free of charge. But you’ll pay less over time than drivers who pay monthly instead of all at once.
Do you have to pay for car insurance every month?
It’s your choice whether you want to pay for your car insurance every month or every six months. If you decide you want to pay for your insurance every month instead of every six months, be sure not to miss your monthly dues. Otherwise you risk getting your policy canceled.
Methodology
We found the average cost of car insurance from each of the companies in our study. We determined the costs in our comparison using public rate data provided by Quadrant Information Services.
These rates were from every ZIP code across every state, along with the District of Columbia. Rates were for a sample driver who was a 30-year-old male with a 2017 Toyota Camry. Our sample full-coverage policy included the following limits:
Bodily injury liability: $50,000 per person, $100,000 per accident
Property damage liability: $50,000 per accident
Uninsured/underinsured motorist: $50,000 per person, $100,000 per accident
Comprehensive: $500 deductible
Collision: $500 deductible
Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of costs. Your actual quotes may differ.
