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Cheap No Down Payment Car Insurance

Buying no down payment car insurance seems like a good idea, but it’s not so simple. Here’s the truth about car insurance with no down payment.

Man calculates insurance costs

No down payment car insurance sounds like a great option, right? Unfortunately, it doesn't exist, so you'll have a hard time finding it. Car insurance policies don't come with a traditional down payment.

You'll usually have the option to purchase your car insurance policy for the entire term (six to 12 months) at once or to pay in installments, usually monthly. Either way, you'll have to pay at least some money when you first purchase your policy. Luckily, there are plenty of other ways to make your car insurance affordable. This article covers:

  • How to get cheap, no down payment car insurance
  • What to expect with down payments
  • Cheap car insurance companies

How to get cheap, no down payment car insurance

When car insurance companies advertise no down payment, that means you won't have to pay more than the first monthly payment when you purchase your insurance. Insurance companies consider zero-down-payment policies a risk and don't even offer it as an option. You'll need to be prepared to make a financial commitment as soon as you obtain an auto insurance policy.

If you can afford to purchase the entirety of your policy from the get-go, it may be cheaper for you. If you pay a smaller amount when you initially purchase your insurance, you may pay more in monthly premiums over the duration of your policy.

When you buy car insurance, you'll typically have the option to buy the total annual or six-month amount, to pay in quarterly installments or to pay monthly. Many insurance companies offer discounts for drivers who purchase the policy at once.

How to save money on car insurance

The cheapest option is usually paying for a six-month policy up front in one down payment, as opposed to paying monthly. Insurers give discounts to policyholders who pay their entire six month-premium at once. The larger the down payment, the less you'll pay overall.

Putting down a large starting payment isn't an additional cost; it's part of your premium that you'll have to pay at some point. Most insurance companies offer savings for paying up front, so your annual insurance bill may be cheaper if you pay all at once.

Other than paying for your policy at once, these are some ways to save money and get cheap car insurance:

  • Defensive driving courses
  • Good student discounts
  • Maintain a good credit score
  • Compare car insurance quotes from different companies
  • Bundle different kinds of insurance (home and auto, for example) with the same company
  • Invest in a car with safety features
  • Maintaining a clean driving record
  • Stick to your state's minimum insurance coverage requirements

Car insurance down payments

These are the prices drivers should expect to pay if they pay for the full six months of car insurance at once, as opposed to paying monthly:

Savings for large down payment vs. minimum down payment
Payment schedule Down payment Monthly premium (x5) Total cost Total savings
Monthly $126 $158 $918  
Six-month total up front $865 $0 $865 $53
Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.1

If the driver chooses to pay for a six-month policy in one down payment, they will save an average of 6%, or $53. However, that's an average of three different major insurance companies. Savings may vary depending on your insurance company and other factors.

For example, we found that one company offered no savings for paying for the policy up front, whereas another offered savings of 18%. That's why it's important to compare auto insurance quotes from several insurance companies.

Cheapest car insurance companies

Trying to keep your auto insurance prices low? The insurance company you choose is a significant factor in how much you could pay. We've compiled some top insurance companies and the monthly rates you could expect to pay for cheap car insurance.

Cheapest car insurance companies
Company Monthly premium
American Family $50
GEICO $52
State Farm $52
Progressive $62
Nationwide $68
Farmers $70
Allstate $86
Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.1

Our data shows that American Family offers the cheapest auto insurance if you're paying monthly, while Allstate has the highest monthly rates. However, our driver's profile may not be reflective of your experience on the road, so your prices could be different.

Some insurers allow you to choose from several payment options, which can impact your monthly rates. Savings also depend on several factors, including your credit score, location, driving record and the type of policy you choose. Drivers can usually expect to pay around 5% to 10% less if they pay the entirety of their six-month policy in advance, as opposed to paying monthly.

Methodology

1The policy we analyzed covers a 30-year-old female driving a 2015 Toyota Camry less than 10,000 miles annually in the Seattle metro area. The driver chose:

  • $25,000/$50,000/$10,000 liability insurance (the Washington State minimum)
  • $10,000 of personal injury protection, or PIP, coverage
  • Collision coverage with a $500 deductible
  • Comprehensive coverage with a $500 deductible

For our insurance company data, rates are based on a driver profile of a 35-year-old who owns a 2015 Toyota Camry, drives less than 10,000 annual miles, has good credit, has a clean driving record and chose the state minimum liability in 10 different states.

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