You won't be able to find any real "no deposit" or "no down payment" car insurance through a reputable insurer. Fortunately, you can find an affordable policy with a low down payment.

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What is no deposit or no down payment car insurance?

No deposit or no down payment car insurance refers to auto insurance coverage that requires no payment up front at the time of signing up for a policy. Unfortunately, no reputable car insurance provider is going to underwrite a policy without seeing money first. In fact, be wary of a company saying it will sell you auto insurance without any sort of down payment. The majority of these types are fraudulent.

While no reputable insurer is going to sell you car insurance without a deposit, plenty will sell you one with an affordable, low down payment. Going with monthly payments is an excellent way to get coverage if the budget isn't there for semi-annual or annual payments.

If you are able to pay the full bill for the year for car insurance, it's definitely advised. Insurers usually offer discounts on your rate as incentive to purchase longer-term policies. Regardless of how many months your policy is for, you will have to pay for at least a month up front.

Car insurance companies often offer various flexible payment options to work with your needs. These options include:

  • A first month's payment
  • The total premium cost, usually for six months or the full year
  • The monthly payment cost split evenly over six months

Compare car insurance quotes from top companies

Cheapest low down payment car insurance

There are plenty of auto insurance providers that offer low down payment policies. Looking at the top providers of car insurance, we found that USAA has the lowest average price for a first down payment on minimum-coverage car insurance at $69, followed by State Farm at $83 and American Family at $96. However, you should be made aware that USAA only provides car insurance for military personnel and veterans.

If you're looking to make a down payment on a full-coverage car insurance policy, USAA has the cheapest rate at $159. It is followed by State Farm at $167 and American Family at $194.

Below is a table showing the average down payment for both minimum-coverage and full-coverage car insurance on a one-year policy.

Cheapest down payment for car insurance by company
Company Minimum coverage Full coverage
Allstate $117 $267
American Family $96 $194
Farmers $146 $283
GEICO $112 $309
Nationwide $129 $285
Progressive $105 $224
State Farm $83 $167
Travelers $173 $326
USAA $69 $159
Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.

Should you pay upfront or make monthly payments?

Whether you should pay in full or in monthly payments for car insurance really comes down to your personal budget. Paying monthly won't get you the discount that often comes with paying in full, but it will get you covered, which is the top priority. If you can afford to pay in full, you should see a marked difference in your total premium rate for the year.

Following are car insurance providers that offer a discount for full payment of your premium.

  • Allstate
  • American Family
  • Farmers
  • Progressive
  • Travelers

Three ways to save money on your car insurance down payment

If you're looking for further ways to save money on your car insurance when making a down payment, discounts, updating your limits and comparing quotes are your best bets.

Explore car insurance discounts

The car insurance industry is highly competitive, and providers can offer many discounts in order to stay ahead. Insurers usually have a list of discounts on their website that you may qualify for. When asking for a quote, talk to your potential insurer and make sure you get all the discounts available to you.

Evaluate your coverage

If you have had any major driving habit changes, take the time to look over your current policy. For example, if you have started to work from home more and drive less, or if your car is currently in storage, look into alternative coverage such as pay-per-mile insurance or reducing your coverage to minimum liability insurance.

Compare quotes

Car insurance companies change their premiums yearly to reflect various risk factors and to stay profitable. If you want to continue to get the best coverage at the cheapest rate, compare car insurance quotes from multiple providers.

No down payment car insurance FAQ

Why do car insurance companies require down payments?

Insurance companies require you to pay a minimum down payment in order to activate your car insurance policy. In the event of a car accident, you would expect the policy to cover damages and injuries. If no premium has been paid, the coverage would not be in place to do so.

Auto insurers also require a down payment to reduce high-risk drivers. If you can't make a partial down payment, there's the concern that you might cancel before paying, leaving yourself uninsured and a risk to others.

Why is my first car insurance payment more expensive?

Your first car insurance payment may be more due to your provider having you pay the administrative fees associated with your policy up front. You may be able to get the fees spread out more over the course of your policy term by talking with your car insurance company.

Methodology

We used Quadrant Information Services to generate car insurance quotes from every ZIP code in Colorado from the following providers:

  • Allstate
  • American Family
  • Farmers
  • GEICO
  • Nationwide
  • Progressive
  • State Farm
  • Travelers
  • USAA

Our sample driver is a 35-year-old male with a clean record who drives a 2012 Honda Accord LX 13,500 miles per year. When a full-coverage policy is discussed, these are the following limits:

  • $100,000 bodily injury liability per person/$300,000 per accident
  • $100,000 property damage liability
  • $500 collision and comprehensive deductible

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