Buying cheap car insurance without a deposit is nearly impossible. Reputable companies won't sell you an auto insurance policy if you don't put at least some money down on it.

But the good news is that while you probably won’t be able to find cheap “no-down-payment” car insurance, you can find cheap car insurance with a low down payment.

Keep reading to learn more about getting cheap car insurance with a low deposit:

What is no-deposit or zero-down-payment car insurance?

When people refer to no-deposit car insurance, they're looking for insurance coverage that doesn't require an upfront payment when signing up. Unfortunately, getting auto insurance from a legitimate company without a down payment isn't possible.

Beware of any company that offers to sell you car insurance without putting money down on it — such as your first payment — in some way. Most of these insurers are fraudulent.

No reputable insurance company will sell you car insurance with no deposit. However, they will often sell you car insurance with a low deposit.

Can you buy instant car insurance without a deposit?

The short answer is no. However, there are ways you can obtain coverage while paying low upfront rates rather than making no deposit at all.

If you need cheap car insurance now, one way to get it is to pay for your policy monthly. This can help you get coverage immediately, and you may have an easier time affording smaller monthly payments rather than bigger annual or semi-annual ones.

If you can afford to pay the total annual bill for your policy, go for it. This can be a great way to get cheaper auto insurance, as many companies discount your rate for going this route. Just know that you'll probably get a discounted rate for the first payment only if you pay in semi-annual or annual installments.

Getting auto insurance from a legitimate company doesn’t mean you have to pay for a full year of coverage in advance and all at once. It does, however, usually mean you have to pay for at least the first month of coverage.

To complete the process of obtaining car insurance, you'll usually be asked to pay some type of upfront cost. Some companies offer several flexible payment options you can pay as a down payment. These payment options usually include:

  • The first month's deposit.
  • The total policy premium, often for six months or a year.
  • The monthly payment cost, usually split evenly over six months.
Cost of car insurance premiums, monthly vs. upfront payment
  Monthly Six-month total upfront
Down payment $69.57 $943.12
Monthly premium (x5) $84.99 $0
Total cost $1,004.46 $943.12
Savings -- $61.39
Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.

As the table above shows, the first month’s deposit usually is cheaper than the monthly payments that follow.

Looking for cheap car insurance with a low deposit?

Which companies offer the cheapest low-down-payment car insurance?

Although you’ll have a hard time finding legitimate insurance companies that will offer you no-down-payment car insurance, you should have little trouble finding companies that will offer you low-down-payment car insurance.

We found that State Farm offers the cheapest auto insurance in this situation, ringing in at an average $64 per month. Worthwhile companies that are also low-cost include Progressive and American Family.

Cheapest low-down-payment car insurance for minimum coverage
Company Average monthly rate
State Farm $64
Progressive $87
American Family $92
GEICO $94
Nationwide $107
Allstate $110
Farmers $112
Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.

Depending on your coverage needs, you may want to opt for a full-coverage policy instead of a minimum liability plan. The full-coverage option includes comprehensive and collision protection, which are not provided by a minimum liability policy.

Cheapest low-down-payment car insurance for full coverage
Company Average monthly rate
State Farm $129
Farmers $134
American Family $153
Progressive $165
Nationwide $196
GEICO $210
Allstate $222
Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.

Worth noting, too, is that none of the companies we included in our study offered auto insurance with no deposit.

Compare quotes from cheap car insurance companies

How to save money on low-down-payment car insurance

Keep in mind that what you pay for car insurance and how much you may save by paying for a policy upfront varies depending on where you live, your age, your gender and other factors. There are also several additional ways you can cut down your insurance costs.

Keep an eye out for discounts

Every major insurer has a list of discounts offered to customers that you may already qualify for. You can receive savings for remaining accident-free, passing a defensive driving course or being a member of an organization, like a college alumni association or a professional group.

Regularly evaluate your coverage needs

Adding more coverage or increasing your liability limit means that you will be spending more on car insurance compared to obtaining the bare minimum protections.

If there have been any major changes in your driving habits, you should reassess your insurance coverage. Those who drive less or have their car in storage can look for alternative coverage options like pay-per-mile insurance or reducing their coverage down to the bare minimum.

Increase your deductible

The cost of your deductible influences your rates and any out-of-pocket costs you have to pay after an accident. A deductible is the amount you need to pay your insurance company before your car insurance takes effect.

Our analysis shows that drivers with a $1,000 deductible pay $53 less each month, on average, than a driver who has a $100 deductible. Generally, the higher your deductible, the lower your regular premium payments.

Pay for a full year of coverage upfront

To get the cheapest low-down payment or low-deposit auto insurance, pay for a full year of coverage upfront. Many insurance providers give you a discounted rate if you pay your entire premium all at once.

Car insurance companies offering discounts for paying in full
Company Offers pay-in-full discount?
Allstate Yes
American Family Yes
Farmers Yes
GEICO No
Nationwide No
Progressive Yes
State Farm No

If you can’t or don’t want to do that, spread your premium payments throughout the year. Most insurers will let you pay for a policy through monthly or semi-annual installments. Even in this case, you may get a discount on your first payment.

Shop and compare multiple insurance companies

The difference between the cheapest and most expensive insurance companies can be up to hundreds or even thousands of dollars annually. That's why it's so important to shop around and receive quotes from multiple companies.

Wondering which option might be best for your specific background and needs? Compare auto insurance quotes from multiple companies. After you input your address, your car make and model, and some other information, you'll get a quote with several payment options.

No-deposit car insurance: FAQs

Can you buy instant auto insurance with no down payment?

The term “no-deposit car insurance” tends to be used by insincere companies marketing free insurance to drivers. Don’t expect to get free car insurance from a legitimate company.

Although a reputable insurer will never offer you free car insurance, that doesn’t mean you can’t get cheap car insurance from them. There are ways to lower car insurance costs or keep them as low as possible. The best way to keep your rates low is to drive safely and maintain a clean driving record.

Why do car insurance companies require down payments?

Insurers require down payments for a few reasons.

  1. A driver who can't even make the first down payment makes companies worry that they may cancel their coverage right before the first bill is due, potentially leaving the driver uninsured and a risk to others.
  2. There is concern that some customers will acquire coverage just to fulfill the minimum requirements for owning a car, only to cancel their policy when they feel they're in the clear.
  3. The initial deposit is meant to cover the administrative costs of registering a new driver.

Your auto insurance premiums are largely determined by a company's assessment of how risky you are to take on. The ideal customer is one who maintains a clean traffic history and can make regular insurance payments. If you meet these criteria, you'll be able to reduce your upfront car insurance payments so that you don't have to pay much for your first deposit.

Methodology

We compared rates from the top three insurance companies in Colorado and found the average savings for a six-month car insurance policy compared to a monthly policy.

The companies listed offer the cheapest low-down-payment car insurance, according to rate data provided by Quadrant Information Services. Our sample driver has a clean driving record and chose the state-minimum amount of liability coverage. 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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