When purchasing an auto insurance policy, you typically have the option to pay either in monthly premiums or lump-sum installments. Drivers who can afford to pay down a large lump sum at the beginning of the policy will save money on the total cost of their policy.
Those who purchase car insurance with no money down will establish coverage for a lower price, but they'll pay more over the life of the policy. Regardless of the payment method, however, all drivers will still need to pay at least some amount up front — either the monthly premium or some other lump-sum.
To be clear, reputable car insurance companies will never offer free coverage instantly. You will always be required to pay something before your car insurance policy goes into effect.
Drivers can find cheap car insurance coverage by comparing quotes from several insurers.
What is no down payment car insurance?
No down payment car insurance is an auto insurance policy that requires only the first month's premium in order to initiate your policy's term.
You can pay your car insurance premiums in one of two ways:
- Large annual, semi-annual or quarterly payments
- A monthly payment plan
While companies may advertise cheap car insurance with no down payment, you shouldn't be misled into believing you can obtain insurance without paying any money upfront. Insurers will not offer free coverage instantly.
- "No down payment" simply implies that you won't be required to pay for more than the first month of coverage to obtain insurance coverage and start your policy.
- Those who can afford to pay for more of their insurance policy upfront will enjoy a lower total policy price, with the highest savings going to those who pay for the entire policy in one installment.
Though a monthly payment plan may work best for your financial situation, it's important to remember that this is the more expensive option over the length of the policy.
For example, we obtained a Geico quote for six-month insurance policy. Here is the price difference our driver would see if he chose to pay for the full six months at once instead of making monthly payments:
|Monthly premium (x5)||$129||$0|
This policy covers a 30-year-old male driving a 2010 Toyota Camry in Florida.
Our driver elected:
- $25,000/$50,000/$25,000 liability insurance
- $10,000 of PIP coverage with a $1,000 deductible
- Comprehensive coverage with a $500 deductible
- Collision coverage with a $500 deductible
The savings you would see would depend on your credit and driving history, your ZIP code, the car you're insuring, the length of your policy, and the installment plan you choose. However, it is not unusual for drivers to save 5%–10% on a one-year policy if they pay the premiums upfront.
Who can buy car insurance with no money down?
Most auto insurance companies provide multiple options for payment plans. If they don't advertise the installment plan you're looking for, ask your agent if such an option exists.
However, not all drivers will be able to obtain car insurance with no or low deposit required. Insurance companies take on the risk of insuring you and your vehicle as soon as your policy begins. Because of this, they want to recuperate at least some of that risk with your initial payment.
Owners of newer, more expensive cars may have a harder time finding low down payment insurance, since their vehicles present increased risk to their insurer.
Additionally, drivers with a poor credit history, or those who are required to file an SR-22, will be required to pay more of their total premium up front. On the other hand, if your car is older and less expensive to insure, your insurance provider might offer a zero down payment option.
States where no down payment car insurance is available
No down payment car insurance is not available in every state. States that do allow you to buy auto insurance coverage with little to zero money down include:
- New York
Where can I find cheap car insurance?
Regardless of whether no down payment auto insurance is available in your state, you'll find the cheapest car insurance rates by comparing prices from a few different car insurance companies.
Factors that will affect your premiums include your:
- Policy limits
- Optional coverages
- Driving record
You should get online quotes from at least three different car insurance companies to find cheap rates for a policy with your preferred payment plan.
Affordable auto insurance companies
Here are car insurance quotes for a sample driver's 6-month minimum coverage policy, listed from cheapest to most expensive. While finding no or low down payment car insurance can be challenging, you may be able to find savings for a policy from one of these insurance companies.
Click on a company name to read our full review.
Your own car insurance quotes will differ depending on your unique driver profile and circumstances.
*Insurers with an asterisk offered quotes in at least 20 states. Quotes were for a single 30-year-old male driving a 2015 Honda Civic EX.
ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.