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How to Get Very Cheap Car Insurance With No Deposit

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The average cost of car insurance in the U.S. hovers around $2,646 annually, or $220 per month. If you are not flush with cash, paying for car insurance can be a struggle. That's why it's so important to know where to find cheap car insurance that does not require a deposit. To help you get a better sense of your options, we've broken down what you need to know about low-premium, no-deposit auto insurance.

What is no deposit car insurance?

First things first: There is no such thing as "car insurance with no deposit" or low down payment car insurance. Despite how often the terms are used as advertising tools, they are misleading.

Based on the name, it's easy to believe that no-deposit car insurance is insurance coverage provided by an insurer without any money trading hands.

This definition of cheap car insurance with no deposit is wrong.

When you hear the term "no-deposit car insurance," it actually refers to a policy that allows you to make a monthly payment as opposed to paying in one lump sum. There is no "deposit" because the first monthly premium covers your first month of the insurance plan.

Options for low down payment car insurance

While some may advertise cheap auto insurance with no money down, what they mean is that you don't have to come up with anything other than your first month insurance premium. Every car insurance company requires you to pay something upfront to begin a car insurance policy.

Premiums can be paid in one of four ways: monthly, quarterly, semi-annually, or annually. If you're hoping to pay the least amount possible upfront, your best bet is to opt for a monthly installment plan.

How can you get very cheap car insurance with no down payment?

It works like this:

  • You contact a car insurance company for an insurance quote.
  • The insurance provider looks at things like your age, sex, credit score, and driving history. Based on what they find, they quote you the rate for an annual premium.
  • You compare auto insurance quotes for as many insurers as you like and focus on the car insurance provider that offers the cheapest auto insurance.
  • Once you've homed in on one auto insurance company, you ask about ways to land the most affordable car insurance rate (more on this point in a moment).
  • Because you do not want to make a large lump-sum payment, you make sure the company with the lowest auto insurance quote also offers a monthly payment plan.
  • You find out how much that monthly payment will be and double-check to make sure it fits your monthly budget.
  • If you desire more than minimum coverage, you ask about how much more it will cost to add on extras (like uninsured motorist coverage or roadside service).
  • Once you discover the level of coverage you're comfortable with and can afford, you make an initial payment. Remember, this payment provides your first month of auto insurance coverage.
  • You sign up to have payments taken directly from a credit card, debit card, or your bank account, so you never have to worry about missing an insurance premium payment.
  • As your financial situation changes, you may find that you can afford a greater level of car insurance coverage. You are free to make upgrades to your policy as you are able.

Ways to get cheap car insurance

Now that we've established that the best way to avoid a large upfront payment is to rate shop and opt for monthly payments, you'll want to know some of the tricks for keeping your auto insurance rate low.

Carry liability-only car insurance

If you drive a car that's not worth much, you can save a great deal of money by carrying liability-only car insurance. That means that if you cause an accident, your insurance company will cover the cost of repairing or replacing the other driver's vehicle.

Buy a car that's cheap to insure

According to a study by The Ascent, nine out of 10 of the cheapest cars to insure are SUVs, due primarily to the safety features built into these models. Make sure any car you buy is on the "cheap to insure" list.

Avoid theft-magnets

The Ford F-Series truck has been the best-selling vehicle in the U.S. for more than 40 years. It is also the most stolen vehicle. Before you buy a new car, check online to see how often that particular vehicle gets nicked. Avoiding theft-magnets is one of the easiest ways to snag a cheap insurance policy.

Steer away from high-priced cars

You may have dreamed of driving a Mercedes when you were a kid, but the more expensive a vehicle is, the more expensive it is to insure. You don't have to give up on the dream, but perhaps you can postpone it until you can swing the higher cost of insurance.

Don't be tempted by a muscle car

Unless you're driving a Ford Mustang GT (one of the cheapest sports cars to insure due to the Insurance Institute for Highway Safety (IIHS) safety ratings), muscle cars tend to come with high insurance rates. That's because car insurance companies worry that people who own powerful vehicles tend to drive them fast and get into more accidents than the average car owner.

Ask about discounts

When you ask for a car insurance quote, find out what kind of discounts the company offers. There may be insurance discounts tied to your driving record, profession, or whether you intend to bundle your auto insurance policy with other types of insurance coverage, like homeowners.

Even though there is no such thing as very cheap car insurance with no deposit, you still have options. The trick is to shop around for an insurer that offers the coverage you need with a monthly premium you can afford.


  • No. Despite the fact that some insurance companies advertise very cheap car insurance with no deposit, what they mean is that they allow customers to pay their insurance premium through a monthly payment plan.

  • Geico offers the best rock-bottom prices. It also offers a monthly payment plan that allows customers to get started by paying one month's premium.

  • Even if you've been with the same insurer for a long time, compare rates. It's possible that another auto insurance company offers a cheaper rate. You can also look into changing your level of coverage, lowering it until you can afford an increase. Finally, find out how much raising your deductible will lower your monthly rate.

  • There is no period of time you can go without auto insurance. If you're caught, you can expect to have your car impounded and to pay expensive fees to have it released from impound. You'll also get a ticket, have to pay a fine, and may even go to jail.

  • Yes, driving without insurance is illegal in every state except New Hampshire and Virginia. If you chose to drive without insurance in New Hampshire, you must post a cash bond first. In Virginia, you must pay an uninsured motor vehicle fee to the state before driving without insurance.

    RELATED: Need homeowners insurance? Check out The Ascent's guide to the best cheap New Hampshire auto insurance.

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