If you’ve ever signed an auto insurance policy and decided to make monthly payments instead of paying in full, you’ve most likely been asked to pay a car insurance down payment. Like most people, you probably paid it because you needed the insurance coverage but were left wondering, “Why can’t I get no deposit and no down payment car insurance?”

Wonder no more.

We have covered the behind-the-scenes details so you know precisely what that insurance down payment is, whether you can get auto insurance with no down payment and some expert tips on making your car insurance more affordable.

Below are the key highlight on car insurance down payments:

Key Highlights
  • If you decide to pay your premium in installments, the insurance company will require you to pay at least one month’s premium as a deposit or down payment.
  • You cannot get car insurance without paying the deposit/down payment. Either you pay a one-month installment in advance or pay for the entire year; still, you will have to pay the down payment.
  • If your national average for car insurance is $146 per month or $1,758 per year for full coverage, then at the time of signing the policy, your deposit would be $146.
  • Factors like driving record, age, gender, location, vehicle type, and credit score help determine your deposit amount or down payment.
  • Shop around, ask for discounts, improve your credit score and reassess your coverage to get cheap car insurance down payment.

What is no down payment car insurance?

Some insurers call it a down payment, while some call it a deposit. Regardless of what it is called, if you choose to pay your premium in installments instead of up-front and full, your insurer will likely ask you to pay at least one month’s payment when you sign the policy. This is a down payment or deposit and is standard in the world of car insurance.

It may be easier to think of the down payment as a prepayment of part of your premium. This allows the insurer to activate your policy for a one-month installment instead of requiring you to pay the entire annual premium up-front.

Expert Tip: If you can afford to pay the full premium up-front, you will save money over the year by avoiding installment fees and possibly getting a discount for paying in full. That is money back in your pocket!

How do I pay car insurance down payment?

If your insurance agency accepts premium payments via credit card, debit card, check, or electronic funds transfer, they will take your down payment using one of those methods, too.

If you intend to pay this first month’s payment or down payment using a different method than the rest, be sure to speak with your insurance agent about that beforehand.

Expert Tip: Most insurance companies offer discounts if you set up automatic electronic payments.

Can I buy instant car insurance with no deposit?

The quick answer is no. Whether you pay an installment of one month in advance or the entire year at one time, you are still paying a deposit or down payment. There is no such thing as no down payment car insurance.

If you see an insurance company advertising “no deposit car insurance,” be cautious in the proceeding and ask many questions. It is highly untypical for insurers with no down payment not to require either one month’s installment as a down payment or the entire premium upfront. You simply can’t get a car insurance policy without paying any money.

How much is car insurance with no money down?

For many insurers, the down payment is simply one month’s payment amount. For example, for a driver with good credit and a clean record, the national average for car insurance is $146 per month or $1,758 per year for full coverage. In that case, your deposit would be $146 at the policy signing.

Deposits are often determined by rate, and the rate is determined after the evaluation of several factors. Some of those factors are driving record, age, gender, location, vehicle type, and credit score.

However, the deposit amount required depends on the insurance company’s policies and may not always be equivalent to one month’s installment of your premium. When shopping around for car insurance, if you want to be on the ball, ask them about down payment requirements and discounts offered for an annual payment in full.

How can I get cheap car insurance without a deposit?

Car insurance can get a bit heavy on the budget between the down payment, the monthly payment and sometimes installment fees. But there are several things you can do to get cheaper car insurance and, therefore, a cheaper down payment.

Here are a few ways our experts recommend you can save:

  • Ask your insurer about discounts you may qualify for but aren’t currently receiving.
  • Increase your deductible to lower your premium. This is only a good idea if you can afford to pay the increased deductible if needed.
  • Shop around. It is easy to get with one company and never reevaluate, but it is wise to periodically shop around to ensure you’re getting the best rate.
  • Reassess your coverage. Depending on what you’re driving and what your financial situation is like, you may have more coverage than you need. Ask your insurance agent to work with you to reassess your coverage.
  • Keep a clean driving record. Continue improving your credit score and maintaining a clean driving record.
  • Consider a usage-based plan. This can be a good option for people who infrequently drive for a low amount of miles and want to save money on car insurance. A usage-based plan is also great for people who want rewards for good driving habits.
  • Go for the minimums. Though this approach is highly discouraged in most circumstances, there may be times when lowering coverage to your state’s required minimum liability is your best option. It is essential to remember that liability insurance does not cover your own injuries or damage to your property, which can lead to significant financial hardship. Be sure to speak with your insurance agent about other ways you may be able to save money and keep comprehensive and collision coverage, too.

 — Ashlee Tilford contributed to this story.

Laura Longero

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Laura Longero

Executive Editor

Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.

John McCormick

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John McCormick

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John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.

Leslie Kasperowicz

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Leslie Kasperowicz

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Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.

Nupur Gambhir

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Nupur Gambhir

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Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.

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Contributing Writer

Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions. When not writing, you can find her reading a book or watching anime.