Can I get very cheap car insurance with no deposit?

Put simply, you won't be able to get car insurance with no money upfront. The reason for this is simple: car insurance companies won't take on the risk of insuring a driver who hasn't yet begun paying their premiums. Still, your down payment — or deposit as it's sometimes called — is typically included in your monthly payments. Therefore, the cheaper your monthly payments, the cheaper your down payment will be

We'll spend some time looking at the need for insurance deposits and go over some of the best car insurance companies for drivers looking for the lowest monthly payments. 


Car insurance with no down payment — table of contents:
  1. How to get low down payment auto insurance
  2. Why do insurance companies use down payments?
  3. How much does a car insurance down payment cost?
  4. How to save: cheapest car insurance companies
  5. Summary and additional resources
  6. Frequently asked questions




How to get low down payment auto insurance

The down payment for your auto insurance is typically just your first month's payment. This means getting a "low down payment" is contingent upon getting a good rate from your insurer. Essentially, the only choice that you might have in lowering your down payment will depend on whether your insurer offers a choice between paying for the first 30 days or the first 45 days of your policy. Clearly, paying for only 30 days will be the cheaper option. 

In short, it's not possible to find no-down-payment car insurance. Below you'll find more information about insurance down payments along with tips for finding cheap car insurance.



Why do insurance companies use down payments?

While a quick Google search will show options for no deposit car insurance, it’s not really an option. This has to do with the way car insurance companies have designed auto insurance to function. The nature of car coverage — and any form of insurance — is to predict and prepare for risk. An insurance provider's best client is the one that poses the least amount of financial risk.

Auto insurers see a driver who can’t pay a down payment as someone who is only acquiring auto insurance to drive a vehicle off the lot or get their vehicle registered. They may only wants to secure instant car insurance to avoid registration penalties or to satisfy a car dealership’s requirements. A customer like this raises a red flag to insurance companies, as they may cost auto them more in the long run. Furthermore, an insurer might worry that such clients would simply cancel the policy after a short time, making them a considerable risk.

Your initial down payment or deposit helps to cover the onboarding costs associated with a new client. An insurer dedicates resources to running your full driving report — not free for car insurance companies — and to other first-time administrative processes that wouldn't be covered by a zero-down payment car insurance policy. While they may be referred to as a "deposit," customers typically won't ultimately get this money back as it is applied to the overall premium. 



How much does a car insurance down payment cost?

It’s important to consider that a down payment usually isn’t an additional premium — it’s built into your rate. This means whatever you pay as a down payment will be deducted from future monthly payments.

Below, we have a six-month car insurance premium which costs $600. If you pay $0 upfront, your monthly premium payments going forward will be $100. Some insurance providers will require 30 to 45 days of premium in order to activate your insurance policy.


Down Payment AmountMonthly Installments
10% or $60$90 monthly premium
20% or $120$80 monthly premium
30% or $180$70 monthly premium


The larger the down payment you make upfront, the less your premium will cost on a monthly payment plan. You shouldn’t think of your down payment as an additional fee or a deposit, but as a part of your premium going forward.

The exact lump sum you’ll be asked to provide for your down payment may vary according to your payment plan, so it’s hard to give an exact estimate. Some car insurance providers will allow you to choose from a range of down payment amounts.




How to cut costs on car insurance

Although you might understand the necessity of remitting a down payment, that doesn’t make the financial hardship any easier to bear. So, let’s get into some other ways to save on car insurance, starting with the cheapest car insurance companies.


Find the cheapest auto insurance company for you

While it’s hard to provide a precise car insurance quote without a driver's personal information, we used a general profile and discovered USAA was the cheapest car insurance company, with GEICO coming in second, with all other metrics constant.


Liberty Mutual$863
State Farm$647


Consider, however, that this data doesn't necessarily reflect your unique driving profile. Individual rating factors, such as your vehicle, driving history, and credit score, aren’t represented here. Use this data as a jumping-off point in your search for cheap car insurance, and get free quotes online.


Compare car insurance options and find the right policy for you.

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File claims wisely

The phrase, “use it or lose it” doesn't apply to car insurance. In fact, the less you use your auto insurance policy, the cheaper it gets. This is because of the way car insurers assess premiums after you file a claim. While the amount of the increase depends on the value of the claim, your state, and your insurance provider, below are the average expected premium increases over a three-year period.


Increase at 6 MonthsIncrease at 12 MonthsIncrease at 3 Years


The above shows the cost of the claim over a three-year period, as that’s how long most insurance companies will penalize you for most violations and at-fault accidents.

At times, you'll need to use your car insurance. For example, if you’re at-fault for an accident and the other party does not want to handle things without insurance. In this situation, you're obligated to give your insurance information to the not-at-fault party. Another reason might be if the damage is greater than the premium increase you would receive. This can be difficult to calculate — here are some tips to get started.

  • Get an estimate for the cost of repairs at a mechanic.
  • Use our State of Insurance data to see the average rate increase for your state. Again, consider this staying on your insurance premium for three years.
  • If it’s cheaper to pay for the damage out-of-pocket, do that.

See more information on when to file a claim.


Choose the correct coverage

Evaluate your car insurance coverage as your vehicle ages. As time passes, you might be paying for insurance coverage that your vehicle’s age and value don’t merit. A general rule of thumb for car insurance: if your vehicle is worth less than $4,000, you probably don’t need collision and comprehensive insurance coverage. These coverages, also known as physical coverage, are designed to protect your vehicle. But if your vehicle isn’t worth much, you might be paying for auto insurance coverage you don't need.


Coverage LevelAverage 6-Month Car Insurance RateMonthly Rate
$500 deductible$774$129
$1,000 deductible$686$114


On average, physical coverage makes up about half of your premium amount. If, however, your vehicle is worth more than $4,000, consider raising your deductibles. As you can see, if you raise your deductible, you lower your car insurance rates.


Find insurance discounts

Most insurance companies follow the same sort of discounts and many times they are automatically added to your policy. But just in case, here are some standard discounts you can qualify for. While they might not make a huge financial impact individually, they can add up to help you save money on your annual premium.

Learn more about popular car insurance discounts.



No down payment car insurance: highlights and additional information

No standard car insurance company will advertise “no deposit auto insurance." In the eyes of an insurer, zero-down payment policies are risky and attract high-risk drivers. Still, there are other ways to save. While avoiding claims and choosing the right coverage for your vehicle are great ways to start, the best way to find affordable car insurance is to shop as many options as possible. 


Compare auto insurance quotes and find the policy that fits you.

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Additional resources

If you’re looking for more information on car insurance and ways to save, see our other resources:




The auto insurance rates displayed in our articles are based on the results of The Zebra’s comprehensive car insurance pricing analysis. In our analysis of all U.S. zip codes — including Washington D.C. Our user profile consisted of a 30-year-old single male driving a 2013 Honda Accord. To generate pricing specific to particular rating factors, we altered the driving profile based on the common pricing factors utilized by top car insurance companies. These factors include, but are not limited to, credit score, coverage level, and driving record.

National property and casualty losses information is from the Insurance Information Institute and the NOAA National Centers for Environmental Information U.S. Billion-Dollar Weather and Climate Disasters report.


Auto insurance with no down payment — FAQs

Can I get very cheap car insurance without a down payment?

It's not likely. Paying upfront for car insurance is almost always required, even if it is just the first month's premium. 

What is a down payment for car insurance?

A down payment for auto insurance is what you pay upfront for your policy. This is not an additional premium; your deposit is built into your rate. So the amount you paid for your down payment is deducted from your future monthly premiums.

Do all car insurance companies require a down payment?

It might be possible to find an insurance company that does not require you to make a down payment or deposit. However, they may not be the type of company that you want to do business with, as they are not likely to be as financially stable as other insurers. Most standard or preferred insurers require that customers put some money down before their policy is active.

Which auto insurance companies don't require a down payment or deposit?

Non-standard insurance companies are more likely to require no money down for a policy, but that is not guaranteed. To an insurer, a person who can not or will not pay a down payment for a policy is seen as risky to insure. Non-standard companies specialize in insuring high-risk drivers and might be more accommodating of customers who can't pay upfront.

Ross Martin LinkedIn

As a licensed insurance agent, Ross is responsible for researching and writing about all matters related to insurance. He has a background in writing and education, as well as a master's degree from Royal Holloway, University of London. He has been quoted by CNET, and Kin Insurance.