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Consumers looking to save money and find coverage that fits their budget should check out very cheap car insurance with no deposit. While finding cheap auto insurance in every state is possible, the term “no deposit auto insurance” is not a standard phrase used by insurers or agents.
It’s generally referred to as policies that does not demand an initial deposit when applying for coverage. These policies don’t cost much more, but not all insurers offer them. These policies are also not allowed in most states, and only seven states currently allow auto insurance coverage with no deposit required.
It’s also important to note that many people mistakenly think that they will be getting free car insurance for a month with this type of no deposit coverage. Simply put, there’s no such thing as free auto insurance for a week or two or more months.
The term very cheap car insurance with no deposit often means a “bare bones” policy, often state minimum liability only coverage with the deposit waived. The first installment payment made on the policy will be considered the down payment.
So, while there is no deposit put down, a payment still needs to be made before the policy becomes valid and in effect. Get a free online quote to compare the best rates and the lowest deposit requirements where you live. Just enter your zip code and fill out a simple five-minute quote application to get started.
Cheap Auto Insurance Policies that do not Require a Deposit
The deposit required to secure coverage will depend on many factors, including:
- The Insurance Company
- The Age and Gender of the Driver
- The Automobile and whether it is owned, financed, or leased
- How Many Miles you Drive Each Month
- Driving record and how long a person has been driving
- Credit Rating
- Homeowner or Renter
A deposit in select states and from various carriers could be anywhere from zero down to 33% of the yearly premium. Your down payment should be much lower than your monthly premium if you have a good driving record and a used car. Usually, it’s anywhere from $20 to $50.
Insurance rates are about pricing in a particular driver’s potential risk. In general, the safer your driving record is over a three-year period, the less down payment you will need to put down. Other important factors, like the monthly miles driven and the type of automobile driven, will significantly impact rates and the deposit amount required.
Higher-risk drivers who have serious driving convictions, like a DUI or multiple at-fault convictions on their record, will be required to put down a higher deposit, and the overall premium will cost more. Some insurers do not take drivers who have a DUI conviction or multiple reckless driving tickets.
The Car you Drive Impacts the Insurance Deposit Required
It’s essential to think about your next vehicle purchase and how it relates to insurance rates. Expensive newer cars that cost over $20,000 will almost always have a higher deposit because the overall premium will be greater.
Also, financed and leased vehicles will almost always require comprehensive coverage, which is more expensive and requires a larger deposit amount in most cases. Therefore, if you are looking for very cheap car insurance with no deposit coverage, you should get a used vehicle that is not financed. Then you can choose a state minimum liability-only policy with a low and even a zero deposit requirement.
There are still great deals out there, and all it takes is some diligence and quote comparison research. Start your online quote by entering your zip code to get the cheapest insurance where you live.
Applying for No Deposit Auto Insurance
You will need to make monthly payments if you are like many consumers and can’t afford to pay for the entire premium amount upfront. The good news is almost all insurers have convenient monthly payment programs.
When you apply for a quote, you are then given a chance to select a payment option. You can pay in full, quarterly, or month to month. You will also be quoted the Deposit Amount – if any Monthly Premium Payment Amount is not paid off.
Using a 2012 Honda Accord as an example, Progressive Insurance provided a low deposit amount of $5. The first monthly payment totaled $109, and the total premium payoff amount quoted was $1,232. Note how small the deposit was, of just $5. Almost anyone can afford this amount, and it makes securing coverage easy for those low on funds.
Once you go through your quote and decide on a payment option, you can instantly purchase your policy. You can even use your smartphone through the entire process and print out your I.D. cars in a matter of minutes. If you choose an installment plan, set up automatic payments to never miss paying your bill. Some insurers offer a small 2% discount just for setting up automatic payments.
Advantages to Low Deposit Car Insurance
There are several reasons to consider car insurance with low down payments. In some instances, you might be in a financial crunch and low on money. In this case, getting the cheapest coverage with zero down might be the only option. Here are a few reasons why these plans are so popular:
- Securing Coverage at no or little cost
- Offers Monthly Premiums at no additional cost
- Ability to Add Additional Coverage or Cancel the Plan at Anytime
- Automatic Payments Using a Credit Card or Bank Debit
Disadvantages of Low Deposit Auto Insurance
There are not too many negatives about buying no deposit car insurance. It would help if you realized that not all insurers offer these deals, and the premiums may be a bit higher. Also, not paying for your premium in full will almost always cost you a little more. For the cheapest plan, pay for an entire year of coverage in one payment.
Who Can Qualify for Very Cheap Car Insurance No Deposit?
The less of a risk you pose to an insurer, the more likely you will qualify for coverage with zero down. This means no prior at-fault accidents and no outstanding tickets. Also, credit is more of a factor than you might realize. If someone has a good score, they are more likely to pay their insurance premium on time each month. It’s also why insurance companies give these customers better rates.
If you meet specific basic requirements, you can get cheap car insurance with the first month free. Each insurer has different pricing metrics, and you might get covered for just $20 down or pay up to 25% or more of the premium. Remember, low-risk drivers will get the best deals, including a lower deposit.
What If you Don’t Qualify for No Deposit Auto Insurance?
While it might be hard to find a low deposit from $5 to $20, there are still steps you can take to get cheaper coverage. If you’re tight on cash but need car insurance today, you still have some solid options. This includes:
- After you have applied for 10 or more quotes, compare the cheapest first installment payment. This installment will be a small deposit plus your monthly premium amount.
- Consider buying the state minimum liability insurance where you live and minimize add-ons. This determination will lower your deposit and monthly payments.
- Choose a Higher Deductible
- Fix the issues that resulted in you paying more for coverage. For example, work to get it cleared up if you have bad credit or tickets.
Cheapest Policies for High-Risk Drivers
Finding cheap car insurance can be frustrating if you are classified as a high-risk motorist. Insurers make a profit by not paying out claims, and the riskier a driver is, the more likely they will get into an accident. This is the reason why down payments and premiums are so high for these types of drivers.
Getting a DUI, an at-fault accident, reckless driving, or having terrible credit can all send premiums up 50% and more. If you fall into this category, get as many quotes as possible, and choose the lowest deposit. Also, get the basic coverage that is less costly. There are companies like The General that have low rates for higher-risk motorists.
States that offer No Deposit Auto Insurance Policies
Most states don’t allow auto insurance policies with no down payment, and seven states allow these policies, including the most populous state in the U.S., California.
- New York
Where to Buy Very Cheap Car Insurance No Deposit
The internet has revolutionized just about every industry, including insurance. It has really shifted the power to the consumer and allowed quote comparison-shopping fast and effortless. You can compare multiple plans online and review the deposit requirements between each insurer.
If you are in a cash crunch, you can get insured with a company that offers first-month free car insurance with no down payment. The premium might be a little higher than other competitors with a low-down payment policy. However, it will allow you to get coverage for as little down as possible, which is the most important thing if someone is low on cash.
Other carriers might have cheaper monthly rates but require more of a deposit. The best way to find a plan that works for you is to compare 10 or more quotes. You can do this in a matter of minutes using quote tools that search rates from dozens of providers. Here are a few carriers that offer very cheap auto insurance with nothing down.
- Kemper Direct
- Farm Bureau
- American Family
- State Farm
If you need instant coverage but have little or no cash, then look for very cheap car insurance with no deposit online. While you might have to compare several quotes from different companies, don’t give up until you find the most affordable plan and a low or even no deposit requirement.