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How can I get no-deposit car insurance?

The term is misleading for one main reason: it doesn’t exist. But you can get coverage with a low deposit.

No-deposit car insurance is a misleading term for one main reason: it doesn’t exist. But you can get coverage with a low first payment. Car insurance is a legal contract that requires you to pay upfront before the policy can protect you. If you see an insurer advertising no deposit, they mean that you won’t be paying more than the first month’s premium to activate your coverage. But the word deposit is misleading too since you won’t get your money back when your term ends.

3 ways to get car insurance with a low deposit

When you purchase a car insurance policy, you can pay in installments to split the cost across 12 monthly payments. The initial deposit of money is more expensive if you’re paying your premium in full or if your insurer charges an extra fee to get your policy started.

If you want to lower your upfront payment, you have three options.

  1. Opt for a monthly payment plan. By choosing to pay in installments, you only pay the first month’s premium to initiate your policy. Any deposit or administrative fees are built in to that first payment, costing only a few dollars. According to our research, for example, Progressive charges a $4 deposit. Geico’s was a little higher at $5.
  2. Go for pay-per-mile insurance. If you sign up for pay-per-mile insurance, you simply pay the first month’s base rate. This acts as your security deposit. At the end of the monthly billing cycle, you’ll pay the next month’s base rate, plus the cost of any miles you drove over the previous month. The base rate varies between providers and policies.
  3. Look for providers offering a lower first month’s payment. From time to time, insurers will slash the cost of coverage for the first month, usually rewarding safe drivers. However, no reputable insurer issues a policy without some payment up front.

    How to compare car insurance with low deposits

    If you have good credit and a strong driving history, or if you drive an older or less expensive car, you can probably buy a policy with a low deposit. On the other hand, if you have poor credit or blemishes on your driving record, you may face a higher upfront payment.

    1. Compare quotes. Premiums vary between companies, so compare several insurers by entering the same coverage and driving details to find the lowest monthly payment.
    2. Balance quotes with extra features. Once you find companies with the lowest down payment, look at the coverage, customer service and free perks that your top options offer. This helps you get the best deal possible, despite low monthly payments.
    3. Apply for your policy. When you find an insurer that balances all the benefits you need, you can contact the company or start your application online. Enter details about your driving record, your car and how you drive to finalize your quote.
    4. Consider your payment options. While monthly installments make paying for insurance manageable, most insurers charge an installment fee, typically a few dollars per month. If you pay upfront or choose a payment plan with fewer than 12 installments, you can save up to 10% on your insurance.
    5. Make your first payment. Enter your payment information to secure your policy. Once your insurer approves it, you’ll receive a confirmation and your coverage will come into effect on the date you specified.

    Compare car insurance with low payments

    Compare car insurance companies and their policy features, then tap Get quotes to see the costs customized to your needs.

    Name Product Gap insurance Homeowner discount Telematics Has an app? Available states
    All 50 states
    Your dedicated agent can help you find the best savings with multiple discounts and rewards programs.

    Speak to an agent: 877-526-1527

    loan/lease coverage
    All 50 states & DC
    Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
    Depends on provider
    All 50 states
    Get your most compatible insurance options via a "smart matching" method aimed at finding you value.
    Telematics only
    Available in 31 states
    Track your driving to receive a low rate that reflects your driving skills, and enjoy a fully app-based policy experience.
    The AARP Auto Insurance Program from the Hartford
    All 50 states
    Enjoy low rates for mature drivers, plus perks like new car replacement and lifetime repair guarantees. Only for drivers over age 50.
    All 50 states & DC
    Affordable car insurance with highly rated customer service. Only available to military members and veterans and their family.

    Compare up to 4 providers

    Ways to lower your monthly payments

    Searching for the cheapest possible coverage? These strategies help you to save on your insurance.

    • Compare rates by total annual cost. Don’t just look at the deposit amount. Assess the annual rate so you know exactly how much money you’ll be forking over.
    • Watch out for deals that seem too good to be true. For example, some of the first month free deals actually split the cost of all 12 months across your policy premiums, so you end up paying for that first month in small increments throughout the year.
    • Change to annual payments. When you can afford to pay upfront, opt out of the monthly payment plan. You’ll save more over the life of the policy.
    • Sharpen your safe driving skills. Sign up for a defensive driving course to score a safe driver discount and try to keep tickets and claims to a minimum. Improving your driving record could also make it easier to qualify for a lower deposit the next time you switch.
    • Look into a black box policy. A telematics device or driving app like Progressive’s Snapshot records your speed and distance traveled and monitors braking and cornering. If you’re a good driver, you’ll typically earn a discount.
    • Explore other discounts. Ask your insurer about discounts for going paperless, taking out multiple policies and paying by automatic bank transfer. Combine these with safety, defensive driving and anti-theft discounts and you could save up to 30% to 50% if you qualify.
    • Shop around for a better rate. Switch car insurers or compare quotes every year, especially if you got married, moved or experienced another big life change.

    Bottom line

    No-deposit insurance doesn’t exist, and for good reason. Insurers use down payments to cover onboarding costs and to make sure you’re not going to cancel your coverage right away. However, low deposit insurance is a thing, and you can often find it if you’re a good driver with a good credit history.

    There are other ways to save, like looking for discounts and only paying for the coverage you need. To score the best rate, be sure to compare car insurance quotes.

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