Low deposit car insurance
No one wants to be stumped with high upfront costs on their car insurance, but is it always worth finding a policy with a low deposit?
What is low deposit car insurance?
Low deposit car insurance refers to any insurance policy that requires a small initial payment, as opposed to paying the total cost of your annual premium upfront.
When you take out car insurance, you’re generally given the choice of monthly premium payments or a single annual premium payment. If you choose to make monthly payments, you’ll still need to pay your first premium upfront and may also be charged a deposit, which will be a percentage of the total annual cost of the policy.
How cheap is low deposit car insurance?
While it may be tempting to opt for car insurance with lower upfront costs, you’re likely to save money by paying your premium on an annual basis. Insurers often charge interest on monthly premiums, which means you’ll end up paying more over the course of a year. While paying monthly will make the initial cost of car insurance cheaper, you likely won’t save money by opting for a low deposit, month-by-month policy.
Of course, monthly premiums may make it easier for you to manage the cost of your car insurance and this is something that may outweigh any additional interest costs. Some insurers also offer monthly premiums with no interest, so you can avoid high upfront costs without having to pay more for cover.
It’s always worth comparing multiple policies and insurance providers so you can find the policy that best suits your financial situation.
Who offers low deposit car insurance?
Most insurers will give you the option of monthly or annual premiums, which means you can avoid paying lots upfront. If you can find an insurance provider offering monthly premiums with no interest charges, you’ll get the benefit of more manageable premium payments without having to pay more. You can compare a range of car insurance quotes from leading insurers now by clicking the green button below.
What are my other options?
If you’re looking to get car insurance with cheaper upfront costs, you could consider the following:
- Pay-as-you-go car insurance. With pay-as-you-go policies, you pay for cover based on how much you drive. You’ll still need to pay an initial deposit or premium, but this will likely be lower than the upfront cost of regular car insurance.
- Temporary car insurance. If you only need cover for a short period, you could take out temporary insurance for as little as 1 hour up to 28 days. As your policy will only cover you for a limited time, there’ll be no additional upfront costs or deposits.
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