Updated 25 Jan 2024 
5 Minute Read
You might be surprised to learn that it is impossible to get car insurance with no money upfront. Unsurprisingly, it’s for a good reason: car insurance companies don’t want to run the risk of insuring a driver who won’t pay their premiums!
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What is No Down Payment Car Insurance?
No downpayment car insurance means you can buy a full auto-insurance policy without making an immediate, lump-sum payment. Your down payment, sometimes referred to as your deposit, will typically be included in your monthly payments to your car insurer. This way, your fees are made through installments, so it’s easy and affordable.
So, in reality, there isn’t technically a thing such as no down payment car insurance, despite it being a popular (and eye-catching) term used widely in advertisements. It can confuse consumers and lead them to believe they can get a policy without the need for any payment at all.
In virtually all cases, they’ll request you pay for your first month upfront. The catch with no down payment car insurance is that companies will typically add a small additional fee. From there, you will pay your premiums in one of two ways:
- Large annual, semi-annual, or quarterly payments
- A monthly payment plan
Generally speaking, most no-down payment auto insurance policies are paid monthly. While these plans can help with upfront costs, companies typically add a small additional fee for this service.
How to Get the Lowest Down Payment Car Insurance
Now that we know that the downpayment for your auto insurance will be your first month’s payment, a “low down payment” depends on the rate you get from your insurer. The only option you may have to lower your down payment will be if they offer the choice of 30 or 45 days.
Now that we know that the down payment for “no-down payment” auto insurance is just the first month’s payment, it’s time for another bombshell: the more you’re willing to put down upfront, the less your monthly premium will be.
Why Can’t You Buy Car Insurance Without a Deposit?
Auto insurance companies often have multiple payment options for customers. If your auto insurer doesn’t offer an installment plan, contact us to find out if one is available in that area and what they are called (e.g., “installment loan”). The best way to secure car coverage before driving away without protection can be expensive: most agents require at least 10% down.
However, not everyone will find car insurance with a low deposit or an installment plan. This is because insurance companies take the risk of insuring you and your vehicle once the policy begins. Because of this, they want to recover at least some of the cost with your first payment.
This is why newer drivers or those with expensive cars have difficulty finding low down payment auto insurance as they are at higher risk.
If you have a poor credit history or are required to file an SR-22, expect your rates to skyrocket because of those discretionary factors, in addition to other underwriting decisions that may affect how much coverage is available at any given time for people in these situations.
Some states do not allow “no-down payment” car insurance. But, some states offer the opportunity to buy auto insurance coverage with little or no deposit down. These include:
- Arizona
- California
- Florida
- Georgia
- New York
- Oklahoma
- Washington
How Much Does a Car Insurance Down Payment Cost?
There isn’t a one size fits all downpayment when it comes to car insurance. Remember, a down payment isn’t typically an additional premium; it’s a fee built into your insurance rate. So, whatever you pay upfront as a downpayment, will be subtracted from your future payments.
Below are the average Average Expenditures For Auto Insurance, 2010-2019 to give you a rough idea.
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Source: © 2021 National Association of Insurance Commissioners (NAIC)
How to Find the Cheapest Car Insurance
When shopping for car insurance, it can be hard to take the financial hardship of paying upfront out-of-pocket. The costs can also fluctuate due to your:
- Deductibles
- Optional coverages
- Driving record
- Location
- Age
Top 10 Most Expensive And Least Expensive States For Auto Insurance (2019)
| Rank | Most expensive states | Average expenditure | Rank | Least expensive states | Average expenditure |
| 1 | Louisiana | 1,557.22 | 1 | Maine | 696.37 |
| 2 | Michigan | 1,495.94 | 2 | North Dakota | 703/73 |
| 3 | New York | 1,445.30 | 3 | Iowa | 714.86 |
| 4 | District of Columbia | 1,440.58 | 4 | Idaho | 738.10 |
| 5 | Florida | $1,414.17 | 5 | North Carolina | 741.10 |
| 6 | New Jersey | 1,395.53 | 6 | South Dakota | 745.33 |
| 7 | Rhode Island | 1,382.64 | 7 | Wisconsin | 767.42 |
| 8 | Nevada | 1,292.52 | 8 | Wyoming | 776.22 |
| 9 | Delaware | 1,289.93 | 9 | Indiana | 777.05 |
| 10 | Georgia | 1259.49 | 10 | Vermont | 785.37 |
Source: © 2021 National Association of Insurance Commissioners (NAIC)
But you don’t have to go it alone! Contact Coverage Haven today to help you find the best car insurance for your needs and budget.
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Saving Money on your Auto Insurance
Here are some additional tips to lower the cost of your auto insurance payments.
Look for Discounts
Every major auto insurance provider has discounts available to their customers. These savings could be available to you by remaining accident-free, passing an online driving course, or even if you are part of specific organizations like alumni associations or professional groups. They may even give you added discounts when you bundle your insurance.
Get the Exact Coverage Needed
When you add additional coverage or increase your liability limit, you’ll be spending more on monthly insurance premiums. If significant changes to your driving habits allow you to lower your coverage to bare minimum protections, it could result in substantial savings. For example, if you now find yourself working from home more than commuting to work, consider changing to a different type of policy, such as a pay-per-mile plan.
Increase Your Deductible
The cost of your deductible influences what you pay after an accident. A higher-deductible means that the insurance company will cover less, so it can be expensive for them if something happens.
The larger your deductible is, the lower premiums will be for that insurance policy and, in turn, cheaper overall.
It’s important to note that not all companies offer high-deductible plans as they may categorize them differently, leading to confusion. Do your research to understand if this kind of deductible increase is available to you.
Pay for Coverage Upfront
To get the lowest rates, pay for your entire year’s worth of auto insurance in advance. Many providers offer discounts if you do so and can save yourself some money on down payments or deposits! Here are just a few insurance providers that provide these pay in full discounts:
- Allstate
- American Family
- Farmers
- Progressive
If you can’t or don’t want to pay all at once, try making monthly payments. Most insurers will offer discounts on your first payment if it’s made within a certain number of days after purchasing coverage.
Only File Claims if Necessary
A car insurance policy is an investment that doesn’t follow the ‘if you don’t use it, you lose it’ rule. The less you use it, the cheaper the premium will be when renewal time comes around again. Why? After filing a claim with an at-fault driver and causing damages worth more than $50+, most states require insurers to assess rates.
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