Can You Get No Down Payment Car Insurance?
Most insurance companies require at least a one-month payment to start a policy. However, some companies, such as Ocho, offer financing that lets you start your coverage without a payment.
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How to get very cheap car insurance with no deposit
- Look into financing. Certain companies, such as Ocho, offer premium financing that allows you to start a policy without having to pay anything. Just make sure you read the fine print and you understand the payment schedule plus any fees.
- Pay with a credit card. Car insurance companies almost always need you to pay something to start your car insurance coverage, but if you put the payment on a credit card, it buys you some time to pay it off. Just remember to pay the card in full when it's due so you don't get hit with interest.
- Shop around. Comparing quotes from different companies lets you find the cheapest policy for your needs. The cheaper your overall rate, the lower your down payment will be.
On this page
In insurance, a down payment and a deposit are the same thing: your first insurance payment. This is typically at least a one-month payment.
Unlike some deposits, like for a rented house or apartment, you don't get your insurance deposit back. It goes toward paying for the first month of your coverage.
Can you get no-down payment car insurance?
You usually can't get car insurance with down payment, but most companies offer multiple payment options.
That's because car insurance policies are legal contracts. The insurance company agrees to provide coverage only if you make a payment. This is called "consideration." If you don’t make a payment, you aren’t holding up your end of the contract, which means the insurance company doesn’t have to provide coverage.
Your best option is to get a low down payment. Shop around for a cheap car insurance policy and pay monthly. You'll usually need to make a one-month payment to get your policy started.
Just remember, the more expensive your policy is, the more you'll have to put down. A one-month payment is likely going to be cheaper if you have a clean driving record and good credit. You'll also pay less if you choose lower coverage limits and skip full coverage, which isn't an option if you have a loan or lease on your car.
Low down payment car insurance is good if money is tight right now or if you want to pay the same amount each month. But if you put more money down when signing up, you could lower your total bill. Most companies offer a discount for paying annually or twice per year.
Premium financing
Some insurance agencies, such as Ocho, offer zero-down car insurance through loans.
Essentially, Ocho pays your car insurance rate for you and then you pay Ocho back based on the terms of the loan.
These arrangements can be good if you have no money to get a policy started. But you should always read the terms and understand what you're getting into. For example, you may have to pay interest on top of your rate each month, along with other fees. And if you can't pay back the loan, your car insurance policy will be cancelled.
How much is a car insurance down payment?
On average, you'll need to pay between $76 and $208 for a car insurance down payment.
That's because a down payment is usually a one-month payment. If you have full coverage, a one-month deposit is $208 per month, on average. If you don't have a loan or lease on your car and you buy state minimum coverage, you could pay an average $76 for a down payment.
Cheapest car insurance companies with low upfront costs
Auto-Owners, Travelers and Geico often have cheap car insurance policies, which means they have cheap down payments.
Regional companies such as Erie and American Family also often have cheap rates. The cheapest company for you depends on the amount of coverage you need.
Cheapest full coverage car insurance companies with low down payments
Auto-Owners and Travelers have the cheapest full coverage rates for most people.
But smaller companies can be very cheap. Erie and American Family aren't available in most states but sell cheap policies. Getting quotes from smaller, regional companies can help you get a policy with a low down payment.
Car insurance companies with cheap full coverage rates
Find Cheap Car Insurance Quotes in Your Area
- The lower your car insurance rate is, the cheaper your first bill or down payment will be. Shopping around lets you check rates and find the cheapest option for you.
- Auto-Owners and Travelers are the cheapest option for most people because they are more widely available than other companies. You can get a policy from Auto-Owners in 26 states. . Travelers is widely available, although in some areas you need to contact an agent to get a quote instead of getting quotes online.
- You might get a cheaper rate from Erie or American Family. Erie sells car insurance in 12 states and Washington, D.C. American Family is in 19 states.
- If you're a member of the military, a veteran, or the spouse or child of someone in the military, gets quotes from USAA. The company has very cheap rates for people affiliated with the military.
Car insurance companies with cheap full coverage rates
Company |
Value Penguin score
| Monthly full cov. rate | |
|---|---|---|---|
| Erie | $154 | ||
| American Family | $159 | ||
| Auto-Owners | $171 | ||
| Travelers | $173 | ||
| Geico | $187 | ||
All rates are monthly averages for full coverage. USAA is only available to military members, veterans and qualifying family members.
Cheapest minimum coverage car insurance companies with low down payments
Geico and Travelers have the cheapest minimum coverage rates for most people.
But you might be able to get a cheaper rate if you live in a state where you can get
Erie
or
American Family.
Car insurance companies with cheap minimum coverage rates
Find Cheap Car Insurance Quotes in Your Area
- Minimum coverage is usually pretty cheap, but that's because it doesn't give you much protection. You should only buy minimum coverage if you can't afford anything else. State minimum limits don't include coverage for damage to your car, and they can leave you at risk for high bills if you cause an accident.
- However, because the coverage is cheaper, the down payment is also cheaper.
- Bigger, national companies often have cheap rates, but you can probably get a better deal with a smaller, regional company, so it's worth it to shop around.
Car insurance companies with cheap minimum coverage rates
Company |
Value Penguin score
| Monthly min. cov. rate | |
|---|---|---|---|
| Auto-Owners | $52 | ||
| Erie | $53 | ||
| American Family | $60 | ||
| Geico | $65 | ||
| Travelers | $68 | ||
All rates are monthly averages for minimum coverage. USAA is only available to military members, veterans and qualifying family members.
Down payment amounts for high-risk drivers
If you have tickets, accidents or a DUI on your record, or if you have poor credit, you'll probably pay more for car insurance, which means your down payment will be higher.
Driver profile | Full cov. deposit |
|---|---|
| Clean record | $208 |
| Speeding ticket | $258 |
| At-fault accident | $310 |
| DUI | $391 |
| Poor credit | $412 |
All rates are monthly averages.
What should I do if I can't afford car insurance?
If you need to drive but can't afford car insurance, you can ask for a grace period, share a policy with other people, get a non-owner policy or consider a liability-only policy.
-
Check your policy's grace period. If you can't pay your car insurance bill right now but will have the money soon, ask your company about a payment grace period. You could have a few days or weeks to come up with the money to keep your coverage.
- Share a car insurance policy. If you own a car with roommates or family members who live in the same home, you can share a policy and split the cost. Or you could ask them to add you to their policy as a named driver.
- Try a non-owner policy. If you regularly drive someone else's car, a non-owner insurance policy could help you get affordable coverage. It's essentially a car insurance policy without coverage for a specific car.
- Switch to liability only. Liability-only car insurance is the cheapest coverage you can get. It costs an average of $76 per month nationwide. However, this likely isn't an option if you have a loan or lease. Lending companies typically require full coverage.
- Check for low-income savings. Some states offer discounted car insurance policies for drivers with low incomes, including California and New Jersey.
Try not to let your coverage expire, or you'll face higher costs in the future. If you have a lapse in coverage for 30 days or more, your rates could skyrocket when you restart coverage. And if you drive uninsured or cause an accident, you could face even more expensive penalties and fines.
How to get the cheapest car insurance down payment
Comparing car insurance companies is the best way to find cheap car insurance.
You might also be able to lower your down payment on car insurance by changing your coverage options, asking for discounts and increasing your deductible.
Get less coverage
You'll usually pay more than twice as much for a full coverage car insurance policy compared to a minimum coverage car insurance policy.
But keep in mind that without full coverage, you have to pay to fix any damage to your car yourself. Minimum coverage also has very low limits, which can leave you exposed to high bills if you cause an accident.
Ask about discounts
One of the easiest ways to lower your down payment is by qualifying for car insurance discounts. When you get a quote, make sure you ask the agent about all discounts the company offers.
Some discounts are very easy to get. For example, many companies offer a discount when you sign up for paperless billing or automatic payments. You may also be able to save if your car has certain features, your employer has a partnership with the insurance company or you're a full-time student with good grades.
Decline extras you don't need
If you're on a tight budget, you can decline car insurance extras and get a bare-bones policy.
For example, extra coverage like rental car reimbursement will pay for a rental if your car is in the shop after an accident.
Roadside assistance is another common car insurance add-on that you might not need.
Increase your deductible
Your collision and comprehensive deductibles are the amounts you have to pay to fix or replace your car after an accident before insurance will start paying.
Insurance policies with a higher deductible typically cost less. That's because the insurance company won't pay as much money after an accident. But it also means you have to pay more after an accident.
It's important to choose a deductible you can easily afford to pay. Otherwise, you might not be able to afford to fix your car, even if you have insurance. However, picking a higher deductible can save you money on your down payment.
Sign up for usage-based insurance
Usage-based insurance programs can help you save on your car insurance, but only if you're a safe driver. These programs track your driving habits via your cellphone or a small device you plug into your car. Some programs even let you "pay-per-mile," which is a great way to get cheaper coverage if you don't drive often.
Many companies give a participation discount, which will lower your car insurance down payment, just for signing up. Make sure you choose a program that won't raise your rates for poor driving habits. Otherwise, you could have higher bills in the future.
How to buy low down payment car insurance
If you want to pay for your car insurance monthly and find a low-deposit policy, start by getting free car insurance quotes and comparing costs from multiple companies.
- Figure out how much you can afford to pay for car insurance each month. From there, you can estimate your car insurance costs to figure out how much coverage you can get.
- Get online quotes from the cheapest companies. Fill out info about yourself, your car and your driving history for accurate quotes. Once you've gotten quotes, compare your first-month, monthly and total costs to find the best deal.
- Set up payments to start your policy. Most companies will let you pay your car insurance bill by electronic funds transfer (EFT), credit card, debit card or check. Watch out for any extra fees attached to the payment type you choose.
Most insurance companies offer instant auto insurance after you get a quote and make a payment. That means you can get coverage on the same day.
How to switch car insurance
Switching car insurance companies can save you a lot of money. But it has an extra cost at the beginning because you have to pay for your new car insurance before your old policy ends.
You can request a refund from your old company, but it can take up to 30 days. However, there are some things you can do to make the process easier on your bank account:
Is no-deposit car insurance a scam?
No-deposit or no-down-payment car insurance is not language regularly used by legitimate car insurance companies. Usually, companies that use these terms are either trying to mislead you or they are a scam.
Be wary of companies that claim you can "buy now, pay later" or get your first month free.
First-month-free offers
You typically can't get car insurance coverage until you make your first payment.
Companies that promise "$0 down" car insurance could be scamming you to get your personal info. They may also be offering you a deal as a way to take your money without giving you insurance. These scammers are called ghost brokers and are common on social media. If something seems too good to be true, check with your state insurance department to make sure it's not a scam.
Paying for quotes
It's also a scam if you're asked to pay a deposit to get a car insurance quote. No major car insurance companies will ask for a deposit or charge a fee just for a quote.
Getting a quote is a free way to check what a policy would cost. You'll only have to pay when you actually sign up.
Temporary car insurance
If you can't find cheap car insurance with no down payment, you might consider a company claiming to offer temporary car insurance. However, reputable companies don't typically sell car insurance for less than six months.
The best way to get car insurance for a short period is to pay monthly since you can cancel or switch at any time. And you can get a refund for any money you've already paid in advance.
Scam phrases to watch out for
If you see any of these phrases in an advertisement for no down payment car insurance, it might be a sign that the coverage is a scam.
- First month free. You can't get a free month of insurance. Even if you finance your premium, you don't get to skip the first month. You just pay it back later.
- Buy now, pay later. You might see this phrase in some premium financing advertisements, but it could also be used to mislead you. Insurance policies require payment to start coverage.
- Pay after your first claim. Insurance never works this way. You never get coverage for free until you have a claim. You always have to pay your company at least monthly.
- No payment needed. This is another phrase that could be used by financing companies, but in general, you have to pay your insurance company before they give you coverage.
Frequently asked questions
Can I get car insurance with no down payment?
You usually can't get car insurance without making a down payment. Insurance companies require you to pay for at least one month of your coverage to start your policy. The only way to get a policy without paying is to finance your premium through an agency such as Ocho. In that case, Ocho gives you a loan and pays your rate for you. Then you pay the premium back to them.
Is no down payment car insurance real?
Advertisements for no down payment car insurance are usually scams or misleading marketing. Insurance contracts require you to pay for coverage. The only exception is premium financing, where you take out a loan to cover your car insurance rate. You don't usually have to pay back the loan immediately, which means you might be able to get a policy without paying on the same day.
Can I get car insurance today and pay later?
The easiest way to get car insurance today and pay later is to put the payment on a credit card. That way, you have some time before you have to pay the card, and the money doesn't come out of your account right away. You could also finance your premium, if your agency offers it. However, premium financing is a loan, so make sure you read the conditions carefully and you know what you're signing up for.
Methodology
ValuePenguin got quotes for low down payment car insurance for a 30-year-old man with a 2018 Honda Civic EX and good credit.
State minimum quotes include only the required level of coverage in each state. Full coverage includes higher liability limits, comprehensive and collision coverage:
- Bodily injury liability: $50,000 per person and $100,000 per accident
- Property damage liability: $50,000 per accident
- Uninsured and underinsured motorist bodily injury: $50,000 per person and $100,000 per accident
- Comprehensive and collision coverage: $500 deductible
All rate data is from Quadrant Information Services, which ultimately comes from public insurance company filings. Your rate will likely be different based on your unique situation. Rates on this page are for comparison only.
ValuePenguin's insurance experts score companies using a review of costs, coverage, discounts, service and unique features. Customer satisfaction data is from the National Association of Insurance Commissioners (NAIC) and from J.D. Power surveys.
About the Author
Senior Writer
Cate Deventer is a Senior Writer who specializes in health insurance, Medicare, auto and home insurance. She's been a licensed insurance agent since 2011.
She started her insurance career working as a customer service agent for State Farm. She later moved to an independent agency, where she worked with several insurance companies and hundreds of clients. She quoted policies, filed claims and answered insurance questions. In 2021, she pivoted her career and began writing about insurance for Bankrate. She moved to ValuePenguin in 2023 and began writing about health insurance and Medicare.
Cate has a passion for helping readers choose insurance to fit their needs. She enjoys knowing that her research and knowledge help people choose insurance products that make a positive difference in their lives.
How insurance helped Cate
Cate used her health insurance knowledge to navigate a surgery in 2023. Understanding how her policy worked let her focus on recovery instead of worrying about bills.
Expertise
- Health insurance
- Medicare & Medicaid
- Auto insurance
- Home insurance
- Life insurance
Credentials
- Licensed Life, Accident & Health Insurance Agent
- Licensed Property & Casualty Insurance Agent
Referenced by
- CBS
- NBC
- Wall Street Journal
Education
- BA, Theatre, Purdue University
- BA, English, Indiana University
Editorial Note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
