Some drivers may be looking for very cheap car insurance with no deposit required, but you should expect to put some amount down in most cases. When buying car insurance, the money you put down is what binds the policy, which puts your coverage in force (or activates your coverage). However, the money you pay upfront technically is not a down payment. Instead, it is your first premium payment, or installment. You could also pay monthly rather than in one lump sum for the entire policy period if you prefer to make small payments throughout the year.

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Key takeaways
  • Most carriers require a “down payment,” or first policy payment, right away. However, some carriers may not.
  • Auto-Owners, Geico and Amica may offer cheap car insurance for drivers seeking low “down payments”.
  • A car insurance policy is not in force, or active, until a payment is made and until the policy effective date.
  • Although paying monthly may be easier on your budget, it can cost more than paying a lump sum in the long run.

What companies offer cheap car insurance with no deposit?

Searching specifically for very cheap car insurance with no deposit would likely not yield many credible options, as you have to pay something towards the policy to activate the coverage in many cases. However, there are several options for affordable, no- or low-down payment coverage. For example, you may be able to get cheap minimum coverage auto insurance from insurers such as Auto-Owners, Geico and Amica based on the average premiums of the carriers we reviewed.

When insurers offer a no down payment option, you save on one month of paying your premium and instead pay the remaining months of your policy at a higher rate until your renewal. What many drivers seeking cheap no down payment car insurance may actually be looking for is cheaper coverage overall. Looking into cheap insurers could be an effective way to have your premium cause less impact to your budget.

Similarly, Auto-Owners, Geico and State Farm could be thought of as offering cheap full coverage auto insurance with no down payment, or at least a minimal down payment based on our average rates from Quadrant Information Services. Your individual rate will vary depending on factors like your driving record, claims history and coverage needs.

Insurance company Average monthly minimum coverage premium Average monthly full coverage premium
Auto-Owners $27 $109
Geico $30 $108
Amica $37 $125
State Farm $38 $116
Travelers $40 $121
  • Bankrate utilizes Quadrant Information Services to analyze 2022 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
    • $100,000 bodily injury liability per person
    • $300,000 bodily injury liability per accident
    • $50,000 property damage liability per accident
    • $100,000 uninsured motorist bodily injury per person
    • $300,000 uninsured motorist bodily injury per accident
    • $500 collision deductible
    • $500 comprehensive deductible

    To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2020 Toyota Camry, commute five days a week and drive 12,000 miles annually.

    These are sample rates and should only be used for comparative purposes.

How much does a car insurance down payment cost?

While not a down payment, the cost to activate your car insurance policy will depend on your premium for the entire policy period, which is six or 12 months. You typically have the option to pay the full premium for the policy period upfront, semi-annually, quarterly or in monthly installments. If you pay your car insurance in installments, you could end up paying more if the insurer adds installment fees.

The table below shows how much you may need to pay upfront, on average, to finalize an auto policy from some of the top, cheap insurers. While these are averages, these rates can be used as a point of comparison to know if you’re receiving a competitive quote, based on if you choose to pay your entire year’s premium in a lump sum or monthly.

Insurance company Annual full coverage “down payment” amount* Monthly full coverage “down payment” amount**
Auto-Owners $1,305 $109
Geico $1,297 $108
Amica $1,495 $125
State Farm $1,397 $116
Travelers $1,447 $121

*Average annual premiums do not include a pay in full discount (if available)

**Average monthly premiums do not include installment fees.

What to keep in mind when getting no down payment car insurance

If you are looking for cheap no down payment car insurance, there are some things to keep in mind. These tips may help you save on your car insurance costs.

Paying monthly could cost more in the long term

Although paying your auto insurance monthly may be better for your budget, it could end up costing you more money in the long term. This is because most insurance companies charge installment fees for each payment. So, if you have a six-month policy with a carrier charging a $3 monthly installment fee, for example, you would end up paying an extra $18 for the policy period, which is added to your total cost of car insurance.

Each insurance company sets its own installment fee amount, which could be anywhere from $1 to $5 or more per installment. If you are shopping for car insurance quotes and plan to make monthly payments, ask the insurance agent how much the installment fee is so you can decide if paying monthly is worthwhile for you.

Lump sum payments could save money

Even if you’re looking for cheap no down payment auto insurance as a cost-saving measure, keep in mind that those who can afford to pay their premium in full may end up saving more money over monthly payers. Not only are recurring installment fees avoided, but many insurance companies offer a discount for paying premiums in a lump sum.

If you want to pay your premium in full, budgeting for your annual premium ahead of time and setting aside the amount for each month in a savings account could make paying in a lump sum feel more manageable. Then, when your next renewal is due, you can use the saved amount to pay your premium. However, since car insurance rates continue to rise, you may end up owing more when your policy renews. It may be worth considering setting aside extra funds to account for an increased premium.

Shop for insurance before buying a car

If you’re on a tight budget and want cheap down payment car insurance, shopping for insurance before buying a car can help you stick to your financial goals.

The make and model of your car is one factor that determines car insurance rates. With an older car, you may be able to forego full coverage and get cheaper minimum coverage insurance instead if the vehicle is paid off. But, some newer cars have advanced safety features that could make them cheaper to insure. Shopping for insurance quotes can help you decide which car to buy, as well as help you find the cheapest car insurance companies offering the coverage you need.

Frequently asked questions

    • Your car insurance may be high because of your age (in most states), driving record, the company you’re insured with or the type of car you drive. For instance, young drivers usually pay higher premiums than older drivers due to their lack of driving experience, and having a speeding ticket or at-fault accident on your driving record can also increase rates. Additionally, driving a luxury or sports car may also cause your car insurance to increase compared to driving a sedan or SUV due to the higher cost of repairs.
    • There are several reasons that your first payment may be more expensive, such as if you need high-risk insurance. You can consult with a licensed insurance agent to find out what’s contributing to your premium. If you shop far enough in advance, you may be able to get an early shopper discount to help offset your insurance costs.
    • While having a loan does not impact your car insurance premium directly in most cases, coverage may be cheaper without a loan since you would not have to meet lender coverage requirements, such as having full coverage. If you own an older or cheaper car, you may wish to keep liability-only insurance, which could make your premiums cheaper than full coverage. Keep in mind that this option would mean paying out of pocket for damage to your vehicle in the case of a claim.