Car insurance can be costly, making car ownership that much more expensive. If you’re already living on a tight budget, finding a cheap policy that doesn’t require money up front might be a priority. Realistically, finding no down payment car insurance is hard because the money you put down is what secures the policy and activates your coverage. If you’re tight on cash, consider looking instead for a policy that lets you pay in monthly installments rather than in one or two lump sums. Bankrate’s insurance editorial team breaks down how car insurance works to help you as you start your search for cheap car insurance.

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Key takeaways

  • Most car insurance carriers require a "down payment," or first policy payment, right away to activate your policy.
  • Auto-Owners, Geico and Amica may offer cheap car insurance for drivers seeking low "down payments."
  • Although paying monthly may be easier on your budget, it can cost more than paying a lump sum in the long run due to fees or interest.

Where can I buy very cheap car insurance with no deposit?

If you do a search for very cheap car insurance with no down payment, it’s unlikely that you’ll find any reputable options. The unfortunate truth is that to get car insurance, you almost always need to pay something toward the policy, even if it’s just premiums for your first month of coverage. You can’t just sign the paperwork, get insurance and worry about paying for it later.

Some insurers will give you the option of making a reduced payment in the first month of your policy, spreading the remainder of that payment out over the rest of the policy’s life. Still, you will need to make some type of payment upfront.

There are many insurers that specialize in inexpensive insurance policies on average. Of the insurers we’ve reviewed, Auto-Owners, Geico, and Amica offer some of the cheapest average premiums for minimum coverage or full coverage auto insurance policies.

Getting quotes from carriers that typically offer cheaper policies might be a good way to make your premium fit in your budget, although you should keep in mind that car insurance rates are very personalized, and even a company that offers cheap average rates might not be cheap for you. Also consider asking about a monthly payment plan rather than a policy that requires lump sum payments once or twice a year.

Insurance company Average monthly minimum coverage premium Average monthly full coverage premium
Auto-Owners $27 $113
Geico $31 $113
Amica $36 $122
State Farm $39 $123
Travelers $41 $129
  • Bankrate utilizes Quadrant Information Services to analyze 2023 rates for 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 2021 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 $1,361 $113
Geico $1,353 $113
Amica $1,467 $122
State Farm $1,480 $123
Travelers $1,551 $129
*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. 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 a cheap down payment car insurance, shopping for insurance before buying a car might help you stick to your financial goals. That’s because the make and model of your car is one factor that determines car insurance rates.

With an older car that you’re able to purchase outright, you may be able to forego full coverage and get cheaper minimum coverage insurance instead, although you’ll want to make sure that is the right financial move for you. On the other hand, some newer cars have advanced safety features that could make them cheaper to insure. Comparing insurance quotes from multiple companies can help you decide which car to buy and help you find the cheapest premium for the car insurance coverage you need. Consider looking for online car insurance using a comparison website to get quotes more quickly.

How to save money on car insurance

Like all insurance, car insurance companies base the amount they charge on your perceived risk. If an insurer thinks you’re more likely to get into an accident or file a claim for another reason, they’ll tend to charge more to compensate for that risk. That means saving money on car insurance typically involves reducing your risk of getting into an accident and limiting how much the insurer will have to pay if you do file a claim. Here are a few things that might help you save on car insurance:

  • Drive safely: One of the best ways to save money on auto insurance is to build up a good driving record. The longer you can go without getting a ticket or getting into an accident, the better it will be for your budget. If you are a good driver, enrolling in a telematics program with your insurer could also save you money, as these programs track your driving in real-time to allow you to earn discounts for driving safely.
  • Look at your vehicle: The car you drive also plays a big role. Newer, more expensive cars cost more to insure than older ones that aren’t worth as much. You could consider changing vehicles if insurance costs become prohibitive. Reducing the amount of coverage will also lower your premium, just be sure to follow state law for minimum insurance amounts and maintain enough coverage to protect yourself financially.
  • Improve your credit score: Another way to reduce your premiums (in most states) is to improve your credit score. In every state except California, Hawaii, Michigan and Massachusetts, which ban or restrict the practice, insurers can use your credit-based insurance score when determining your premium. Data has shown that people with higher credit scores file fewer claims, so improving your credit score could help lower your premiums, sometimes significantly.
  • Inquire about discounts: Ask your insurer about any potential discounts you qualify for as you can typically stack discounts for maximum savings. You can often save money by bundling multiple insurance policies, taking defensive driving classes or qualifying for other discounts.

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. Consider talking with your car insurance agent to see what may be driving your rates up and what you can do to potentially lower them.
    • 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.
    • Car insurance isn’t necessarily cheaper if you don’t have an auto loan. You’ll usually pay the same amount of the same level of coverage. However, your lender may require that you buy a full coverage policy, a specific level of insurance which may be more than you’d buy otherwise, which can lead to higher premiums. Driving an older or cheaper car also means you might consider options like liability-only insurance, which can be cheaper, but that most lenders wouldn’t allow. Whatever you decide, you may want to consult a financial planner or licensed insurance agent to ensure that your cost-cutting strategies aren’t putting you at financial risk.
    • Bankrate’s research finds that the average cost of car insurance in the US is $2,014 per year for full coverage. Buying the minimum required coverage costs $622 per year on average. Car insurance rates are highly personalized and based on multiple factors, so, while averages might give you a sense of where to start, your actual rates could vary dramatically from the average.
    • Driving without car insurance is illegal in most states, so if you can’t afford a policy, you might not be able to drive. Depending on the state you live in, the minimum amount of coverage required might be pretty cheap. If you’re still struggling to afford a policy, talk with your insurer to see if there are any ways you can reduce the price of your policy. Some states, including California and New Jersey, offer programs to assist drivers who are struggling to afford car insurance.