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Can you get car insurance with no down payment?

Updated Mar 25, 2024
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What is no down payment car insurance?

In theory, no down payment car insurance is a type of auto insurance policy that does not require money up front. Once you pay the first month’s premium of insurance costs, your coverage will start.

However, the term no down payment car insurance is somewhat misleading. Insurance companies do not have car insurance with zero down expenses or sell policies labeled “no down payment.” You will need to pay at least the first installment of monthly payments — in itself a kind of down payment — before your policy can become active.

How to get no down payment car insurance

No down payment car insurance is not something that you can get. Why do you have to pay a down payment for car insurance? In short, the insurance company doesn’t want to insure your car for free and then have to pay out if you get into an accident right away.

Instead, focus on shopping around for affordable coverage, looking into savings opportunities like discounts and making sure you're not paying for coverage you don't need. Experts recommend speaking with a licensed insurance professional for individualized guidance.

How no down payment auto insurance works

While there is technically no such thing as no down payment auto insurance, you can eliminate a huge initial cost by paying on a monthly basis. For example, if your annual policy costs $800, you would pay around $66 in monthly payments. This is a good option for drivers who want affordable car insurance and cannot afford to pay more than the monthly rate at one time. You must pay the minimum monthly rate throughout the policy period to keep your auto insurance policy in effect.

Keep in mind that if you need auto insurance coverage effective November 30 but get a quote earlier in the month, you usually have until November 30 to pay to bind the policy. If you don’t pay at least the first monthly payment by November 30, though, coverage may not be in force if you get into an accident.

What are my options for car insurance payments?

Drivers typically have a couple of car insurance payment options: monthly or annually. While most car insurance companies will issue a car insurance policy on an annual basis, many drivers will opt to break the yearly cost into monthly payments instead. Paying your annual car insurance premium in monthly installments is a convenient option for those on a budget, though it may cost a little more in the long run due to processing and billing fees.

However, paying for a car insurance policy in full up front may actually be the most cost-effective option if your insurer offers a discount for paying in full. Many car insurance companies offer this type of discount, and you may also be able to cut out any processing or extra billing fees by doing so. Some car insurance companies will also offer six-month policies that can be paid up front, often in return for a paid-in-full discount.

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Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.

Advertising Disclosure
This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.

How much is no down payment car insurance?

There is no such thing as no down payment car insurance because everyone has to pay some amount of money to secure an active insurance policy. How much you pay for your auto insurance policy varies widely by the insurance company and the type of auto insurance coverage you need.

Insurance costs are based on several personal factors, as well, such as the type of car you drive, your age and gender (in some states), where you live and your driving history. Those with clean driving records usually get more affordable car insurance rates, so they might have to pay a smaller amount of money up front to start their policies.

To note, the average cost of car insurance in the U.S. is $2,542 per year for full coverage and $740 per year for minimum coverage, according to data from Quadrant Information Services.

Learn more: Cheapest car insurance companies in 2024

How to save on car insurance

Drivers who are looking for affordable car insurance with no money up front will be disappointed. An auto insurance policy requires payment, even if it’s the first installment of monthly payments. Insurance costs vary, but here are a few ways you can save on auto insurance coverage:

Improve your credit score

Your credit score has a significant impact on your car insurance costs in most states. The better your credit-based insurance score, the cheaper your monthly payments and the initial upfront amount of money required will typically be. Improving your credit score can help you get affordable car insurance with minimum money up front.

Participate in a telematics program

Most car insurance companies offer telematics programs that can help you get a reduced car insurance premium based on how safely and how often you drive. The program typically uses an app or device to track your driving. Once the insurance company has collected data about your driving for a specific period, they may offer you a discount on your premium. Some car insurance companies only use telematics to give discounts, but others may penalize you if you exhibit unsafe driving habits.

Raise your deductible

If you can afford to increase your deductible, it will lower your monthly payments. However, the savings may not make a significant difference in your insurance costs. Regardless, before you increase your deductible, make sure you can afford the higher amount of money you'll have to pay out of pocket in case of a covered claim.

What should I do if I can’t afford car insurance right now?

If you can’t afford car insurance right now, there are some steps you can take to make it more affordable over time. These include:

  • Compare insurance quotes: One of the best ways to save money on your car insurance policy is to compare quotes from multiple providers.
  • Reduce your coverage: If you have more coverage than required by your state, lender or financial institution and can’t afford your current car insurance policy, you may be able to reduce or cut out certain types of optional coverage to make the policy more affordable.
  • Look into assistance programs: Certain states provide assistance programs for drivers who can’t afford car insurance. These programs are typically reserved for low-income drivers, but if you’re low income and live in a state with an assistance program, it may be worth exploring.
  • Purchase a pay-per-mile policy: If you drive less than a certain number of miles per week, you may be able to get a pay-per-mile policy. In some cases, you may be required to install a telematics device in your car, but you’ll typically pay a base rate plus a per-mile fee, which may lower the cost of your policy.
  • Improve your credit: Your credit history factors into your car insurance premium in most states. Improving your score could make your car insurance policy more affordable over time.
  • Purchase minimum coverage: Most states legally require drivers to have car insurance. If you can’t afford car insurance right now but own your car outright, you may want to consider purchasing the lowest level of coverage required by the state.
  • Use alternative transportation options: It may also be worth looking into alternative transportation options, such as public transportation, rideshare services and carpooling.

Frequently asked questions

Written by
Lara Vukelich
Insurance Contributor

Lara Vukelich is a freelance writer who has written for Bankrate, Huffington Post and Quiet Revolution to Expedia, Travelocity, and MyMove. She is based in San Diego, California.

Edited by Editor, Insurance