You can buy a car with no down payment, but is there such a thing as no down payment car insurance? When you get a quote for an auto insurance policy, you are usually given payment options. For most, monthly payments make car insurance affordable. Depending on when auto insurance coverage becomes effective, you may be able to delay paying money upfront. Ultimately though, you have to pay some amount of money upfront, so you have auto insurance coverage in place in the event of an accident.


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What is no down payment car insurance?

No down payment car insurance is a type of auto insurance policy that does not require money upfront. 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 sell coverage for free 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 no down payment auto insurance works

Drivers can choose to pay their insurance costs in one of two ways—either in monthly payments or in one lump sum to cover six months or a year at a time. Most companies offer a discounted rate on your auto insurance coverage when you pay the annual cost upfront.

Ultimately, paying more than the first month’s premium for your auto insurance policy means you are making a down payment. However, that down payment is not a separate insurance cost. Rather, it is part of your annual premium. Think of it as paying a portion of the yearly rate.

If you opt for no down payment insurance, you pay the premium 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.

Who can get no down payment insurance?

Unfortunately, you cannot get an auto insurance policy that offers no down payment for coverage. For coverage to be effective, money upfront is required. For those who cannot pay the entire premium upfront, monthly payments are usually a better option.

Keep in mind, if you are starting a new auto insurance policy, coverage is not effective until the company receives money upfront. So 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 money upfront to bind the policy. If you don’t pay at least the first monthly payments by November 30, coverage may not be in force if you get into an accident.

How much is no down payment car insurance?

There is no such thing as no down payment car insurance because everyone has to pay money upfront to have an in-force auto 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 factors, including the type of car you drive, your age (except in Hawaii), 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 monthly payments.

How to save on car insurance

Drivers who are looking for affordable car insurance with no money upfront will be disappointed. An auto insurance policy requires money upfront, even if it’s the first installment of monthly payments, to get covered. 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 upfront.

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. Before you increase your deductible, make sure you can afford the higher amount of money upfront if you do need to file a claim and use your auto insurance coverage.

How to get no down payment car insurance

No down payment car insurance is not something that you can get. Instead, focus on savings opportunities like applying discounts and selecting the right amount of auto insurance coverage, so you do not pay for unneeded coverage. If you find affordable car insurance, making the monthly payments should be easier. The company will also require less money up front to pay for your auto insurance policy.

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 on an annual basis may actually be the most cost-effective option if your insurer offers a discount for paying in full. Many car insurance companies will offer this type of discount to drivers who want to pay for their policies up front, and you may also be able to cut out any processing or extra billing fees by paying up front as well. Some car insurance companies will also offer six-month policies that can be paid upfront, often in return for a paid-in-full discount.

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 or your 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 score: Your credit score 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

    • Many drivers want to find the best car insurance company. In reality, there is not a single provider that is the best option for every driver. To find the best car insurance for you, look for companies that meet your unique needs for affordable car insurance, like robust auto insurance coverage options, good discounts or highly rated customer service. Then collect quotes from several companies to see which one can offer you the best rates for your needs.
    • No. All car insurance policies will require you to make some kind of payment in order for the insurance to become effective.
    • Insurance companies typically offer six month or annual auto insurance policies. If you need to buy auto insurance coverage for one day, you will likely have to buy a standard auto insurance policy. If you can sign up for auto insurance coverage with monthly payments, you might be able to pay the first month’s money upfront and be reimbursed when you cancel the policy if it is no longer needed. Keep in mind that many insurance companies charge a cancellation fee for not retaining your policy for six months or a year, so you should speak with your insurance agent before getting a policy you intend to cancel soon.