Cheap Car insurance with No Deposit
Your initial car insurance payment isn’t really a deposit. It covers your policy’s costs, and it’s rarely avoidable. You can keep it small by choosing a company with cheap rates, picking a higher deductible and using discounts.
How no-deposit car insurance works
The idea of no-deposit car insurance is misleading. The down payment you make to activate your policy covers your first few weeks or more of coverage. The exact length of time depends on the payment plan you choose.
What you can get from many companies is car insurance with a low down payment. This usually means choosing to pay your car insurance premium monthly. It also means buying the policy from the company with the lowest rate for you.
Paying your premium monthly, rather than every six months or yearly, is cheaper at the start, but it often costs more in the long run. Most companies give you a discount if you pay in full for six or 12 months at a time.
Beware of companies that promise cheap car insurance with no deposit or no down payment. Legitimate car insurance companies usually require a payment of some sort before they cover you. This is usually in the form of your first installment payment.
It’s good to read the fine print for companies that offer no-deposit car insurance online. Many just help you find the cheapest quote from among the companies they work with. This helps you shop, but you still have to make a down payment.
In eight states, OCHO offers no-interest loans that pay off your car insurance bill up front. The repayment schedules include options with no down payment. Taking out a new loan may hurt your credit score, but paying it off on time can help. OCHO offers policies from more than a dozen companies.
How to lower your car insurance down payment
To lower your car insurance deposit, or down payment, compare car insurance quotes from a number of companies before you buy a policy.
The quote you get from one company will often differ from the quote you receive from others. This is because each company has its own way of determining risk and calculating rates.
You can also get cheaper rates by buying less coverage, picking a higher deductible and looking for car insurance discounts.
Many factors play a role in what you pay for car insurance, including:
- Your age
- The make and model of your car
- Where you live
- Your driving record
- If you’ve filed any claims before
You may get a lower quote, and thus a lower down payment, from one insurance company than you do from others because of how they view these factors.
Make sure you look carefully at the payment options each company offers you with your quotes. The cheapest company for you will usually also have the lowest down payment, but this is not always the case. at the payment options each company offers you with your quotes. The cheapest company for you usually has the lowest initial payment, too, but that’s not always the case.
How to save money on car insurance
Shopping around can help you find a car insurance payment plan with the smallest down payment. It’s also good to ask about discounts and consider higher deductibles to reduce your rate and upfront cost.
Buy a policy from the cheapest car insurance company for you
State Farm has the cheapest car insurance for most drivers, based on our research. Its average rate is $56 a month. This is for liability insurance, or minimum coverage.
Cheapest companies for minimum coverage car insurance
| Company | Monthly rate | LendingTree score |
|---|---|---|
| State Farm | $56 | 4.5 |
| Travelers | $59 | 4.4 |
| Geico | $65 | 3.7 |
| Progressive | $69 | 3.8 |
| Nationwide | $76 | 2.8 |
| Farmers | $101 | 3.1 |
| Allstate | $104 | 3.2 |
| USAA* | $39 | 4.1 |
Travelers and Geico also have affordable minimum coverage car insurance rates. They charge an average of $59 and $65 a month, respectively.
If you have military ties, you might get even cheaper car insurance from USAA, which charges an average $39 a month.
Travelers has the cheapest full coverage
Cheapest companies for full coverage car insurance
| Company | Monthly rate |
|---|---|
| Travelers | $135 |
| State Farm | $144 |
| Progressive | $160 |
| Geico | $173 |
| Nationwide | $190 |
| Allstate | $248 |
| Farmers | $258 |
| USAA* | $125 |
State Farm offers affordable full coverage, too, if USAA isn’t an option. Its average monthly rate is $144.
Travelers is also a great option if you have bad or poor credit and need cheap car insurance with a low down payment. It offers the cheapest average rate of $249 a month for most drivers with bad credit.
- Comparing quotes from multiple insurers could save you hundreds of dollars a year.
- Choosing a high deductible on your policy will lower your rate.
- Travelers and USAA customers pay under $1,600 a year on average for a full-coverage policy.
Cheapest car insurance companies for drivers with bad credit
| Company | Monthly rate |
|---|---|
| Travelers | $249 |
| Progressive | $271 |
| Nationwide | $279 |
| Geico | $282 |
| Allstate | $402 |
| Farmers | $473 |
| State Farm | $593 |
| USAA* | $227 |
Drivers with military ties may get an even lower rate from USAA. Its average rate for drivers with poor or bad credit is $227 a month.
Consider local or regional companies, too, if you need cheap car insurance with bad credit. Acuity, Concord, Grange, MMG and Westfield all offer average rates that are cheaper than even USAA’s, though they only sell policies in certain states.
Get less coverage
Reducing your amount of coverage is another way to save money on car insurance.
You may not be able to do this if you have a loan or lease on your vehicle. In other situations, though, you might be able to drop collision
Having just liability coverage will help you the most, but it also protects you the least.
Raise your deductible
Having a higher deductible
You need to pay your deductible if you file a claim, though, so make sure you can afford whatever deductible amount you choose.
See if you qualify for discounts
Discounts can not only help cut your overall car insurance costs, but they can also make your first payment lower.
You can usually get discounts for:
- Bundling multiple insurance policies with one company
- Covering more than one vehicle
- Taking a defensive driving course
- Being a student who gets good grades
Look online to find discounts that seem right for you. If you’re unsure, talk with an agent — they’ll be able to figure out which discounts you might qualify for and save you money..
Why car insurance companies require a down payment
Companies require a down payment for car insurance to cover the costs of protecting you. Once your policy begins, your insurance company has to pay for certain costs if you’re in an accident. Your initial payment covers your share of these potential expenses.
Frequently asked questions
A legitimate company won’t offer you car insurance with no deposit. You should also be wary of companies that promise “first month free” car insurance or “instant” car insurance with no down payment. Honest companies usually require you to pay for a portion of your policy up front.
Look for insurance companies that will sell you coverage with the lowest down payment for your situation. This may require a bit of work on your part, but it’ll usually be worth it.
To get a low down payment for your car insurance policy, you usually need to find the company with the cheapest car insurance rate for you. Qualifying for one or more discounts helps, too. Most quotes show the down payment for each payment option.
Car insurance companies typically let you choose to pay your policy premium monthly, every six months or yearly. You’ll pay more overall if you pay monthly, and you’ll pay less if you pay for the entire policy term at once.
While no-deposit insurance is misleading, you may be able to get a deal on your first payment. But because a lower down payment exposes insurers to more risk, they’ll want someone who’s a safe driver with good credit. Just like your driving record and credit score can affect what sort of auto insurance rate you get, it can also help you make a low first payment.
If you need car insurance now but can’t afford to make your first payment until later, consider contacting a local agent rather than buying your policy online.
A local agent may be able to offer some flexibility in terms of payment options. Even if they can’t, they might offer other advice that could help you get the coverage you need as soon as possible.
How we obtained car insurance rates
LendingTree uses insurance rate data from Quadrant Information Services using publicly sourced insurance company filings. Rates are based on an analysis of hundreds of thousands of car insurance quotes for a typical driver. Prices are shown for comparative purposes only. Your own rates may be different.
Unless noted otherwise, quotes are for a full-coverage policy for a 30-year-old man with good credit and a clean driving record who drives a 2018 Honda CR-V EX.
Coverage limits
Minimum-liability policies provide liability coverage with each state’s required minimum limits.
Full-coverage policies include collision, comprehensive and liability coverage:
- Bodily injury liability: $50,000 per person, $100,000 per accident
- Property damage liability: $50,000
- Uninsured / underinsured motorist bodily injury: $50,000 per person and $100,000 per accident
- Personal injury protection: minimum limits, where required by law
- Collision: $500 deductible
- Comprehensive: $500 deductible
How we evaluated car insurance companies
Our team of insurance experts rated insurance companies based on several categories. These categories include average rates, discounts, coverage options, third-party customer service ratings and app/website experience. We weighted these categories based on what customers value in an insurance company.
For third-party customer service ratings, we included Complaint Index scores from the National Association of Insurance Commissioners (NAIC) and financial strength ratings from A.M. Best. NAIC Complaint Index scores are used to determine how satisfied customers are with their claims, while financial strength ratings from A.M. Best reflect the ability to pay out claims.
*USAA is only available to current and former members of the military as well as certain family members.