Car insurance with no deposit or low deposit is a term used by some insurers to describe their pay monthly plans, where you only pay for the first month of coverage instead of a large lump sum upfront. This option may be suitable for drivers who want to save money or cannot afford to pay the whole year’s worth of insurance at once. However, there is no such thing as no deposit car insurance, as the first monthly payment still acts as a deposit.
How Car Insurance With No Deposit or Low Deposit Works
When you shop for a new car insurance policy, you usually have the option of paying monthly or paying in full. Paying in full can save you money in the long run, as many insurers offer discounts for paying upfront. However, paying in full can also be a financial burden, especially if you have a tight budget or an unexpected expense.
Paying monthly can help you spread out the cost of your car insurance over time, but it usually comes with a catch. Many insurers will charge extra for your first month’s payment, which is called the deposit or down payment. The deposit is applied toward future bills and encourages you to stay with the company through the length of your policy.
No deposit or low deposit car insurance means your first month is the same as or cheaper than the following months. For example, if your monthly payment is $60, your first month could be $60 or less. This can help you save money on your initial payment and get covered faster.
However, no deposit or low deposit car insurance is not available for everyone. Insurers will consider several factors when determining your deposit amount, such as your driving history, credit score, location, vehicle type and coverage level. Generally, drivers with safe driving records and high credit scores are more likely to qualify for no deposit or low deposit car insurance.
How to Get Car Insurance With No Deposit or Low Deposit
The best way to get car insurance with no deposit or low deposit is to compare quotes from multiple insurers. You can use online tools like MoneyGeek’s car insurance calculator to get an estimate of your car insurance rates without entering your personal information.
When you compare quotes, pay attention to the payment options offered by each insurer. You will usually see three numbers: the deposit/first-month cost, the monthly recurring cost and the cost to pay in full. Look for insurers that have a low or no deposit amount and a reasonable monthly cost.
You should also look for discounts that can lower your car insurance rates, such as bundling, good driver, good student, safety device and loyalty discounts. Some insurers may also offer discounts for paying electronically or signing up online.
The Best Car Insurance Companies With No Deposit or Low Deposit
According to MoneyGeek’s research, some of the best car insurance companies with no deposit or low deposit are:
- GEICO: GEICO offers the cheapest insurance overall, with a low required deposit of $1. The first month’s cost is $62 and the monthly cost is $61 for a six-month policy.
- Progressive: Progressive has the lowest first-month payment of $29 for a driver with a good driving history. There is no deposit and the monthly cost is $74 for a six-month policy.
- State Farm: State Farm does not charge any extra for the first month and maintains a level rate across the six-month policy. The first month’s cost and the monthly cost are both $99.
Car insurance with no deposit or low deposit can help you save money on your initial payment and get covered quickly. However, it is not a specific policy offered by insurers and it does not mean you can get car insurance without paying anything upfront. To find the best car insurance with no deposit or low deposit, you should compare quotes from multiple insurers and look for discounts that can lower your rates.