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KEY TAKEAWAYS
  • The down payment is the amount you have to pay to get an insurance policy started.
  • A no down payment insurance policy still requires some up front payment to get coverage started, although it may be a lesser amount.
  • The amount of the down payment on car insurance is usually the first month's payment or a percentage of the total premium.

If you've seen ads for "no money down car insurance" or "car insurance with no deposit", you may wonder what that means and if it's really a good way to save on car insurance.

No car insurance company will provide coverage unless some amount of premium is paid, but some require less up front than others. Most policies advertised as no down payment car insurance are really offering to start a policy with the minimum amount of payment possible, usually one month's premium.

How much is a car insurance down payment and is there a way to reduce it? Read on to learn more about how down payments work with car insurance.

What is a down payment on car insurance?

Car insurance down payments don't work the same way as, say, a down payment on a loan. In that case, you pay an upfront amount to reduce the overall amount of the loan and reduce monthly payments. 

A down payment on your car insurance is really just the first payment that gets the policy up and running. In many cases, it's the first month of coverage, but in some cases the company will charge more. It doesn't change the amount of the premium overall, just much you pay when you buy the policy.

Can you get car insurance without a down payment?

While there are some companies that offer car insurance with a low down payment and keep that first payment minimal, you will always have to make a payment to get car insurance.

So, is there no down payment car insurance? Not really. Although it's advertised as a way to get cheaper car insurance, it doesn't really work that way. There are better ways to save, such as shopping around to compare rates.

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