Can you get car insurance with no down payment?

You may see no down payment car insurance advertised, but reputable insurers require some kind of initial payment. This is the first payment for your coverage, not a down payment as when you take out a loan.

Some carriers may only require one month's down payment, while others may charge more, depending on your driving record, the amount of coverage you choose, your method of payment, and how often you will be billed. 

Typically, a car insurance company requires at least one month’s worth of your premium to secure coverage. Be wary of how this might affect your overall rates – sometimes, paying less upfront means paying more over time. Some insurers offer one month upfront and won’t charge anything more as a down payment.

How to get car insurance with a low down payment

A low down payment for car insurance means paying less of your premium upfront; one month is generally the minimum.

“Some companies might ask for a down payment when you start your policy, but many let you pay monthly or offer flexible plans that spread out the cost,” says Yiling Deng, associate professor of insurance and risk management at the University of Central Arkansas. “If there is a down payment, it is often equivalent to one or two months’ premium.”

The best way to get car insurance with a low down payment is to shop around. The more options you have, the better overall rates you can find. 

“Comparing quotes from different companies can often reveal a better deal,” Deng says. “Bundling your auto policy with other insurance, like home or renters, might also earn you a discount.”

If you have a clean driving record, that will work in your favor. Safe drivers tend to enjoy the lowest rates and can usually find a policy with only one month’s premium due when they sign up.

You can also buy state minimum liability insurance, which provides the minimum amount of coverage required in your state to drive legally. You won’t be covered for any damage to your car because collision and comprehensive insurance are not part of a state minimum policy. Furthermore, it doesn’t offer much coverage if you’re at fault in an accident. That said, it’s better than no insurance at all.

PEOPLE ASK

Can you get car insurance with a $20 down payment?

Probably not. It would be difficult to find even state minimum coverage for only $20 a month, the minimum down payment with most insurers. Since everyone’s rates differ, there is no way to guarantee a $20 down payment or any other specific number.

How to lower your down payment on car insurance

There are a few ways to lower your down payment on your car insurance:

  • The best option is to shop around, as each carrier will have different rates and policies. “Comparing quotes from different companies can often reveal a better deal,” Deng says.
  • The next best thing to do is raise your deductible. “You might consider increasing your deductible if you can afford it, which could lower your monthly payment,” Deng says. Lower overall costs mean a smaller down payment upfront.
  • Another way to save money on your insurance premium is to maintain a safe driving record. Drivers with major violations or license suspensions on their records are subject to higher rates overall and usually need to put down a larger down payment to get back on the road. 
  • Keep an eye on your credit score. Some insurers consider your credit history a risk factor and charge your premiums accordingly. Try to improve your credit score if that’s increasing your payments.
  • Seek out every available discount.  “Ask your insurer about discounts for safe driving, low mileage, or finishing a defensive driving course, etc.,” Deng says.

Which auto insurance companies offer low down payment insurance?

Many companies allow you to pay just the first month’s premium as a down payment on your car insurance. You only pay for the first month upfront, not a separate fee or down payment on top of that. The following carriers are among those offering low down payment insurance:

What is Hugo Insurance, and is it legitimate?

Hugo is a newcomer to the insurance market that offers on-demand coverage in 13 states. This pay-as-needed insurance is the closest thing to no down payment car insurance, as it allows you to pay for as little as three days upfront. But there are important things you should know.

Hugo offers plans that allow you to pay for car insurance for a few days or weeks. On the surface, that sounds like a good idea: only pay for insurance when you plan to drive. However, it’s important to remember that the law in nearly every state requires you to carry continuous coverage, and you could face fines or other penalties if your insurance lapses.  

No down payment car insurance: FAQ

What can I do if I can’t afford the down payment for car insurance?

If you can’t afford the down payment on your car insurance, ask your insurance company if they will let you pay your first month’s premium as the down payment. Also, inquire if you can spread the down payment across your monthly billing cycle. If neither are options with your current insurer, shop around for a carrier that specializes in first-month-only down payments. You can also reduce your coverage or raise your deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim. to get your overall costs down, which will in turn lower your down payment.

Are there state programs for low down payment car insurance?

There are a few states that offer programs for low-income drivers, and may offer a low down payment option. Only California, Hawaii and New Jersey have programs for low-income car insurance to help people reduce their payments. California has the California Low-Cost Automobile Program (CLCA). Hawaii’s low-cost car insurance program is available to residents over 65 who are blind or disabled. New Jersey has the Special Automobile Insurance Policy (SAIP) which offers partial insurance to residents with Medicaid with hospitalization and only covers emergency medical care after an accident up to $250,000.

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