No-Down-Payment Car Insurance

In reality, there is no such thing as "no down payment" car insurance. Consider these other ways to lower your car insurance and get the most affordable rates.

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Chris Tepedino is a feature writer that has written extensively about home, life, and car insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and C...

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Written by Chris Tepedino
Insurance Feature Writer Chris Tepedino

Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent Laura Walker

UPDATED: Jun 13, 2022

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The Rundown

  • Most insurers offer the ability to pay your insurance over the course of the year in monthly payments 
  • If you are looking for affordable insurance companies, it is best to shop around and compare prices
  • Paying for your insurance upfront is usually cheaper than paying it monthly

If you don’t have a lot of money or you recently bought a car you might be looking for no-down-payment car insurance. The bad news is that there isn’t really any such thing as “no down payment car insurance”, as you will always have to pay the first month upfront. 

Most insurance companies will offer a discount for paying in full upfront, so it is often cheaper not to choose a monthly payment plan. 

Auto Insurance with No Down Payment

In reality, there is no such thing as auto insurance companies with no down payments. You will always have to pay the first month’s premium up front. and maintain coverage by paying it monthly. 

Many insurance companies ask for two months upfront, and some that advertise “no down payment” simply mean you only have to pay your first installment, and not two months’ worth, in order to start your policy. 

For the sake of clarity, you can consider “no down payment insurance” to mean that you are choosing to pay your premiums monthly. The insurance company will charge you in 12 even monthly installments, usually due on the first of each month.

Why choose no-down-payment car insurance?

The average cost of insurance for all vehicle types is $1,342 per year. Many people cannot afford to pay that much all at once, especially if you’ve just shelled out for a new or used vehicle. It makes sense to opt for no-down-payment auto insurance because it’s much easier to pay that premium broken down into 12 monthly payments. 

So-called, “No-down-payment insurance” allows you to do that. 

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Cheap Insurance Coverage Alternatives

Not paying a lump sum for insurance is easier but it can be more expensive. You can use other ways to get the cheapest car insurance quotes. These include:

  • Ask your current insurance company about available early signing discounts if you renew your policy before it expires.
  • Find out how much lower your premiums will be if you bundle your vehicle insurance with home insurance.
  • Ask for and take advantage of discounts available for people in your industry or students if you are in college.
  • Take a certified defensive driving course to improve your driving record and lower your monthly premiums.
  • Shop around for better rates, compare quotes across many insurance companies and buy a new policy with the cheapest service provider.
  • Choosing to raise your deductible can help to reduce your monthly premiums.
  • If you have older cars with less value, reduce the insurance coverage you take out on them – less coverage means lower premiums.
  • Change your vehicle and get one that is safer and cheaper to insure. For example, you could get rid of your sports car and find a stable family vehicle.
  • Opt for a car with safety features like forward collision warning or automatic emergency braking.
  • Don’t let your auto insurance coverage expire before renewing or getting a new policy.

It would be best to combine and consider multiple strategies to help you lower your insurance rates as much as possible.

Explore the No-Down-Payment Car Insurance Option

“No down payment” car insurance is not really a thing, but most companies do allow you to pay monthly, with the first month in advance. This can be more expensive, so it is wise to consider your financial situation first before choosing the monthly payment car insurance option. Paying monthly makes sense if you are mindful of cash flow. On the other hand, you may get a discount if you pay for your entire insurance policy upfront.

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