How to Get Cheap Car Insurance With No Deposit
Safe drivers can get no-deposit car insurance from most major companies like Geico and Progressive.
Find the Cheapest No-Deposit Insurance Quotes in Your Area
When you shop for a new car insurance policy, many insurers will charge extra for your first month's payment, which is called the deposit.
Some drivers will qualify for no-deposit car insurance, which means your first month is the same as or cheaper than the following months.
How no-deposit car insurance works
You have the option of paying monthly when you start a new car insurance policy. When the first payment is higher than other months, this difference 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 car insurance means your first month is the same as or cheaper than the following months.
The size of the deposit, or the extra amount on your first payment, depends on factors like your car, driving history and state. In general, people with safe driving histories and high credit scores are most likely to qualify for no-deposit or low-deposit car insurance.
No-deposit car insurance isn't a specific policy offered by insurance companies, and it doesn't mean you'll be able to get car insurance without paying for the first month.
Sample quote for no-down-payment car insurance
When you get a quote, you'll often see three numbers to consider:
- Deposit/first-month cost
- Monthly recurring cost
- Cost to pay in full
For example, Progressive's quote page breaks down your first month's cost, monthly payments and total cost for a no-deposit car insurance policy:
In this example, there are three payment options:
- If you chose to pay for monthly car insurance with no deposit and a lower first-month payment, you'd pay $34.35 for your first month and $65.13 per month for the next five months. Your six-month cost would be $360.
- If you chose the payment plan with even installments, your monthly bill would be the same every month, $60.
- If you chose to pay for all six months in advance, your six-month cost would be $320, which breaks down to $53 per month. You'd save $40 by paying up front.
Companies with the cheapest no-deposit car insurance
Geico, Progressive and State Farm all have very cheap car insurance with no deposit or a low deposit.
Progressive has the cheapest first-month payment for a driver with a good driving history. There's no deposit, and the first month costs just $29.
No-deposit full coverage car insurance rates
| Deposit | $1 | $0 | $0 |
| First month cost | $62 | $29 | $99 |
| Monthly cost | $61 | $74 | $99 |
| 6-month cost | $369 | $400 | $596 |
Most insurers also charge a small fee to make monthly payments. Of the three major insurers we compared, only State Farm charges the same amount whether you pay your bill in monthly installments or a lump sum.
One downside to paying a lower rate for your first month is that your monthly cost will go up after the first month. The total cost of your policy isn't spread out evenly, so you'll end up paying slightly more after the first month.
Make sure you can afford the next month's payment, or you'll risk having your policy canceled for nonpayment and becoming uninsured.
Find Cheap Auto Insurance Quotes in Your Area
Who can get no-deposit car insurance
Typically, drivers who are seen as low-risk can get no-deposit car insurance or lower deposits.
How much you'll have to spend to begin coverage depends on the same factors that go into your insurance rates. That can include your state, car, driving record and credit score.
The insurance company and your risk factors will determine how much more or less your first month's payment is versus the other months.
A high-risk driver with a poor credit score or multiple accidents could pay up to 30% more for the first month.
How to sign up for no-deposit car insurance
If you want to pay your car insurance in monthly installments and find a no-deposit or low-deposit policy, start by getting free car insurance quotes and comparing costs from multiple companies.
1. Set your budget
Figure out how much you can afford to pay for car insurance each month. From there, you can estimate your car insurance costs and decide between minimum coverage and full coverage.
2. Compare quotes
Get online quotes from the cheapest companies you can find. Fill out info about yourself, your car and your driving history for accurate estimates. Once you've gotten quotes, compare your first-month, monthly and total costs to find the best deal.
3. Set up payments to start your policy
Most companies will let you pay your car insurance bill by electronic funds transfer (EFT), credit card, debit card or check. Watch out for any extra fees based on the payment type you choose.
Once you get your quote, you can generally buy your car insurance instantly. Most insurance companies offer instant car insurance with no deposit, meaning you can get coverage the same day as soon as your payment is processed.
How to make it easy to switch car insurance
Switching car insurance companies can result in some big savings, but it has an extra cost at the beginning: You have to pay for your new car insurance before your old policy ends.
You can request a refund from your old insurer, but it can take a while to get it, typically 30 days. Luckily, there are some things you can do to make the process easier on your bank account:
- Cancel your old policy right after signing up for your new one: Car insurance refunds take time to process, so you should cancel your old policy right after your new policy starts.
- Pay with a credit card: Unlike other bills (like your car payment), you can pay for car insurance using your credit card, if you have one. That way the money you spend on insurance won't actually leave your bank account for about a month after you pay your bill. Paying your current insurance bill with a card may also help you get your refund faster than having your insurer mail you a check. Just make sure you pay off your credit card bill in full the next month to avoid paying interest.
- Save your quote for later: If you find a great price for car insurance but don't have the money right away, you can save the quote for later. Most insurers let you save a quote for at least 30 days, but some insurers let you save it for much longer. For example, Progressive lets you save a quote for up to 13 months.
Is no-deposit car insurance a scam?
No-deposit car insurance is not a term regularly used by reputable car insurance companies. Be careful because it's sometimes used by disreputable companies in misleading or confusing ways.
Car insurance companies will not give you immediate coverage before you've paid for it. Be wary of companies that claim you can "buy now, pay later" or get your first month free.
First-month-free offers
Your policy is typically not active until an insurer has proof of payment. Companies that promise "$0 down" car insurance could be scamming you to get your personal info. They may also be offering you a deal that's too good to be true to take your money without giving you insurance.
Paying for quotes
Another scam is requiring a deposit to get a car insurance quote. If an insurance company or agent states or implies it's typical to charge for an insurance quote, the company may not be trustworthy. No major car insurance companies will require a deposit or fee just for a quote.
Temporary car insurance
If you can't find cheap no-deposit car insurance, you might be tempted by companies claiming to offer temporary car insurance. But reputable insurers don't typically sell car insurance for less than six months. The best way to get car insurance for a short period is to pay monthly since you can cancel and switch at any time and get a refund for any money you've already paid in advance.
Frequently asked questions
Can I get car insurance with no deposit?
You can't get car insurance without paying something for the first month, at least not from a reputable car insurer. You can get car insurance with no deposit or a low deposit, and you might even get a cheaper first-month payment, but you'll usually pay more for each month after that.
Do all companies require a deposit?
All reputable companies will require you to pay for your first month before they will cover you. Some may charge less for your first month, which is sometimes called low-deposit car insurance. Once you set up your payment, you can often have your coverage start the same day or the next day in some states.
Who has the cheapest no-deposit car insurance?
The best way to save money on your first month's bill is to find the overall cheapest rate for the coverage you need. USAA, State Farm, Farm Bureau, Erie and Geico have the cheapest online rates for most drivers. Start your search for the cheapest no-deposit car insurance with these companies.
How do I get my deposit back?
If you need to switch or cancel your car insurance before your policy is up for renewal, you can get your deposit back with a prorated refund. Once you cancel, your current insurer will send you a check with the remaining money you've already paid.
Do I need to pay a deposit with pay-as-you-go car insurance?
It depends. Some telematics insurers like Root and Metromile offer same-day car insurance, but the rate you get for the first month from some insurers might come with a deposit for certain drivers. Your cost for the next month will be based on your driving skills and actual mileage, and that rate might be higher or lower than your first month's bill.
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