No Down Payment Car Insurance — What’s the deal?

No down payment car insurance allows you to spread out your payments over time. However, you may be charged an extra $10/mo, resulting in higher car insurance rates overall.

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UPDATED: Jun 2, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jun 2, 2022Fact Checked

Here's what you should know

  • No down payment insurance allows car owners without much money to protect their vehicle
  • No down payment auto insurance policies are typically six months to one year
  • With this type of policy, you will pay your premium upfront each month rather than receiving a bill at the end of every month

No down payment car insurance is a solution for those who understand the need for protection but struggle with the money required for an initial premium.

Although many cities have good public transportation systems and “going green” has become more of a lifestyle than a trend, most people who own a car don’t want to give it up.

Although owning a car gives you privacy, security, and freedom, the cost of the down payment for insurance is difficult for many to come up with, especially for first-time car owners who are looking for affordable monthly payment options.

Looking for an auto insurance policy for your new car? Use our search tool above and compare car insurance quotes online today! It’s a fast, easy, and free way to find affordable car insurance.

How No Down Payment Car Insurance Makes Coverage Affordable

Unless you live in a big city with a great public transportation system or in a small town where everything is within walking distance, having a car is necessary for everyday life.

In order to get wherever you have to be, you need a car. And if you have a car, you need auto insurance coverage.

A car is no longer a luxury for most people, and an expensive entity in and of itself with gas and monthly payments.

On top of this expense, it is mandatory to have car insurance to drive in all but two states in America.

Having car insurance will save you from the heavy penalties of driving without car insurance, such as steep fines or impoundment, but your budget might not allow for the pricey down payment many insurance companies require.

In this economy, you might find it easier to avoid huge down payments and instead pay a monthly fee that’s a little higher than normal for your car insurance.

But how can you find the cheapest car insurance with affordable monthly payment plans?

Seeing the needs of their customers, many insurers offer programs with little or no down payment for car insurance and allow drivers to pay for insurance in monthly installments.

No down payment car insurance is exactly what it sounds like. Auto insurance companies offer policies that you can get without paying them a large lump sum at the beginning of your contract.

Instead, they split the cost into however many months your policy lasts (usually three, six, or 12). A three- or six-month car insurance policy is convenient if you only need temporary car insurance and saves you the expense of an annual premium.

When you pay money upfront, your first month’s premium acts as your down payment. This initial payment can make your average monthly car insurance payment easier to handle.

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Advantages of No Down Payment Car Insurance

No down payment car insurance allows you to get instant auto insurance policies at an affordable monthly rate.

Maybe you bought a new car and are eager to try it out but this could be an expensive venture if you get caught without insurance.

Many insurance providers allow you to order a no down payment car insurance policy online so you can be insured with a click of a button and be on the road soon after that.

Having a no down payment car insurance policy will allow you to spread your insurance premiums out to be more affordable. Because there is no down payment, you don’t have to plan on a large upfront payment.

If you can’t afford a hefty down payment and don’t want to wait to save enough for one but can afford a monthly premium, no down payment car insurance might be your best option.

This type of insurance will give you more freedom than you would receive with other auto policies. No down payment car insurance policies require you to pay upfront each month instead of getting a bill near the end of the month.

You will find some companies only write six-month car insurance policies. Halfway through the term of your policy, you might find another insurance company with cheaper coverage options.

Because you pay monthly, you won’t have to wait until the year is up to switch over.

Some companies that offer no down payment car insurance options allow you to try out the policy for a month before committing to stay with them. This gives you a chance to see if you’re satisfied with their coverage.

You should ask your insurance agent if their company offers monthly plans before signing an agreement.

The Main Disadvantage of No Down Payment Car Insurance

Although paying month to month may seem more flexible and offer cheaper insurance costs, there is one disadvantage:

Companies want to get their money, even if it appears like you’re getting the better deal.

No down payment car insurance can be more expensive because insurance companies can have up to a $10 monthly charge for this program and call it a billing fee.

In the long run, these fees could make the policy more expensive than one with a down payment.

Getting No Down Payment Car Insurance

The best way to search for no down payment car insurance is to go online. Insurance companies offer free quotes on their websites, and all you have to do is fill out short forms.

The link on this page allows you to complete one simple form and get multiple quotes; plus, there are options to narrow your search.

This way you can focus on quotes from only companies that offer car insurance with no down payment.

Enter your ZIP code now to quickly get car insurance quotes today!

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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