As a driver, getting car insurance without a down payment would be a reality come to pass. Unfortunately, it does not exist. Although, when shopping around for a policy, you may come across insurers that advertise auto insurance with no down payment. The reality is that you can’t get a car insurance policy without making some payment first. It only means that you will be getting same-day auto insurance. Also, it may just mean that you don’t need to make full payment of the premium for the year immediately.
Auto insurance may also advertise “no down payment” when talking about a monthly payment where you need to pay as you go. However, keep in mind that every car insurance company will require you to pay before your policy is in effect. To some insurers, this may be referred to as a deposit or no down payment. But it is just the payment drivers make to put a new auto insurance policy into effect.
How Does a Car Insurance Down Payment Work?
Just like I have mentioned above, a down payment for auto insurance is the amount you pay upfront to kickstart your coverage. This initial payment will cover your first month, six months, or even a year of insurance. If you do not make this payment, your policy won’t be active. And you won’t be able to make any claims. Insurance providers request a down payment to manage some of the risk they take on by insuring you right away.
Although you need to make some payment to have your policy in place, you can just go for monthly payments. So that you can fit insurance into your budget. If you opt for this, your insurance provider may tack on installment fees. Usually, you can reduce these fees by enabling EFT payment.
For instance, let’s say you want to buy an auto policy with a premium of $1,200 per year. If you cannot pay the whole premium in full instantly, you may have the option to pay in installments monthly. Other payment options are semi-annually, quarterly, or in full.
How you can Get a Cheap Down Payment For Auto Insurance
It may not be possible to find an auto insurance policy with no down payment. However, there are ways you can lower the down payments and the insurance costs as much as possible.
Shop for quotes from various carriers
One of the easiest ways to find cheap auto insurance is to look around and compare quotes from various companies. Each carrier makes use of different factors to calculate the rates, such as your zip code, age, credit, vehicle mode and make, and your driving record. As a result of this, cost often varies. The most affordable company for one individual may be different for another completely.
Get the right coverage amounts
If you want to keep your car insurance costs down, avoiding paying for coverage you don’t need is a good option. If you have your vehicle in storage or you don’t drive regularly, you can qualify for low rates. And if you own an old vehicle, you may not need to choose full coverage.
Discounts
Auto insurance providers often offer various discounts for their policyholders. When getting a quote, ensure that you ask for discounts that can help reduce your premium. Many carriers provide a bundling discount. If you bundle your auto policy with a life, home, or renters insurance policy from the same insurer, you can save money on the two policies.
Adjust your coverage types, deductible, or coverage amounts
In order to get the cheapest auto insurance policy, you can purchase only the minimum coverage your state requires. Just keep in mind that this means you might not be fully covered. If you are responsible for an accident, you could end up paying out of pocket.
However, if you have collision and comprehensive coverage, another way to save is to raise your deductible. This will help lower your monthly premium. But it also means you’ll get less money from the insurer when you make a claim.
Consider usage-based or pay-per-mile car insurance
Many insurers now provide alternatives to the regular auto policy. And some individuals may find them to be more affordable. Pay-per-mile auto insurance rates are usually based on the miles you drive. Usage-based car insurance is based partly on your driving habits, such as acceleration, speed, and the miles driven, in order to determine your risk.
Safe drivers will get low car insurance premiums. Typically, both require policyholders to make use of telematics devices that track their driving. And this may not be a good option for everyone. If you are considering any of these plans, speak to your insurance company or agent to know if it is a good fit for your needs and budget.
