$20 Down Payment Car Insurance: Is It Possible?
It’s possible to find low-down-payment car insurance, but generally only the safest, most-qualified drivers will be able to start a policy for around $20.
Excellent
Why you can trust Insurify: Comparing accurate insurance quotes should never put you at risk of spam. We earn an agent commission only if you buy a policy based on our quotes. Our editorial team follows a rigorous set of editorial standards and operates independently from our insurance partners. Learn more.
Can you get car insurance for $20?
Most drivers are unlikely to get car insurance for only $20 down. Any insurance company offering a down payment this cheap may be trying to scam you — most insurers typically charge the first month’s payment to activate your policy.
This first payment is known as a down payment, and the cheaper your premium is, the lower your down payment will be. Only drivers with long histories of safe driving, good credit, and multiple other positive rating factors are likely to qualify for monthly rates in the $20 range.
You may also see no-down-payment car insurance advertised. This is also likely a scam; you should be wary of any insurance companies offering it. Almost every auto insurance company requires some money down with an application, typically a low down payment of the first month’s premium or whichever payment method you select.
If you live in Arizona, Illinois, Missouri, New Mexico, Texas, Washington, or Wisconsin, you may be able to find a lower down payment through OCHO. The agency works with multiple auto insurers and helps drivers cover down payment costs with zero-interest loans. Policyholders repay the loans, plus an $80 broker fee, in small increments every two weeks as part of their regular premium payment.
How car insurance down payments work
Almost every insurer requires a car insurance down payment, sometimes called a deposit or a binder. It’s the amount you need to pay to activate your coverage. The amount of your down payment depends on the term you select (monthly, quarterly, semi-annually). For example, if your monthly premium is $100, your down payment will be $100.
Insurers require a down payment to protect themselves financially.
What is no-down-payment car insurance?
No-down-payment car insurance doesn’t really exist, and you should steer clear of insurers offering it. Some may try to rephrase “down payment” as “deposit” and claim that it’s only an application fee, but it’s effectively the same thing as a down payment. Put simply, you won’t get reputable insurance without putting at least a little money down.
How to lower your down payment
The best way to get a low deposit is to find cheap car insurance so that your initial payment will be as low as possible. Fortunately, you have many ways to do this.
1. Maintain a good driving record
Many factors affect car insurance premiums, and your driving history is one of the most important. Insurance companies charge more for high-risk drivers with infractions like speeding tickets, reckless driving, at-fault accidents, and DUIs. These violations can increase the likelihood of a driver filing a claim.
Insurers often reward good drivers with discounts. So practicing safe driving habits and remaining claims-free can help lower your car insurance premium.
The following table illustrates the effects moving violations can have on minimum-coverage car insurance rates from some top companies:
2. Compare car insurance quotes
Just as you would comparison shop for a car, it’s a good idea to compare car insurance quotes. Prices, discounts, and coverages can vary significantly among insurance companies. Comparing quotes from multiple insurers can help you find the best rates for the coverage you need.
You have multiple options for comparing quotes. You can work with an independent agent, use an online quote-comparison tool, or get quotes directly from insurers.
3. Look for discounts
Most insurers — but not all — offer multiple discounts to help drivers save. Check out discounts for good driving, going paperless, bundling your home or renters insurance with an auto policy, getting good grades in high school or college, and more. Ask your insurer about what discounts you may qualify for when you apply for insurance coverage.
4. Consider pay-as-you-go insurance
Traditional car insurance charges you a flat premium that you either pay in installments or in a lump sum at the start of the policy. Pay-as-you-go auto insurance bases your monthly premium on a set base rate plus a per-mile charge, so your monthly payments depend on how many miles you drive.
Pay-as-you-go car insurance can be a money-saver for people who don’t drive much, like remote workers or seniors.
Hugo offers flexible on-demand, short-term car insurance. If you aren’t a frequent driver, its policies may help you save on car insurance costs.
5. Purchase liability-only coverage
Liability-only car insurance — often called “minimum coverage” — is the cheapest type of auto insurance policy you can buy. But it’s not for everyone.
If you have a vehicle lease or loan, the leasing company or lender will require you to buy full coverage, which includes collision and comprehensive coverages. And even if you own your car outright, full coverage is a good idea if you have a newer or high-value vehicle or wouldn’t be able to pay for repairs or to replace it out of pocket.
$20 down car insurance FAQs
Finding affordable car insurance can be difficult. Check out the additional information below about $20 down car insurance.
Can you get car insurance for as low as $20?
You probably can’t get a car insurance policy for as little as $20 down or even $20 per month. But if you have a clean driving record and other favorable rating factors, you may be able to find minimum coverage for less than $30 per month.
Is it normal to pay a down payment on car insurance?
Yes. It’s normal to pay a down payment for your car insurance. It’s typically equal to the first month’s premium. Some insurers or agents may refer to it as a “deposit,” but it really means the same thing as a down payment or up-front money. You must pay it for the insurer to issue you coverage.
Why is my car insurance down payment so high?
Your total car insurance premium, the insurance company, and your personal driver profile affect how much your down payment will be.
If you have driving infractions like speeding, are a new driver, have a history of claims, live in a high-risk ZIP code, have a poor credit history, or drive a high-value vehicle, your car insurance premium will be higher. That means your down payment is also likely to be higher, even if your insurer requires only the first month’s premium as a deposit.
Which insurance company doesn’t require a down payment?
Every reputable car insurance company will require some deposit to initiate a policy. Depending on the company and your personal circumstances, you may only have to pay the first month’s premium as a down payment. Some companies may charge a higher down payment if they consider you or your vehicle a higher risk.
Do you need car insurance?
Car insurance is mandatory in every state except New Hampshire.3 Minimum coverage amounts and coverage types vary by state, but nearly every state requires liability coverage for property damage and bodily injury.
How much car insurance do you need?
You’ll need to carry at least your state’s required minimum liability coverage. Whether you need any additional coverage depends on how you drive. Consider how frequently and how far you drive, who you drive with, and when you drive when selecting your coverages and amounts. If you’re unsure how much you need, talk to an insurance agent.
)
)
)
){kind=logo}
){kind=small}
){kind=small}
){kind=small}