No-Down-Payment Car Insurance (2025)
No-deposit car insurance doesn’t actually exist, but you still have plenty of opportunities to get very cheap car insurance.
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Almost every reputable car insurance company will require some sort of deposit or down payment before providing you with coverage. But if you’re strapped for cash, some insurers require only the first month’s premium as a deposit, rather than a separate fee.
You can find other ways to save money on car insurance — including discounts, payment plans, and comparison shopping — to get the lowest rates available to you.
Quick Facts
If you choose to pay for your new car insurance policy in installments, the insurance company will require a down payment to initiate the policy.1
Your down payment may be the first month’s premium paid in advance or a percentage of the total premium.
A down payment counts toward your total premium. It’s not an additional fee.
What to know about very cheap car insurance with no deposit
Car insurance with no deposit or down payment doesn’t exist, as insurers don’t want to take on the risk of insuring you without some sort of payment.
The misconception of no-deposit car insurance may come from the differences in down payment amounts among companies and for different drivers. Deposit amounts can vary based on many factors, including the insurance company, your state, driving history, credit history, and more.
For example: Let’s say your insurer last year only required you to pay the first month’s installment as a down payment. But this year, you got into an at-fault accident, and now your new insurer wants more than one month’s premium as a deposit.
You may think the deposit amount is your first month’s premium plus an added fee — but it’s really just a higher percentage of the total premium.2
Why do insurance companies require a down payment?
Insurance companies require a down payment because it protects them from significant risk during the first month of the policy. When you sign up for car insurance coverage, your insurer is agreeing to take on financial responsibility for various claims outlined in the policy, so it needs a deposit or down payment to offset that risk.
Is no-deposit car insurance a scam?
You should be wary of any car insurance company offering no-deposit car insurance. No reliable insurance company will give you a policy without some sort of down payment.
Keep an eye out for insurance companies that require the first month’s payment as a deposit rather than a separate charge. They may advertise the policy as “no deposit” or “no down payment car insurance” since the money goes toward your policy costs, but you’ll still need to pay this money before your coverage kicks in.
Important Information
If a company claims to offer true no-deposit or zero-down car insurance without requiring any money up front, it’s likely a scam. No matter where you buy your insurance, it’s smart to read reviews and check ratings before committing to a policy.
How to lower your down payment
If you want to find the best deal on car insurance and lower your down payment, you can do a few things to save money. Follow these tips to decrease your deposit and monthly premium:
Compare multiple car insurance quotes from different companies.
Consider pay-as-you-go insurance.
Ask for discounts.
Consider liability-only coverage vs. full coverage.
Compare multiple car insurance quotes
You should always compare car insurance quotes before buying a policy. Every insurer calculates rates differently, and each driver has unique characteristics, such as their location, driving record, and age, so insurance premiums can differ drastically. The cheapest car insurance company for you may be different from the cheapest option for your parents, for example, given their age.
Since most insurers will ask for the first month’s premium as a deposit, finding very cheap car insurance through quote comparison can lower your down payment.
Consider pay-as-you-go insurance
If you don’t drive much, you may benefit from pay-as-you-go or pay-per-mile insurance. These types of insurance are similar, though not entirely the same.
Pay-as-you-go insurance — also known as usage-based insurance — charges you based on how much and how well you drive.3 Pay-per-mile insurance charges you based on how many miles you drive on top of a base rate.
These types of policies typically have lower down payment requirements. But they’re not without risk. You may not get the same level of coverage as you would with typical full-coverage car insurance. With pay-as-you-go insurance, the insurer can even penalize you for poor driving, so consider how carefully you drive before signing up.
Here are the top insurers for pay-as-you-go car insurance.
Mile Auto: Best for pay-per-mile coverage
Nationwide: Best for safe drivers
Ask for discounts
Most car insurance companies offer a variety of car insurance discounts. Consider your situation and which offers you may qualify for, such as good student, loyalty, clean driving record, and defensive driving discounts. Ask your insurance agent to check for you, or research an insurer’s website to learn which discounts it offers.
Some common auto insurance discounts include:
Consider liability-only coverage vs. full coverage
Consider reducing your coverage level. Liability car insurance costs significantly less than full coverage. But it won’t cover damages from collisions or weather damage.
Liability coverage is only good for people who don’t drive frequently or can afford to pay vehicle expenses out of pocket. If you drive a lot and wouldn’t be able to pay for significant vehicle repairs, you should probably carry full coverage. If you took out a loan to pay for your car or lease it, your lender or leasing company will require you to carry full coverage anyway.
The following table illustrates the difference between the national average costs of liability-only policies and full-coverage car insurance.
Monthly Average: Liability Only | Monthly Average: Full Coverage |
|---|---|
| $103 | $182 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
No-deposit car insurance FAQs
If you’re on a budget, it’s possible to find affordable car insurance. Here’s some additional information that might help as you research different policies to find the best rates.
Every car insurance company will require you to pay something toward your coverage when you enroll in a policy. How much you have to pay up front will depend on multiple factors, including the insurance company, the payment plan you choose, your driving history, age, gender, and more.
Yes. You’ll have to make a payment to enroll in a Progressive car insurance policy. If you decide to pay on a monthly basis, your first month’s payment might qualify as your down payment. Keep in mind, many insurers offer a discount if you pay the entire year’s premium in advance.
Yes. Hugo is a legitimate car insurance company that offers coverage for as little as three days at a time. It has no down payment or up-front fees, although you’ll have to pay an initial premium when you start a Hugo policy. Hugo is available in 15 states.
You’ll always have to pay something up front when you buy a car insurance policy. Usually, it’s a deposit based on the payment plan you choose. Your deposit is often your first month’s premium. If you buy a short-term policy from Hugo or Seven, you’ll have to pay the entire premium up front. And while Ocho allows you to finance your down payment interest-free over the life of your policy, you’re still technically paying a deposit.
Yes. All reputable insurers require some form of payment up front before you can get coverage. This is a way for insurers to reduce risk. You can expect to pay a lump sum that covers a down payment or your first monthly payment.
Every car insurance company requires a down payment in the form of the first month’s premium. But many car insurance companies don’t require a secondary deposit on top of the initial premium, including:
This list is not exhaustive, so it’s a good idea to contact a car insurance company directly if you have questions about its down payment requirements.
COUNTRY Financial and Auto-Owners are the cheapest car insurance companies, according to Insurify data. But not every driver may be able to get coverage from these companies.
If you’re on a tight budget, it pays to shop around for affordable rates and cheap car insurance. State Farm and GEICO are two nationally available insurance companies that offer some of the cheapest policies, so getting quotes from them is certainly a good start.
Every driver is unique — rates depend on different factors, like your driving record, credit history, and ZIP code. Good drivers typically pay lower rates, while senior drivers and young drivers may pay more. You may find cheaper insurance with another company, so always compare quotes from multiple insurers before buying a policy.
OCHO is a legitimate car insurance company that helps drivers manage their down payment costs through no-interest loans. The loan can cover some or all the cost of an initial down payment. Policyholders repay the loan, plus an $80 broker fee, as part of their monthly premium payments. OCHO is currently available in Arizona, Georgia, Illinois, Texas, Missouri, New Mexico, Washington, and Wisconsin.
It’s possible to find lower-cost full-coverage car insurance. Maintaining a clean driving record and healthy credit history and choosing an inexpensive, safe vehicle can help lower your car insurance premium. Comparing full-coverage car insurance quotes from multiple insurers can also help you find a lower-cost policy.
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