How To Get Car Insurance With No Deposit

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No reputable insurance provider will activate your auto insurance policy before you make an upfront payment. However, a company advertising “no-deposit car insurance” may only require you to pay your first premium without any extra charges to activate your policy. In general, low-risk drivers are most likely to get cheap full coverage auto insurance with no down payment in the form of a surcharge.

Keep reading to learn how you can get very cheap car insurance with no deposit beyond your regular premium payments.

Key Takeaways

  • In general, you cannot purchase car insurance without an upfront payment of some kind.
  • No-deposit car insurance could include policies that begin once you make your first premium payment or policies that allow you to pay a smaller upfront payment in exchange for larger premium payments throughout your coverage period.
  • The riskier you are to insure, the more likely it is that an insurance company will add an extra charge to your first payment.
  • Driving safely, regularly paying your premiums on time and hunting for discounts will generally have a greater impact on the amount you pay for car insurance than whether you had to pay an extra deposit to activate your policy.

Can I Get Very Cheap Car Insurance With No Deposit?

You cannot receive car insurance coverage without first paying something, but your insurance company may not require a deposit besides your first car insurance premium payment. In some cases, your insurer may even let you make a lower down payment in exchange for paying higher premiums over the course of your coverage period.

You may also be able to avoid extra charges depending on how you choose to pay for your car insurance. For example, if you pay your premium in multiple installments, Geico adds an installment fee to each payment. However, if you pay your premium in full with one upfront payment, you will not have to pay any installment fees.[1]

Since you will generally have to pay something before receiving coverage from any reputable car insurance company, there isn’t exactly a clear-cut definition of “no-deposit car insurance.”

If you are interested in buying insurance from a company that advertises car insurance with no down payment, be sure to ask exactly how much you will be expected to pay to activate the policy.

How Does Car Insurance With No Deposit Work?

Oftentimes the upfront payment that activates your auto insurance policy is simply a portion of your premium, meaning the amount you have to pay initially does not always impact how much you end up paying for coverage overall. For example, Direct Auto Insurance may allow you to choose the amount of your down payment yourself and adjust your premiums accordingly.[2]

If you have enough money saved up, you could decide to pay more when activating your policy since it would lower the cost of your subsequent monthly payments. Alternatively, you could opt for a cheap car insurance deposit while you organize your finances and prepare for higher payments later on.

For example, Geico offers various payment structures based on how large of a deposit you make up front.[1]

Down Payment % for $1,000 Auto Policy

Down Payment Amount

Subsequent Payment Amounts



Make a single $500 payment after the second month



Make two monthly payments of $300 after the first and second months



Make three monthly payments of $250 over the next three months

Why Do Insurance Companies Require a Deposit?

The reason insurance companies demand an upfront payment is to offset the risk that you will get into a car accident and need to file a car insurance claim early on in your coverage period. This ensures that your insurance carrier does not have to spend any money on you before you have given any money to them.

Charging an initial payment to activate your car insurance policy also mitigates the risk of insurance fraud. For example, it prevents someone from activating a policy to show proof of insurance and then canceling their policy without actually spending any money. It also guarantees that someone cannot activate a policy, inflict intentional damages to their car and then receive an insurance payout without having invested anything into the policy themselves.

In some cases, insurance companies may also charge you extra to activate your policy simply to help them cover the administrative costs of running a business. For example, your insurance provider may require a higher initial payment to account for the time spent investigating your driving record and performing other aspects of the underwriting process.

Who Qualifies for No-Deposit Car Insurance?

Since the purpose of an increased upfront payment is to offset risk, you are most likely to qualify for no-deposit car insurance if your insurance carrier considers you a low-risk driver. As a result, if you have a history of practicing safe driving behaviors, paying your premiums on time and avoiding any car insurance lapses, you may only need to make your first premium payment to start receiving auto coverage.

Conversely, certain high-risk characteristics may make your insurer more likely to require a down payment that exceeds the cost of your normal premium payment. For example, if you have a poor credit record or require your insurance company to file an SR-22 or FR-44, you could have to pay more money to activate your policy.[2]

Other factors that could impact your eligibility for no-down-payment auto insurance include the state you live in, the car you need to insure, the types of car insurance and coverage limits you select and, of course, which company you buy car insurance from.[2] Be sure to talk to your insurance provider to determine whether you will need to pay anything other than a standard premium payment to begin your policy.

Which Companies Offer Cheap Car Insurance With No or Low Deposits?

You may be able to find cheap car insurance with no or low deposits from insurers like Allstate, Geico, Nationwide, State Farm and more. Since your down payment will often be the same as your first car insurance premium payment, the best way to get car insurance with a low deposit is to find the cheapest car insurance available to you.

Remember that car insurance providers each have their own formulas for evaluating risk, meaning one company may provide you with a more favorable rate than another. You can use an online insurance marketplace like SmartFinancial to easily compare quotes from multiple companies and find the insurance provider that can offer the most affordable car insurance for your circumstances.

How To Get Cheap Car Insurance With Low Deposits

As you look for cheap car insurance with low deposits, these are the steps you should take to shop for car insurance:

  1. Compile the necessary documents and information.
  2. Check the minimum coverage requirements for your state.
  3. Decide how much coverage you need.
  4. Compare quotes from multiple insurance providers.
  5. Ask the insurer you choose if you are eligible for any car insurance discounts.
  6. Purchase a policy that suits your needs and budget.

There are many steps you can take to save money on car insurance such as practicing safe driving habits, installing anti-theft devices, bundling multiple insurance policies from the same company, foregoing optional coverage types, raising your deductible and, in some states, improving your credit score.

In the long run, the cost of your premium will have a greater impact on how much you spend on car insurance than the amount you had to pay initially to activate your policy. While no-deposit car insurance may be appealing, if it comes with expensive payments over the course of your coverage period, you’ll likely be better off purchasing a policy with a cheaper premium even if it comes with an extra upfront charge.

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Why do car insurance companies need down payments?

Car insurance companies need down payments to offset the risk that you will get into an accident and file a claim early in your coverage period, minimize the potential for insurance fraud and cover the costs of underwriting a new insurance policy.

How much do car insurance down payments cost?

Your car insurance down payment will generally be your first premium payment or a percentage of your overall premium. However, your insurance company could add an extra charge to your first payment depending on your circumstances.

Should I avoid companies offering car insurance with no deposit?

A reputable company could use the phrase “no-deposit car insurance” to refer to a policy that is activated after your first premium payment or that can be activated with a low initial payment followed by higher premiums later on. However, a company is likely misleading you if it claims it can offer you car insurance without any upfront payment.


  1. Geico “Car Insurance Payments - How To Pay Your Bill.” Accessed April 26, 2023.
  2. Direct Auto Insurance. “What’s a Car Insurance Down Payment?” Accessed April 26, 2023.

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