How to Get Auto Insurance with Low or No Down Payment

Last Updated on May 8, 2020

If you’re a car owner, having insurance is mandatory. But if you have already spent a lot on your car, paying the full premium for your insurance, especially while managing other expenses, is not always easy. While you cannot wriggle out of buying insurance, you can always find a way to make the process easier and less pressurizing on your pocket. Here’s how:

What Is No Down Payment Car Insurance?

low or no down payment auto insuranceNo down payment auto insurance is a great way for middle-income car owners to save some money. When you go out to buy car insurance, you will be provided with a few options. You can either pay the full premium in total upfront or pay for your insurance premium in monthly installments instead. While if you pay the full amount upfront you may be able to avail a discount but not everyone has that kind of cash to pay a lump sum. Making monthly payments is easier on the wallet and allows you to arrange for the money with less pressure.

The monthly payment option may still require you to make an initial down payment as a promissory – typically two months of coverage. But if you’re having trouble arranging for cash to pay upfront, even a down payment of two months coverage may impose a financial constraint. This is where you can find insurance deals that allow you to waive the down payment fee.

It typically works by using your first monthly payment as your down payment, thereby reducing your immediate out-of-pocket expenditure.

States That Offer No Down Payment Insurance

To begin with, you must figure out what kind of insurance you want. While getting liability coverage is mandatory in every state, full coverage is optional. Liability coverage covers the injuries or damage done to third parties or their properties. To protect your own vehicle you will need to get collision coverage and comprehensive coverage, which is available in the spectrum of the full coverage option. But what is important to remember is that the option of getting no or low down payment insurance is not always available everywhere in the United States. Insurance providers in certain states are known to offer this option. Some of these states include:

  • New York
  • Arizona
  • California
  • Florida
  • Georgia
  • Washington
  • Oklahoma

If you own a car in one of these states, the best thing is to simply give the insurance agency a call and confirm if such a policy is available. Comparing quotes online is also a wise thing to do as you may get a wider spectrum of more reliable information than by speaking to a single insurance agent.

How Do You Qualify for Such Policies?

There are several factors that help you qualify for a no or low down payment insurance policy. Your insurance premiums are typically decided based on your driver risk.

There are preferred-risk drivers, standard-risk drivers, and high-risk drivers. Depending on what your driver risk is, the insurance company will decide on a suitable premium. The greater your driver risk, the more the chances you may have to pay more for your insurance. Having a high driver risk may also limit your chances of getting a no down payment insurance policy.

If you have a poor credit history, insurance providers may find it too risky to offer you a policy with zero or low down payment. They will require some kind of assurance that you can make timely payments. But if your credit scores do not reflect that, they are less likely to take that chance with you.

The type of car you are driving also determines what kind of policy you qualify for. If yours is a new and expensive car, the insurance providers may be hesitant to offer you a no down payment policy option. New and more expensive cars are a bigger risk to an insurance company. But if you’re driving an older car, a no down payment option presents a lesser risk for the company.

A few other factors include your gender, marital status, and age. Your location, of course, since not all states offer a no down payment option. But most importantly, it depends on the insurance carrier and the kind of policies that they offer.

How to Find the Cheapest No Down Payment Policy?

Before you sign any document regarding insurance, ensure you have at least three competitive quotes for the same policy. The way to strike the best bargain is to compare quotes and pick the ones that suit your needs the best. The following are some other ways you can negotiate a good price:

Improve Your Driver Risk

This cannot be stressed enough but you need to have a good driving ethic, not just so you can get a good insurance rate and policy but for the general safety of your own and of those around you. A pristine driving record can bring your insurance rate down by a considerable amount.


Your driver risk can also be reduced if you use your car less frequently. Try to use public transportation or carpool with a friend to go to work. Not only will you be doing your bit to save the environment but the lesser you average in a month, the cheaper your monthly insurance rate can get.

Find the Loopholes

Do your research and find all the discounts and freebies you can get from the insurance company. Ask for discounts if you’re a military veteran, a student, a multi-car household, etc. There may be several offers and discounts the company may be offering, find one that suits you.

Automated Payments

In total, your no down payment monthly insurance may actually cost more than an annual premium you pay in full. It is simply a drawback of availing the perk of monthly installments. If you set up automatic monthly payments, however, your monthly premium can be brought down by a large amount.


If possible, try to increase your deductible. The deductible is the amount you will have to pay in the event of an accident where the fault is proven to be yours. By increasing your deductible, the policy rate invariably becomes lower. This, however, is not something everyone can afford.

Final Thoughts

Finding the right kind of insurance provider is of the utmost importance. You need someone who will back you up and not take you for a ride. The best thing to do is to carry out thorough research, talk to experts, compare quotes and policies and then make an informed decision. It’s important to ask a lot of questions – it is, after all, your hard-earned money and if you can find a way to retain more of it in your bank account, there’s nothing like it.

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