Many drivers pay their insurance premiums on a monthly basis, skipping upfront fees entirely.


Let’s face it: Car insurance is expensive. While the price of your premium is mostly out of your control, you can usually find an auto insurance provider that fits your budget by doing a bit of research and comparing free quotes.

In this article, we’re going to discuss how to find very cheap car insurance, no deposit required. We’ll look at how insurance policies work, how they’re priced, and finally recommend a few providers known for low premiums and easy payment schedules.

Whenever you shop for car insurance, we recommend getting quotes from multiple providers so you can compare coverage and rates. In addition to the insurance company you choose, factors such as your age, vehicle make and model, and driving history can affect your premium, so what’s best for your neighbor might not be best for you.

Use our tool below or simply call (855) 518-0148 to start comparing personalized car insurance quotes:


In this article:

What Is No-Deposit Car Insurance?

To understand what a no-deposit car insurance policy is, you first need to understand how car insurance payments work. When you buy a car insurance policy, you typically have two options: Pay the entire six or twelve-month premium upfront in a single lump sum, or split it into monthly installments. Some companies have additional options like bimonthly or tri-monthly payments as well.

If you decide to pay the full cost of your car insurance premium outright, then no-deposit car insurance doesn’t apply to you. However, if you prefer to break up the cost of your premium and make your payments over time, then you may find that the first month’s payment is higher than the subsequent months – especially if you’re starting a policy with a new provider. On the other hand, the first payment for some companies, like Progressive, can actually be lower than the following payments.

Car insurance companies that increase the cost of the first installment may refer to that as a deposit, and it’s usually around 25 percent of the policy cost. When people talk about very cheap car insurance with no deposit, what they’re referring to is a policy that doesn’t require an increased payment for the first installment.

A Sample Policy With Geico

Let’s take a look at a quick example. Imagine you want to take out a policy with Geico, and your quote is $600 for a six-month policy. You can either pay the entire $600 right away or break it into installments. Returning Geico customers have the option to break up the premium into six equal payments, but new customers only have the option to break it up into two, three, four, or five payments.

Now, if you divide it into two or four installments, all your payments will be equal. However, if you break it into three payments, your first payment will be 40 percent ($240), and your second and third will each be 30 percent ($180). If you divide it into five installments, your first payment will be 25 percent ($150), and the following four payments will each be 18.75 percent ($112.50).

In this example, Geico’s six equal payments plan would be considered a no-deposit car insurance policy, while every other payment plan would be considered to have a deposit. That said, the increased payment is not technically a deposit, just a higher initial payment.

No-deposit car insurance isn’t a widely used term, and some companies say that there is no such thing in the first place. Because of this, it’s important to take caution and carefully vet any company that specifically markets themselves as a no-deposit car insurance company. These providers may be untrustworthy or even an outright scam.



Why Do Some Car Insurance Companies Require A Deposit?

Car insurance companies often require higher initial payments to reduce the risk of customers canceling before their term is over. The risk reduction is twofold: First, customers are less likely to cancel if they’ve already invested a significant amount of money. Second, if a customer does cancel, the insurance company will already have secured a decent portion of their premium.

For the most part, car insurance deposits only come into play if a customer is purchasing a policy with a new company or if they have a poor credit score. In both of these cases, the provider may ask for a higher initial payment to reduce risk.



How Do Auto Insurance Companies Determine Rates?

When searching for very cheap car insurance with no deposit, keep in mind that car insurance companies base your premium primarily on the following factors:

  • Your vehicle, including the year, make, and model
  • Your age
  • Your driving history
  • Your state

To see how these factors will affect your premium specifically, use the tool below or call (855) 518-0148 for free, personalized quotes.


Your Vehicle

The first of these is probably the most obvious: Car insurance usually includes coverage for damage to your car, so the item that’s being insured is going to play a major role in how much the policy costs. Think about it: If you get into an accident in a Tesla Model S, it’s going to cost a lot more than the same accident in a base-model Toyota RAV4. Furthermore, some cars have superior collision-avoidance or ant-theft systems that reduce the provider’s risk of insuring your car and consequently lower the cost of your policy.

Your Age

Although it may seem ageist, studies have shown time and time again that young drivers and very old drivers are much more likely to get into accidents than the rest of the population. Because of this, insurance rates are highest for motorists who are under 25 or over 70.

Your Driving History

Insurance companies make money by properly gauging risk, and while past performance is no guarantee of future outcomes, it’s the best predictor that an insurance company can have of how you’ll drive once you’re covered under one of its policies. If you have a clean driving record, you can expect a lower rate, but if you have lots of traffic violations or even a single recent accident on your record, your rate will be significantly higher.

Your State

Every state has different minimum auto insurance requirements, and that means the level of coverage you need to take out varies from state to state. While some states require only small amounts of liability coverage, others require bodily injury liability, property damage liability, personal injury protection, and uninsured/underinsured motorist coverage. The more coverage you need, the more your policy will cost.

Plus, every state has its own unique risk profile, so insurance companies will take that into account.



Can You Lower The Cost Of Your Deposit?

This is a tough question to answer. Remember: Agreement on whether car insurance deposits even exist is up for discussion. If you want to avoid a higher first month’s payment, the best idea is to pick one car insurance company and stick with it for a few years.

That said, if you’re looking for very cheap car insurance with no deposit, your best bet is to drive safely, live in a state with low minimum insurance requirements, and drive a safe car. It also helps to be over 25 years old but under 70.



Our Recommendations For Auto Insurance

Instead of looking for an insurance provider without a deposit, look for a provider that offers affordable premiums, period. If you purchase your policy from a company with reasonable rates, your monthly payment plans should be affordable.

To do so, you’ll need to look for cheap car insurance quotes from different companies and compare them. We recently reviewed the best car insurance companies in the industry. To help set you in the right direction, here are the insurance providers that we found to have the lowest average premiums and highest level of customer service.

USAA: 5 Stars

Out of all the providers we researched, we found USAA car insurance to have some of the lowest average premiums. But USAA isn’t just cheap – we gave the company five stars due to it’s high-quality customer service, wide variety of discount and reward programs, great coverage options, and superb mobile app.

Unfortunately, USAA auto insurance is only available to veteransactive military members, and their families, so most motorists won’t be able to take advantage of this company’s car insurance policies. However, if you are eligible for coverage from USAA, we highly recommend you get a quote.


State Farm: 4.5 Stars

For drivers who aren’t in the military, State Farm auto insurance is an excellent choice. Although State Farm’s average premium isn’t as low as USAA’s, the provider still has low average premiums and a variety of discounts available that can help you save money – including discounts for students, good drivers, and those with multiple policies or vehicles. In business since 1922, State Farm is the largest car insurance provider in the United States and also one of the most reputable.

Geico: 4.5 Stars

In general, Geico auto insurance has very reasonably priced insurance premiums. As the second largest insurance provider in the nation, the company has a strong financial base, meaning customers shouldn’t experience much difficulty getting claims fulfilled. We’re also fans of Geico’s highly-rated mobile app, which makes getting quotes, updating your policy, and filing claims quick and convenient.




FAQ About Cheap Car Insurance, No Deposit Necessary

Can I get car insurance with no down payment?

Many car insurance providers give drivers the option to pay for their policies in equal payment installments. Some companies only offer this convenience to existing customers, but others will extend the offer to new customers as well. This would be considered car insurance with no deposit.

Do you pay for car insurance upfront?

Motorists can usually choose between paying the full cost of their premium upfront or splitting it into monthly payments. Some providers require a larger first payment, while others give drivers the option to split the premium into equal installments.

Can you pay half of your car insurance?

Some car insurance companies are happy to accept two 50-percent payment installments for a policy. There are also options for monthly payments with six- or twelve-month policies. However, unless your policy is set up this way, you cannot pay only half of your bill due and expect to have coverage.

Use our tool below or call (855) 518-0148 to start comparing car insurance quotes:


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