You may have seen “no fee” or “no down payment” plans promoted while browsing around for new auto insurance policies. These policies will sound fantastic and are formulated to appear to save you a lot of money, at least in advance. One of the most popular choices is very cheap car insurance with no deposit. This allows customers to get covered right away without making a big deposit payment.
However, careful analysis of these policies also shows that they do not save you money in the long run. Instead, they can cost you more money and not a lot of insurers offer these no deposit plans.
What Is No Deposit Car Insurance?
No deposit auto insurance will split the premium into monthly installments but does not require a traditional down payment for the policy to start. However, it’s important to note, the customer must make an installment payment first before the policy becomes active. New insurance policy installment payments often equate to about less than 5% of a person’s monthly income.
Qualifying for No Down Payment Car Insurance
When it comes to applying for auto insurance with zero down payment, providers have certain criteria that must be met. The requirements for those wishing to pay their insurance in monthly installments are listed here.
- Good Driving history
- Having an excellent credit score
- The driver is in the lowest risk category
- Drive a lower risk vehicle
- Drive fewer than 800 miles per month
The Requirement of No Deposit Car Insurance
Customers lacking enough money for a down payment, are often drawn to very cheap car insurance with no down payment plans. For some, the possibility of getting insured hinges on these types of low deposit policies.
The reality is not everyone will qualify for a zero-down policy, and not every state offers these types of policies. If a driver can’t get zero deposit coverage, then there are alternatives like $20 down payment auto insurance.
In short, the lower a risk a driver poses to an insurer, the lower both the premiums will be and the upfront deposit amount. Carriers are in the risk management business. Each motorist is carefully analyzed for their potential risk.
For example, if a driver has a DUI on their record, many companies will not insure them. Furthermore, it will be almost impossible for a high-risk driver to get insured without making a big down payment amount.
Car insurance policies can often be paid monthly. When you buy a policy, you have two choices. Pay the total premium in full and upfront, or break it into convenient monthly payments. Insurance providers only charge a small amount to break the policy up into installment payments.
In fact, paying the policy in full only saves about 2% to 3%. From a financial standpoint, it makes sense for many to make installment payments. Also, if someone finds a cheaper rate, it’s a bit easier to cancel the policy knowing that you won’t be owed a giant refund.
Paying for Your Low Deposit Auto Insurance Policy
There are multiple payment options available to you when you buy a policy. The most popular ones are monthly installment payments. For very cheap auto insurance with no deposit, your first payment will be considered your deposit amount. Here are a few popular choices.
You are going to pay the entire premium in full. You don’t have to pay any interest and you will get a nice discount of between 2% and 3%.
A direct debit is n option that many people take advantage of. Many insurers even let you set up payment on the date of your choice. Once you have set up your payment info and date, the installment payment will then automatically debit your account each month. If you want to pay for the premium balance, you can do so at any time.
Buying No Deposit Auto Insurance Online
Whatever payment you select on your current auto insurance package, make sure you compare several auto insurances quotes first. Today finding the cheapest auto insurance rates with the lowest deposit requirements is easier than ever before thanks to the internet.
You can use your smartphone or any device hooked up online to compare quotes from dozens of insurers in only a few minutes. If you need very cheap car insurance with no deposit, then you can find the specific insurers that offer those deals online.
It’s smart to compare at least five quotes and preferably ten before you buy a specific policy. You can also call a licensed agent or broker to get free auto insurance quotes over the phone. They can tell you what insurers they work with that offer no or low-deposit auto insurance plans. Get the coverage you need today with the lowest deposit.