Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors.
If you own a car, you know that car-related expenses can add up quickly. In addition to the purchase price of a vehicle, car owners must regularly pay for maintenance, registration and insurance.
In most states, drivers must purchase an auto insurance policy that meets at least the state’s minimum coverage requirements, but it’s a better financial decision overall to purchase more than the minimum.
The national average cost of full-coverage auto insurance is $1,569 per year, according to a Forbes Advisor analysis of auto insurance rates. At this price, the cost of a car insurance policy can make a big dent in the average driver’s budget.
If you can’t afford to pay for six or 12 full months of auto insurance up front and want cheap auto insurance with no down payment, here’s what you need to know.
Can I get cheap car insurance without a down payment?
When buying car insurance, you may come across companies that advertise car insurance policies with no down payment. A no deposit policy may seem like a cheap way to get insurance, but the truth is, you can’t get auto insurance without making a payment first.
All auto insurance companies will require payment before your policy is “in-force,” which means coverage is in effect. To some this may be thought of as a down payment or down payment, but really it is simply the payment required to initiate a new car insurance policy.
Although you have to pay a certain amount of money to purchase auto insurance, you can usually opt for monthly payments to help you fit the insurance into your budget. If you do, your insurer may add a payout fee. You can usually reduce these fees by authorizing EFT payments.
How do car insurance payments work?
You cannot afford to pay a certain amount of money to activate your car insurance policy.
For example, suppose you want to purchase a comprehensive auto insurance policy with an annual premium of $1,200 per year. If you can’t afford to pay the full $1,200 right away, you probably have the option of paying in monthly installments.
Other typical payment options are quarterly, half-yearly, and full.
Tips for finding cheaper car insurance
You may not be able to find cheap car insurance without a down payment, but here are ways to keep your car insurance payments as low as possible.
Look around for quotes from several insurers
One of the best ways to find cheap auto insurance is to shop around and compare quotes from at least three companies.
Each car insurance company uses different factors to calculate a rate, including your driving record, vehicle make and model, zip code, age, and credit.
Therefore, rates often vary, sometimes drastically, from company to company. The cheapest company for one driver may be completely different for another.
Related: Compare car insurance quotes
Ask about discounts
When shopping for coverage, make sure the quotes you’re comparing reflect any car insurance discounts you qualify for. There are more than a dozen common discounts, including those that offer price reductions for buying multiple policies from the same company, being claim-free for a certain period of time, or having a vehicle with certain safety features.
Adjust your deductible, coverage types or coverage amounts
You can get the lowest car insurance rate possible by purchasing minimal coverage, as long as you are aware of the risk of being underinsured. For example, you can purchase only the minimum auto insurance required by your state. The trade-off is that you’re still responsible for other people’s bills if you cause an accident.
If you have collision and comprehensive coverage, you may also want to consider increasing your auto insurance deductible. A higher deductible will reduce the cost of your premium. Keep in mind that a higher deductible means you will get a lower payment if you have a collision or comprehensive claim.
Related: How much auto insurance do I need?
Consider pay-per-mile or usage-based car insurance
Many car insurance companies now offer alternatives to traditional car insurance, and some drivers may find them more affordable.
Car insurance rates per kilometer are based on the number of kilometers you travel.
Usage-based auto insurance bases rates in part on your driving habits, including speed, acceleration, braking patterns and miles driven, to determine your risk. Safe drivers could see their car insurance costs go down.
Both options typically require drivers to use a telematics device that tracks their driving, which may not be suitable for everyone. If you’re considering either type of plan, talk to your insurance agent to see if it’s right for your needs.
Ditch the sports car
Sports cars are generally among the most expensive cars to insure. For example, the Audi R8, Dodge Charger and Toyota GR86 are among the most expensive vehicles to insure, according to a Forbes Advisor analysis of rates.
Best car insurance companies 2022
With so many choices for car insurance companies, it can be difficult to know where to start to find the right car insurance. We’ve rated insurers to find the best car insurance companies, so you don’t have to.