Cheap No-Deposit Auto Insurance (2024)
You've most likely heard all manner of advertising for buy now pay later car insurance. Now find out from our experts exactly what it is, its pros and cons, the providers who offer it, its actual cost — which averages $264 a month — and the best ways to get cheap no-deposit auto insurance.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
UPDATED: Oct 13, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Oct 13, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Some companies offer cheap car insurance with no deposit, and you’ll pay $264 monthly for it on average
- Usually, “buy now pay later car insurance” options cost more in the long run
- Since you can usually only get a liability policy with zero-down auto insurance, it might be right for you if you only need minimum coverage
No-deposit auto insurance seems attractive if you’re shopping for cheap auto insurance. After all, if you can save money on auto insurance, why not? The truth is that most auto insurance companies require some sort of down payment or deposit. On the other hand, you may pay higher rates if you opt for the “need car insurance now pay later” method.
We’ll overview the best no-deposit auto insurance companies offering cheap no-deposit auto insurance rates and coverage options you need.
Understanding No-Deposit Auto Insurance
Some companies offer cheap no-deposit auto insurance without requiring an upfront payment. Providers may advertise a product as “buy now pay later car insurance,” “no down payment insurance,” or “no-deposit insurance,” but it all means the same. Does it work out cheaper, though?
Most insurance companies charge a deposit or down payment to express good faith, usually a percentage of the annual premium and not an extra charge. This practice protects your insurer from drivers who may only purchase one month to get proof of auto insurance but default on later payments since companies offering no-money-down auto insurance assume a risk.
Insurance companies base rates on a risk-to-reward principle, meaning the risk gets offset some other way. Ultimately, it also means paying more for “cheap” insurance.
Imagine you receive two quotes for similar policies with different payment structures. The first seems to be a good deal, costing $134 monthly to insure your car. This policy includes a 20% deposit, so you’d pay around $320 upfront.
On the other hand, the “buy now, pay later” policy has monthly rates of $150 but requires no down payment or deposit. So, in reality, no-deposit car insurance can become more expensive in the long run.
If you're an active or retired military member or family member, USAA is your best bet for cheap no-deposit auto insurance. But if USAA isn't an option, try Geico.Kristen Gryglik Licensed Insurance Agent
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Cheap No-Deposit Auto Insurance Rates
You can find the cheapest car insurance now pay later by comparing rates from various companies offering it. The cost for no upfront deposit auto insurance varies for several reasons, including company, demographics, and driving profile. You’ll pay about 22% more for zero-down auto insurance than car insurance with a deposit.
Check out the table below to compare no-deposit car insurance quotes from the best car insurance companies:
No-Deposit Auto Insurance Monthly Rates by Company
| Companies | No Down Payment Rates | Rates After 10% Deposit | Rates After 20% Deposit |
|---|---|---|---|
| USAA | $161 | $145 | $129 |
| Geico | $179 | $161 | $143 |
| American Family | $224 | $202 | $180 |
| Nationwide | $229 | $206 | $183 |
| State Farm | $235 | $212 | $188 |
| Progressive | $283 | $254 | $226 |
| Travelers | $287 | $259 | $230 |
| Farmers | $288 | $260 | $231 |
| Allstate | $318 | $286 | $255 |
| Liberty Mutual | $398 | $358 | $318 |
As you can see, USAA auto insurance offers the cheapest pay later car insurance rates, averaging $161 monthly, though only military members and their families qualify for coverage. The next most affordable no-deposit car insurance company is Geico auto insurance, with average monthly rates of $179.
Compare insurance now pay later quotes by company to find the cheapest no-deposit car insurance.
Read more: Factors That Affect Auto Insurance Rates
No-Deposit Auto Insurance Coverage Options
Insurance companies are different, so you must talk to your agent to determine what you can afford. However, no-deposit car insurance likely won’t offer more than liability coverage.
Each state has minimum auto insurance requirements, but it only covers damages to the other party and their vehicle after an accident up to a certain amount. The only way to protect yourself and cover all damages, no matter who is at fault, is to purchase full coverage auto insurance.
Some types of auto insurance that offer increased coverage are:
- Collision coverage: Collision auto insurance covers the cost of damages to your vehicle if it is involved in most types of collisions.
- Comprehensive coverage: Comprehensive auto insurance pays for non-collision damages to your vehicle.
- Personal injury or medical coverage: Personal injury protection auto insurance and medical payments auto insurance policies cover the medical expenses for the driver and passengers, regardless of fault.
You likely won’t get full coverage auto insurance if you want zero-down auto insurance, but you can look for ways to lower your rates for auto insurance with no upfront payment and find the coverage you need. Read more about collision vs. comprehensive auto insurance.
Ways to Get Cheap No-Deposit Auto Insurance
There are several ways for policyholders to locate very cheap car insurance no deposit. Follow the tips below if you’re looking to lower your no-money-down car insurance rates:
- Ask for auto insurance discounts from your insurer.
- Enroll in safe driving programs.
- Buy an affordable vehicle to insure. Check out our article, Which cars have the lowest auto insurance premiums?
- Learn how to save money by bundling insurance policies.
To find the cheapest no-deposit car insurance, shop and compare coverage options for rates you can afford and to save money in the long run.
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Deciding if No-Deposit Auto Insurance Is Right for You
Cheap no-deposit auto insurance doesn’t always work out to be more affordable in the long run. So, it’s important to do the math when comparing rates online for the “need car insurance now pay later no deposit” option to ensure you’re not actually paying more.
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— AutoInsurance.org (@AutoInsurance) June 5, 2023
Consider the long-term benefits of increased coverage if you can afford it, and do what you can to lower your rates so you have increased options. The bottom line is that you can find the balance of great coverage at affordable rates.
Frequently Asked Questions
Can you get pay later car insurance?
Many auto insurance companies offer coverage with no upfront payment alongside flexible monthly or annual payment plans.
Can you get no money down car insurance in Georgia?
No, you can’t obtain car insurance in Georgia without paying something upfront. But you can minimize the cost of coverage in Georgia, which ranks 41st for the cheapest car insurance rates in the U.S.
What companies let you get buy now pay later car insurance?
Companies like Geico and State Farm allow you to purchase no money down car insurance.
Why do auto insurance companies ask for a down payment?
Auto insurance companies ask for a down payment to mitigate the risk associated with insuring a car, and ensures the driver assumes financial stake in the policy. Since no-deposit auto insurance assumes a higher risk level, you’ll generally pay more over time for zero-down auto insurance.
How does cheap no-deposit auto insurance work?
Cheap no-deposit auto insurance is a type of auto insurance where policyholders don’t need to pay a deposit. However, no-deposit car insurance quotes are generally more expensive than auto insurance with an upfront deposit.
Is cheap no-deposit auto insurance available for all drivers?
Cheap no-deposit auto insurance availability varies by company, location, driving history, and credit score. So, contact an insurance company representative to see if they offer cheap car insurance with no deposit.
Are there benefits to choosing cheap no-deposit auto insurance?
Cheap no-deposit auto insurance allows policyholders to avoid large, upfront costs when signing up for coverage if they can’t afford a deposit.
Is cheap no-deposit auto insurance worth it?
Deciding whether cheap no-deposit auto insurance is right for you depends on your circumstances and preferences. While auto insurance with no upfront payment helps reduce upfront costs, you should consider long-term costs, coverage options, and potential fees since no-deposit car insurance has higher rates.
Are there any drawbacks to cheap no-deposit auto insurance?
While cheap no-deposit auto insurance can be beneficial for some individuals, there are a few potential drawbacks to consider. One drawback is that spreading out your premium payments over time can result in higher overall costs due to additional fees.
Additionally, if you miss or are late on payments, it can result in a lapse of coverage and potential consequences.
What are the advantages of no-deposit auto insurance?
The advantages of no-deposit auto insurance include the ability to start your coverage without a large upfront payment. This can be helpful if you’re on a tight budget or prefer to spread out your insurance costs over time. It offers more flexibility in managing your expenses while maintaining your auto insurance coverage.
Will my credit score impact my eligibility for no-deposit auto insurance?
Some insurance companies may consider your credit score when determining eligibility for no-deposit auto insurance. Your credit score can be used as an indicator of your financial responsibility.
However, not all insurance companies use credit scores as a factor, so it’s best to check with individual providers to understand their specific criteria.
Can I cancel my no-deposit auto insurance policy?
Yes, you can usually cancel your no-deposit auto insurance policy, but the specific cancellation process and any applicable fees may vary depending on the insurance company.
It’s important to review the policy documents or contact your insurance provider directly to understand the cancellation process and any potential costs involved.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.