Table of contents
- No-deposit insurance
- Is it a scam?
- Lower down payment
- Compare quotes
- Pay as you go
- Hugo
- Metromile
- Mile Auto
- Nationwide
- Reduce coverage
- FAQs
Table of contents
- No-deposit insurance
- Is it a scam?
- Lower down payment
- Compare quotes
- Pay as you go
- Hugo
- Metromile
- Mile Auto
- Nationwide
- Reduce coverage
- FAQs
Almost every reputable car insurance company will require some sort of deposit or down payment before providing you with coverage. But if you’re strapped for cash, some insurers only require the first month’s premium as a deposit, rather than a separate fee.
You can find other ways to save money on car insurance — including discounts, payment plans, and comparison shopping — to get the lowest rates available to you.
Quick Facts
If you choose to pay for your new car insurance policy in installments, the insurance company will require a down payment to initiate the policy.[1]
Your down payment may be the first month’s premium paid in advance or a percentage of the total premium.
A down payment counts toward your total premium. It’s not an additional fee.
No-deposit car insurance doesn’t exist
Car insurance with no deposit or down payment doesn’t exist, as insurers don’t want to take on the risk of insuring you without some sort of payment.
The misconception of no-deposit car insurance may come from the differences in down payment amounts among companies and for different drivers. Deposit amounts can vary based on many factors, including the insurance company, your state, driving history, credit history, and more.
For example: Let’s say your insurer last year only required you to pay the first month’s installment as a down payment. But this year, you got into an at-fault accident, and now your new insurer wants more than one month’s premium as a deposit.
You may think the deposit amount is your first month’s premium plus an added fee — but it’s really just a higher percentage of the total premium.[2]
Find Coverage with a Low Down Payment
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Why do insurance companies require a down payment?
Insurance companies require a down payment because it protects them from significant risk during the first month of the policy. When you sign up for car insurance coverage, your insurer is agreeing to take on financial responsibility for various claims outlined in the policy, so it needs a deposit or down payment to offset that risk.
Is no-deposit car insurance a scam?
You should be wary of any car insurance company offering no-deposit car insurance. No reliable insurance company will give you a policy without some sort of down payment.
Keep an eye out for insurance companies that require the first month’s payment as a deposit rather than a separate charge. They may advertise the policy as “no deposit” since the money goes toward your policy costs, but you’ll still need to pay this money before your coverage kicks in.
If a company claims to offer true no-deposit or zero-down car insurance without requiring any money up front, it’s likely a scam. No matter where you buy your insurance, it’s smart to read reviews and check ratings before committing to a policy.
How to lower your down payment
If you want to find the best deal on car insurance and lower your down payment, you can do a few things to save money. Follow these tips to decrease your deposit and monthly premium:
1. Compare multiple car insurance quotes
2. Consider pay-as-you-go insurance
3. Ask for discounts
4. Reduce car insurance coverage
Compare multiple car insurance quotes
Best for: All drivers
You should always compare car insurance quotes before buying a policy. Every insurer calculates rates differently, and each driver has unique characteristics, such as their location, driving record, and age, so rates can differ drastically. The cheapest car insurance company for you may be different from the cheapest option for your parents, for example, given their age.
Since most insurers will ask for the first month’s premium as a deposit, finding cheaper insurance through quote comparison can lower your down payment.
Consider pay-as-you-go insurance
Best for: Safe or low-mileage drivers
If you don’t drive much, you may benefit from pay-as-you-go or pay-per-mile insurance. These types of insurance are similar though not entirely the same.
Pay-as-you-go insurance — also known as usage-based insurance — charges you based on how much and how well you drive.[3] Pay-per-mile insurance charges you based on how many miles you drive on top of a base rate.
These types of policies typically have lower down payment requirements. But they’re not without risk. You may not get the same level of coverage as you would with typical full-coverage car insurance. With pay-as-you-go insurance, the insurer can even penalize you for poor driving, so consider how carefully you drive before signing up.
Here are the top insurers for pay-as-you-go car insurance.
Hugo
Compare personalized, real-time quotes
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-five scale. The Insurify editorial team researches insurer data to determine the final scores. | 7.0 |
|---|---|
| A.M. Best A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor). | NR |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $52/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $62/mo |
Launched in 2021, Hugo is currently the only insurance company offering on-demand car insurance. Drivers open an account with Hugo without paying a down payment, and choose their policy term. Hugo sells policies for three, seven, 14, or 30 days, and offers three tiers of coverage: flex, which meets state-minimum liability requirements; basic, which adds medical and accidental death coverage to liability, and full, which adds comprehensive and collision to the basic plan. Using the Hugo app, drivers can turn coverage on and off so they only pay for the days when they’re actually using the coverage.
Pros
Short-term policies
No down payment required
Flexible, pay-as-you-go insurance
Cons
Only available in 13 states
No discounts and limited options to customize coverages
Read our Hugo review
Thaddeus
- June 3, 2024
Verified
On the Go Insurance
It's flexible, but I would like to speak to a human about issues.
David
- May 20, 2024
Verified
Yes
It's the best deal for people like me who rarely go out.
William
- May 13, 2024
Verified
Average
The service is average.
Metromile
Compare personalized, real-time quotes
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-five scale. The Insurify editorial team researches insurer data to determine the final scores. | 7.0 |
|---|---|
| A.M. Best A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor). | NR |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $73/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $117/mo |
Owned by Lemondate Insurance, Metromile is a pay-per-mile car insurance company that debuted in San Francisco in 2011. The company tracks customer mileage through an in-car device. Customers pay a monthly rate plus a set amount (usually pennies) for every mile they drive. Low-mileage drivers could realize significant savings with Metromile: the company says customers who drive 2,500 miles or fewer can save about $947 annually. However, the company isn’t rated by A.M. Best, and has more than seven times the number of expected complaints in the National Association of Insurance Commissioner’s Consumer Complaints Index.
Pros
Low mileage drivers could realize significant savings
Most full-coverage policies include free pet injury protection for covered claims
Cons
Very high rate of customer complaints
Not available in every state
Read our Metromile review
Scott
- May 13, 2024
Verified
Note
Metromile is canceling policies in Virginia.
Dodie
- May 13, 2024
Verified
Great Experience
I've had a great experience with this insurance company. I only switched because Metromile is withdrawing its services from Illinois.
Roden
- May 13, 2024
Verified
Best Insurance
Happy
…
Mile Auto
Compare personalized, real-time quotes
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-five scale. The Insurify editorial team researches insurer data to determine the final scores. | 7.5 |
|---|---|
| A.M. Best A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor). | NR |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $60/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $112/mo |
Mile Auto is unlike other auto insurance companies in that it bases rates on the number of miles you drive. The company says low-mileage drivers can save up to 40% compared to a standard policy.
While Mile Auto does require drivers to report mileage, it asks for a photo of your odometer rather than track your driving with a telematics device. Your rate includes a base rate plus the rate for miles driven.
You won’t find an A.M. Best rating for Mile Auto because it doesn’t underwrite its own policies. However, it notes that its underwriter has an “Excellent” rating and its policies are backed by one of the world’s largest reinsurers.
Pros
Low-mileage drivers may see significant savings
You don't have to install a telematics device in your car
Cons
Only available in nine states
No bundling or discount opportunities
Nationwide
Compare personalized, real-time quotes
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-five scale. The Insurify editorial team researches insurer data to determine the final scores. | 8.7 |
|---|---|
| JD Power J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale. | 815 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $85/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $186/mo |
Nationwide offers one of the most widely available pay-per-mile car insurance programs. SmartMiles allows low-mileage drivers to pay a monthly base rate plus a per-mile charge each month. You participate in the program either with a telematics device that goes in your car or with an eligible connected car.
Pros
Available in all states except Alaska, Hawaii, Louisiana, North Carolina, New York, and Oklahoma
10% renewal discount available for safe driving behavior
Cons
Requires telematics tracking
Poor driving habits could negatively affect your rates
Read our Nationwide review
Charles
- June 17, 2024
Verified
More than Twice the Price!
I have been a Nationwide client for my cars, boats, and homes since 1973. Recently, I received a notice that the company is dropping us this fall for no apparent reason; no claims, always paid on time, 5-year-old metal roof, etc. Upset, I decided to drop my other policies as well. I was shocked to discover that for the exact same coverage, Nationwide has been charging us more than double! Despite their great service, and despite having recommended them to many other people, I obviously switched to Progressive. It seems that loyalty means nothing to Nationwide!
Nikolai
- June 15, 2024
Verified
Pricing
It's all good, but too expensive now!
Susan
- June 14, 2024
Verified
I can't afford this insurance anymore.
The rates keep rising, but my pay doesn't. I can't afford the insurance anymore.
…
Ask for discounts
Best for: Most drivers
Most car insurance companies offer a variety of car insurance discounts. Consider your situation and which offers you may qualify for, such as good student, loyalty, and defensive driving discounts. Ask your insurance agent to check for you, or simply research an insurer’s website to learn which discounts it offers.
 "Very Cheap Car Insurance with No Down Payment or Deposit 2024 (10)")
Reduce car insurance coverage
Best for: Low-risk drivers, drivers with no financing costs
Consider reducing your coverage level. Liability car insurance costs significantly less than full coverage. But it won’t cover damages from collisions or weather damage.
Liability coverage is only good for drivers who don’t drive frequently or can afford to pay vehicle expenses out of pocket. If you drive a lot and wouldn’t be able to pay for significant vehicle repairs, you should probably carry full coverage. If you took out a loan to pay for your car or lease it, your lender or leasing company will require you to carry full coverage anyway.
The following table illustrates the difference in coverage costs among top insurers, according to Insurify data.
The below rates are estimated rates current as of:
Tuesday, June 18 at 12:00 PM PDT
.
Data reviewed by
Konstantin Halachev
 "Very Cheap Car Insurance with No Down Payment or Deposit 2024 (11)")
Konstantin HalachevVP of Engineering & Data Science
7+ years experience in data analysis
Ph.D. in Computational Biology
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
Read Editorial Guidelines
View Full Bio
| Insurance Company | Full Coverage | Liability Only |
|---|---|---|
| COUNTRY Financial | $42 | $19 |
| NJM | $54 | $33 |
| Hugo | $62 | $52 |
| Auto-Owners | $79 | $37 |
| Erie | $92 | $54 |
| USAA | $100 | $46 |
| Mile Auto | $112 | $60 |
| Metromile | $117 | $73 |
| State Farm | $119 | $55 |
| GEICO | $121 | $55 |
| Root | $128 | $87 |
| CSAA | $130 | $86 |
| Progressive | $134 | $78 |
| Safeco | $134 | $74 |
| Allstate | $138 | $63 |
| Clearcover | $144 | $88 |
| Mercury | $159 | $82 |
| National General | $160 | $77 |
| American Family | $172 | $77 |
| The Hartford | $176 | $111 |
| Nationwide | $186 | $85 |
| Elephant | $187 | $102 |
| State Auto | $191 | $94 |
| Direct Auto | $193 | $98 |
| Travelers | $195 | $90 |
| Shelter | $200 | $107 |
| AssuranceAmerica | $220 | $126 |
| Liberty Mutual | $225 | $108 |
| Dairyland | $229 | $84 |
| The General | $242 | $114 |
| Chubb | $244 | $114 |
| Infinity | $247 | $183 |
| Farmers | $249 | $112 |
| 21st Century | $258 | $119 |
| Bristol West | $279 | $127 |
| Amica | $280 | $166 |
| GAINSCO | $281 | $125 |
| Foremost | $284 | $138 |
| Commonwealth Casualty | $313 | $120 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
No-deposit car insurance FAQs
If you’re on a budget, it’s possible to find affordable car insurance. Here’s some additional information that might help as you research different policies.
Do all car insurance companies require a deposit or down payment?
Yes. All car insurance companies require some form of payment up front before you can get coverage. This is a way for insurers to reduce risk.
Which auto insurance companies don’t require a down payment?
Every car insurance company requires a down payment in the form of the first month’s premium. However, many car insurance companies don’t require a secondary deposit on top of the initial premium, including:
Alliance
Allstate
Farmers
Kemper
Nationwide
Progressive
SafeAuto
State Farm
This list is not exhaustive, so it’s a good idea to contact a car insurance company directly if you have questions about its down payment requirements.
Which companies have the cheapest car insurance?
COUNTRY Financial, NJM, and Auto-Owners have the lowest car insurance rates, according to Insurify data. But not every driver may be able to get coverage from these companies.
State Farm and GEICO are two nationally available insurance companies that offer some of the cheapest policies, so getting quotes from them is certainly a good start.
Every driver is unique — rates depend on different things like your driving record, credit score, and your ZIP code. You may find cheaper insurance with another company, so always compare quotes from multiple insurers before buying a policy.
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Sources
- Direct Auto Insurance. "About Car Insurance Down Payments."
- Progressive. "Can I get car insurance with no down payment?."
- Insurance Information Institute. "Background on: Pay-as-you drive auto insurance (telematics)."
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Elizabeth Rivelli
Elizabeth Rivelli is a freelance writer covering insurance and personal finance. She has extensive knowledge of various insurance lines, including property and casualty, health, and life insurance. Her byline has been featured in dozens of publications, including Investopedia, Forbes, Bankrate, NextAdvisor, and Insurance.com.
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Edited byEvelyn PimplaskarEditor-in-Chief, Director of Content
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10+ years in insurance and personal finance content
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Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.
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Reviewed byDaniel RoccatoAdvisor
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Data reviewed byKonstantin HalachevVP of Engineering & Data Science
7+ years experience in data analysis
Ph.D. in Computational Biology
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
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