Cheap Car Insurance No Down Payment
When many people start looking for auto insurance, they are often surprised that companies typically require a down payment to start a policy. In some cases, this down payment can be quite high. If this has been your experience, you may be wondering if it is possible to get cheap car insurance with no down payment.
The truth is, it is nearly impossible to find cheap car insurance with no down payment. Insurance has its basis in contract law, which states that without “consideration” - that is, payment - a contract cannot exist. Your insurance policy is a contract, so you will need to make a down payment in order for your policy to become “in force”.
The exception is when a company agrees to issue a “binder” - an agreement to begin coverage - before the payment of the first premium. Not all companies are willing to do this, and those that are are usually only willing to issue binders to customers who have an established insurance track record. If you obtain a policy binder, keep in mind that if you do not make your first policy payment as agreed, the binder will never have existed.
Although it is very difficult to find cheap car insurance with no down payment, there are ways you can reduce your down payment to minimize your initial costs. Some companies will allow you to make premium payments on a monthly basis, and may be willing to let you pay your first month's premiums as a down payment. These companies typically charge installment fees each month, though, so you will end up paying more over the life of the policy term.
Also, you can look for a company that does not charge an “installment fee” or a “policy initiation fee”. Some companies charge as much as $30 or more to start a policy, which can inflate your down payment. Be sure to ask your agent whether you will be charged such a fee before signing a policy application or agreement.
While cheap car insurance with no money down is quite rare, these steps will help you reduce your upfront expenses, so you can keep more of your hard earned money in your wallet.