Getting car insurance with no down payment might seem like an impossible task. Today, we’re explaining how you can get car insurance with the smallest possible down payment.

Need to drive legally today with the lowest possible cost? Want to limit your down payment as much as possible? Keep reading to discover everything you need to know about no down payment car insurance quotes.

A Typical Car Insurance Down Payment is Your First Two Months of Coverage

no down payment car insuranceIf you want to drive legally in the United States, then you need car insurance. Before your car insurance is activated, however, you typically need to make a down payment.

Some car insurance companies give you a discount for paying the entire 6 or 12 month policy upfront. If you pay $1200 per year for car insurance, then you might be able to pay that amount today – assuming you have the cash.

What happens if you don’t have the cash to pay 6 or 12 months upfront? For many drivers, it’s in their best interest to pay month-to-month. This limits the upfront fee you pay today in exchange for slightly higher premiums. Your $1200 per year policy might be financed out over a 12 month period. You pay a total of $105 per month or $1260 per year.

Before you pay the month-to-month rate, however, you may need to make a down payment.

Typically, a down payment is about 20 to 33% of your policy’s six-month premium total. That works out to about 2 months of coverage paid upfront today.

If your monthly insurance premiums are $105 per month, then you might be required to make a down payment of $210 today. This down payment goes towards your first two months of insurance coverage. Then, once your down payment has been spent, the money will be taken out of your account on a monthly basis.

What Happens If You Can’t Afford a Down Payment?

When you’re buying car insurance, you typically have three main options:

  • Pay for the entire 12 month policy upfront
  • Pay for the entire 6 month policy upfront
  • Pay a 20% to 30% down payment upfront and then pay month-to-month

With many insurance companies in the United States, these are the only options available. It’s virtually impossible to get legal car insurance without paying something upfront.

Fortunately, there is an option that allows you to pay the lowest possible down payment while maintaining legal car insurance coverage: certain states have car insurance companies that offer zero down payment car insurance.

How to Get the Lowest Possible Down Payment on Car Insurance

Millions of people search for “no down payment car insurance” every year. These searchers encounter a variety of different insurance providers. You can find entire websites dedicated to finding the best car insurance with no down payment.

What’s the catch with this type of car insurance? How can these providers legitimately offer car insurance with no down payment?

The “catch” is straightforward:

With a “zero down payment car insurance company”, your first monthly payment is used as a policy down payment, giving you the illusion that you’re not putting any money down

In other words, you’re still paying money today. In fact, you may be paying the same amount of money you were originally going to pay with a standard car insurance provider. The difference is that you believe this money is going towards your first car insurance premium payments.

Zero Down Payment Car Insurance is Mostly Just Marketing

Ultimately, it’s hard to get a good deal on car insurance with no down payment. You always need to pay something to activate your car insurance. You might not pay a down payment today, but you pay more for car insurance in the long run.

Some companies use strategic marketing to appeal to certain drivers – like drivers who need car insurance today but aren’t willing to pay a lot of money for it. These companies might claim to “waive” your car insurance down payment today if you pay the premium for your first or second month.

In reality, you’re spending close to the same amount of money. Because of clever marketing, however, there’s the illusion that you’re saving money.

Only a handful of states even allow car insurance with zero down payments, including all of the following:

California has more car insurance companies with zero down payment insurance than any other state.

Read the Fine Print with Zero Down Payment Car Insurance Policies

There’s one final thing to remember about car insurance policies with zero down payments: read the fine print.

Some companies will genuinely waive your down payment and charge you a fair price for your monthly premium. All you need to do is pay your first month’s premium and you’re set: you have legal, activated car insurance that will put you safely on the road.

In many cases, however, there’s a catch with these policies. These policies might come with hefty administrative fees hidden in the fine print, for example.

Or, these car insurance companies might charge higher premiums than the competition because they have a pool of high-risk drivers.


Ultimately, car insurance policies typically come with a down payment. However, you can find some car insurance companies that waive your down payment. In exchange, you’ll be required to pay the first month or two upfront today. In the long run, you might end up paying the same amount of money – but you have the illusion that you’ve saved money with zero down payment car insurance.