$20 Down Payment Car Insurance in 2024: Is It Possible?

It’s possible to find low-down-payment car insurance, but it’s unlikely you’ll be able to start a policy for just $20.

Bob Phillips
Written byBob Phillips
Bob Phillips
Bob Phillips
  • 15+ years in personal finance advising and writing

  • Holds Chartered Life Underwriter (CLU) designation

Bob has spent 15+ years helping people plan their financial lives. As a freelance writer, he’s covered insurance, mutual funds, stocks and bonds, and more.

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Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
  • 10+ years in insurance and personal finance content

  • 30+ years in media, PR, and content creation

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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Updated March 25, 2024

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Cheapest recent rates

Drivers using Insurify have found quotes as cheap as $37/mo for liability only and $42/mo for full coverage.

*Quotes generated for Insurify users within the last 10 days. Last updated on March 25, 2024

Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from March 25, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

*Quotes generated for Insurify users within the last 10 days. Last updated on March 25, 2024

Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from March 25, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
Quick Facts
  • Most car insurance companies require you to pay the first month’s premium up front.

  • Car insurance for $20 down is unrealistic and might be a scam.

  • Quote comparison is one of the best ways to save money on your policy.

Can you get car insurance for $20?

No, you can’t get car insurance for only $20 down. Any insurance company offering rates this cheap is likely trying to scam you — most insurers typically charge the first month’s payment to activate your policy. This first payment is known as a down payment, and the cheaper your premium is, the lower your down payment will be.

For example, full-coverage car insurance in Auburn, Alabama, costs an average of $155 per month, according to Insurify data. So if you live in Auburn and buy a policy for the monthly average, your insurer will require $155 as a down payment.

You may also see no-down-payment car insurance advertised. This is also likely a scam; you should be wary of any insurance companies offering it. Almost every auto insurance company requires some money down with an application, typically a low down payment of the first month’s premium or whichever payment mode you select.

Important Information

Insurance agents will sometimes refer to a down payment for car insurance as a binder. This means the insurance provider is bound to cover you if it accepts your down payment and approves your application for coverage.[1]

“I’ve been an insurance agency owner since 2008 and am always on the lookout to find ways to help our clients with their needs,” says Alex Dean, licensed insurance agent and owner of Dean Insurance in Plano, Texas. “While I understand the circumstances where you might want to find a policy you can start with no deposit or down payment, it’s not something I’ve found possible.”

How do car insurance down payments work? 

Almost every insurer requires a car insurance down payment, sometimes called a deposit or a binder. It’s the amount you need to pay to activate your coverage. The amount of your down payment depends on the term you select (monthly, quarterly, semiannually). For example, if your monthly premium is $100, your down payment will be $100.

Insurers require a down payment to protect themselves financially. 

“If you owned a company, would you want to take on a risk without taking some sort of up-front payment for premiums?” Dean asks. “That’s a big risk for a company to take on, considering the possibility of paying out bodily injury and property damage [claims].”

Learn More: Low-Income Car Insurance

Learn More: Low-Income Car Insurance

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How to get a low down payment on car insurance

While you probably won’t find an insurer that allows a down payment as low as $20, many insurance companies will accept the first month’s premium as your deposit, provided you have a good driving record and payment history.

The best way to determine the amount you’ll have to put down is to reach out to insurers like Progressive, Allstate, State Farm, GEICO — or even a regional company like Erie — and ask. You can also work with an agent to find a low down payment.

What is no-down-payment car insurance?

No-down-payment car insurance doesn’t really exist, and you should steer clear of insurers offering it. Some may try to rephrase “down payment” as “deposit” and claim that it’s only an application fee, but it’s effectively the same thing as a down payment. Put simply, you won’t get reputable insurance without putting at least a little money down.

“If you do find an online car insurance company or someone who says they can do it, I would be wary about what coverage is actually afforded without any sort of payment,” Dean cautions. “None of the legitimate companies that I know of at this time will start a policy without some sort of payment for at least the first month’s premium.”

Read More: How Car Insurance Works: Everything You Need to Know

Read More: How Car Insurance Works: Everything You Need to Know

How to get cheap car insurance

The best way to get a low deposit is to find cheap car insurance so that your initial payment will be as low as possible. Fortunately, you have many ways to do this.

Maintain a good driving record

Many factors affect car insurance premiums, and your driving history is one of the most important. Insurance companies charge more for high-risk drivers with infractions like speeding tickets, reckless driving, at-fault accidents, and DUIs. These violations can increase the likelihood of a driver filing a claim.

Insurers often reward good drivers with discounts. So practicing safe driving habits and remaining claims-free can help lower your car insurance premium.

The following table illustrates the effects moving violations can have on minimum-coverage car insurance rates from some top companies:

The below rates are estimated rates current as of: Thursday, March 14 at 12:00 PM PDT
Insurance CompanyClean RecordSpeeding TicketAt-Fault AccidentDUI
COUNTRY Financial21252833
NJM36575951
Auto-Owners38464859
USAA46535771
Hugo48675965
State Farm53596382
GEICO54626784
Mile Auto55828985
Erie57798272
Root62949887
Allstate62717696
Safeco669298102
Metromile77114119105
American Family779196119
National General7991101122
Progressive82102110127
Mercury83127134135
Dairyland84103108130
Nationwide8599106132
Clearcover88119152136
Travelers90107114140
CSAA91113125141
Direct Auto95117126147
Liberty Mutual96129137149
Elephant98114123152
Shelter110154163147
Farmers110126135171
The General115141152178
The Hartford116187196174
Commonwealth Casualty116125145143
AssuranceAmerica117157160181
Chubb117139146181
GAINSCO120130142186
21st Century123154162191
Bristol West129153158200
Amica178270280247
Infinity192238222298
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.

Compare car insurance quotes

Just as you would comparison shop for a car, it’s a good idea to compare car insurance quotes. Prices, discounts, and coverages can vary significantly among insurance companies. Comparing quotes from multiple insurers can help you find the best rates for the coverage you need.

You have multiple options for comparing quotes. You can work with an independent agent, use an online quote-comparison tool, or get your own quotes directly from insurers.

Look for discounts

Most insurers — but not all — offer multiple discounts to help drivers save. Check out discounts for good driving, going paperless, bundling your home or renters insurance with an auto policy, getting good grades in high school or college, and more. Ask your insurer about what discounts you may qualify for when you apply for insurance coverage.

Consider pay-as-you-go insurance

Traditional car insurance charges you a flat premium that you either pay in installments or in a lump sum at the start of the policy. Pay-as-you-go auto insurance bases your monthly premium on a set base rate plus a per-mile charge, so your monthly payments depend on how many miles you drive.

Pay-as-you-go car insurance can be a money-saver for people who don’t drive much, like remote workers or seniors.

Purchase liability-only coverage

Liability-only car insurance — often called “minimum coverage” — is the cheapest type of auto insurance policy you can buy. But it’s not for everyone.

If you have a vehicle lease or loan, the leasing company or lender will require you to buy full coverage, which includes collision and comprehensive coverages. And even if you own your car outright, full coverage is a good idea if you have a newer or high-value vehicle or wouldn’t be able to pay for repairs or to replace it out of pocket.

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$20 down car insurance FAQs

Finding affordable car insurance can be difficult. We’ve answered some commonly asked questions about $20 down car insurance to make it a little easier.

  • Can you get car insurance for as low as $20?

    You probably can’t get a car insurance policy for as little as $20 or even $20 per month. Currently, the cheapest liability-only car insurance rate is $21 per month from COUNTRY Financial. But if you have a clean driving record and other favorable rating factors, you may be able to find minimum coverage for less than $30 per month.

  • Is it normal to pay a down payment on car insurance?

    Yes, it’s normal to pay a down payment for your car insurance. It’s typically equal to the first month’s premium. Some insurers or agents may refer to it as a “deposit,” but it really means the same thing as a down payment or up-front money. You must pay it for the insurer to issue you coverage.

  • Why is my car insurance down payment so high?

    Your total car insurance premium, the insurance company, and your personal driver profile affect how much your down payment will be. If you have driving infractions like speeding, are a new driver, have a history of claims, live in a high-risk ZIP code, have a poor credit history, or drive a high-value vehicle, your car insurance premium will be higher. That means your down payment is also likely to be higher, even if your insurer requires only the first month’s premium as a deposit.

  • Which insurance doesn’t require a down payment?

    Every reputable car insurance company will require some deposit to initiate a policy. Depending on the company and your personal circumstances, you may only have to pay the first month’s premium as a down payment. Some companies may charge a higher down payment if they consider you or your vehicle a higher risk.

  • Do you need car insurance?

    Car insurance is mandatory in every state except New Hampshire.[2] Minimum coverage amounts and coverage types vary by state, but nearly every state requires liability coverage for property damage and bodily injury.

  • How much car insurance do you need?

    You’ll need to carry at least your state’s required minimum liability coverages. Whether you need any additional coverage depends on how you drive. Consider how frequently and how far you drive, who you drive with, and when you drive when selecting your coverages and amounts. If you’re unsure how much you need, talk to an insurance agent.

Methodology

Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.

Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).

Liability-only premium averages correspond to policies with the following coverage limits:

  • Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
  • Property damage limits between $10,000 and $50,000
  • No additional coverage
Full-coverage premium averages correspond to the same bodily injury and property damage limits in addition to:
  • Comprehensive coverage with a $1,000 deductible
  • Collision coverage with a $1,000 deductible

Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.

Sources

  1. International Risk Management Institute. "Binder." Accessed April 28, 2023
  2. New Hampshire Insurance Department. "2022 Automobile Insurance Consumer Frequently Asked Questions." Accessed April 28, 2023
Bob Phillips
Bob Phillips


Having spent more than 15 years helping people plan their lives financially, Bob
mastered many different financial products to help people achieve their financial
goals, including life insurance, disability insurance, mutual funds, and stocks and
bonds. He earned the Chartered Life Underwriter (CLU) designation and held
numerous securities licenses. Bob is an internationally published poet and is now
a freelance writer living in North Texas with his wife and Doberman puppy.

Evelyn Pimplaskar
Edited byEvelyn PimplaskarEditor-in-Chief, Director of Content
Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
  • 10+ years in insurance and personal finance content

  • 30+ years in media, PR, and content creation

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.

Featured in

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