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.
As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.
Mark FriedlanderDirector, Corporate Communications
Corporate communications director for Insurance Information Institute
20+ years in insurance and communications
As Director, Corporate Communications for Triple-I, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.
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Car insurance can be expensive, not to mention the cost of gas, maintenance, and repairs. One way drivers can cut costs is by finding an insurer that offers coverage with a low down payment. It won’t be as little as $20, but it might be low enough to save your wallet.
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 premium 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 $169 per month, according to Insurify data. So if you live in Auburn and buy a policy for the monthly average, your insurer will require $169 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 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 insurer 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].”
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How to get a low down payment on car insurance
While getting car insurance for $20 down isn’t realistic, you can find a policy with a low down payment. You’ll want to identify insurance companies that require only the first month’s premium up front. You shouldn’t have much difficulty doing this, as most insurers offer this.
Some criteria that can help lower your monthly premium include:
One of the best ways to secure cheap car insurance is by comparing quotes from multiple insurers. Insurance companies may charge different rates for the same policy, and some may have discounts better suited to your needs.
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.”
Lowering your monthly car insurance premium is within your control, and it starts with knowing how and where to look. Car insurance companies charge different rates for the same coverage, so comparing quotes from multiple companies before buying a policy is crucial. If you just buy the first policy you’re quoted, you could leave money on the table.
One of the most reliable ways to keep your car insurance rates low is by keeping a clean driving record. Just one speeding ticket can keep you from getting the best rate. More serious offenses, like DUIs and hit-and-runs, can result in more than just expensive rates. You may be required to carry SR-22 insurance for three to five years, which is substantially more expensive than standard coverage.[2] And you may have difficulty finding a standard insurer willing to take the risk of offering you a policy.
The following table shows average monthly full-coverage quotes from top insurers to illustrate certain traffic incidents can affect your insurance rates.
The below rates are estimated rates current as of: Monday, September 18 at 12:00 PM PDT.
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.
You can save money on car insurance in many other ways, including:
Take advantage of discounts.Apply for discounts for loyalty, good driving, going paperless,bundling, multiple vehicles, etc. Ask your insurance company about what discounts you qualify for.
Participate in a telematics program. Some car insurance companies offer usage-based programs that track driving behavior and reward safe habits. However, bad driving may result in higher rates, so consider your driving habits carefully before signing up.
Increase your deductible. Consider raising your deductible if you can afford a larger out-of-pocket expense should you need to file a claim. The higher your deductible is, the lower your premium will be.
Purchase liability-only coverage. While liability-only coverage will leave you more exposed than full-coverage car insurance, it can save you significantly on premiums. If you don’t drive much, liability-only coverage might be a good way to avoid expensive rates.
Check for low-income programs with your state. Some states offer discounted insurance for drivers with low income.
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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.
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.
Is there any way you can lower your car insurance payments?
You can lower your car insurance premiums in many ways, such as by taking a defensive driving course, driving accident- and ticket-free, maintaining a good credit score, and taking advantage of the many discounts insurers offer.
Do you need car insurance?
Car insurance is mandatory in every state except New Hampshire[3] and Virginia[4]. 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.
Virginia Department of Motor Vehicles. "Insurance Requirements." Accessed April 28, 2023
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.
As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.
Mark FriedlanderDirector, Corporate Communications
Corporate communications director for Insurance Information Institute
20+ years in insurance and communications
As Director, Corporate Communications for Triple-I, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.
