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$20 Down Payment Car Insurance (July 2022)

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Amy Beardsley

By: Amy Beardsley

Edited by Jackie Cohen

Last Updated June 15, 2022

Why you can trust Insurify

Insurify partners with top insurance companies and is a licensed agent in all 50 states. However, the insurance experts writing our content operate independently of our partners. Check out reviews from over 3,000 satisfied customers, how we make money, our data methodology, and our editorial standards.

Most people want to save money on car insurance. Coverage isn’t cheap, and drivers often struggle to balance affordability and quality. You might be thinking, “Can I get car insurance for $20 down?”

While car insurance for $20 down may not be a realistic expectation, you can save money and get cheap auto insurance that fits your budget. Use Insurify to compare quotes and save money immediately.

Quick Facts

  • Most car insurance companies require the first month’s premium to be paid up front.
  • The average rate of liability-only car insurance in the U.S. is $89 per month.
  • Car insurance for $20 down is unrealistic and might be a scam.
  • Knowing how to shop for car insurance can save you money in the long run.

Can I get car insurance for $20?

Is $20 car insurance possible?

$20 would be a suspiciously low downpayment for even the most minimal car insurance policy. Be wary of scams and know that if it’s too good to be true, it probably is.

It is easy to be drawn to ads for $20 car insurance. The low cost sounds like a great deal. But keep the adage in mind: “If it’s too good to be true, it usually is.” This statement applies to car insurance, too.

Car insurance companies don’t usually offer $20 down auto insurance policies. Companies typically charge the first month’s premium to activate your policy, then require monthly installments to keep your coverage. Sometimes, the only payment option is to pay six months up front.

What about “no money down” auto insurance?

Simply put, “no down payment” car insurance doesn’t exist. Some insurers may characterize their auto insurance as having a “low down payment,” but this usually means you only have to pay the first month’s premium. In other words, a legitimate insurer requires money up front before issuing a policy.

How much will I have to pay for car insurance?

How much you pay depends on several factors. Location, age, gender, marital status, driving record, claims history, vehicle type, deductible, and type of coverages have the most impact on premiums. For example, first-time and young drivers won’t get the best rates because they’re riskier to insure.

According to the National Association of Insurance Commissioners (NAIC), the average cost of liability-only car insurance is $1,070 per year, or $89 per month. This is for liability coverage only and doesn’t include physical damage coverage like collision or comprehensive insurance.

As you can see, getting $20 car insurance isn’t practical. Fortunately, it is easy to comparison-shop so you have a better idea of how much it costs. Shopping around also improves your chances of getting a great policy you can afford.

See More: Best Car Insurance Companies

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Why get low down payment car insurance?

Low down payment car insurance is an excellent option for many motorists. If you’re short on cash, you can get the cheapest auto insurance coverage that you need to get on the road. However, finding a low down payment on car insurance can be tricky.

Typically, a car insurance company won’t issue a policy unless you pay money up front. Nearly all types of insurance require payment in advance of that month’s coverage. So, what is “low down payment” car insurance? It usually means you only pay the first month’s premium, not the entire six months when you buy car insurance.

Keep in mind that all car insurance rates are regulated by the state, usually by the state’s Department of Insurance. If you discover a sketchy offer for unbelievably cheap car insurance, report it to the state—they can investigate to determine whether it’s legitimate coverage.

Pros

  • Lower initial deposit

  • Immediate coverage without the high cost

  • Option for smaller monthly payments

Cons

  • Poor customer service and claims process

  • Inadequate coverage

  • Higher long-term costs

  • Large deductibles

How to Shop for Cheap Car Insurance

When looking for a new car insurance policy, you must first know how to shop for cheap coverage. It only takes five simple steps:

  1. Gather information: You’ll need your driver's license number, vehicle’s VIN, and previous policy information.
  2. Decide on your coverage needs: Do you want the state’s minimum coverage protection? Or do you want to add comprehensive coverage, collision, gap insurance, and roadside assistance?
  3. Choose where to shop: The best way to find cheap car insurance is to compare quotes from different providers online. Getting a free quote online can save you time and money over buying from an in-person insurance agent.
  4. Compare coverage options and ask about driver discounts: Get auto insurance quotes from at least three different providers before choosing a policy. Ask about insurance discounts—like good student and good driver discounts—to lower your costs.
  5. Buy your policy: Pay the down payment, and choose a start date before the cancellation date of your old policy to avoid a lapse in coverage.

When comparing policies, remember that low down payment auto insurance can be helpful to get your car on the road. But paying less up front can end up costing you more later on. Car insurance companies can offer less expensive premiums if you pay more up front—many even knock some money off your total to convince you to pay more right away.

See More: Cheap Car Insurance

Tips to Get Car Insurance with $20 Down

If $20 down payment car insurance appeals to you, you likely consider price a critical decision factor. Although you may not find a policy for $20 down, you have several options to lower your premiums and score low deposit car insurance.

Increase Your Deductible

Increasing the deductible means you take on more of the financial liability of protecting your car. The higher the deductible you select, the lower your car insurance premiums.

However, if you raise your deductible, make sure you have some savings to back it up. Otherwise, you could double your problems in an accident. For example, you may not have the funds to cover the higher deductible and may not be able to get your car repaired. Don’t set your deductible higher than you’d be able to afford in an emergency.

Reduce Your Insurance Coverage

Most states have minimum car insurance coverage, and buying the state’s minimum is less expensive than full coverage or other add-ons. Of course, when you drop comprehensive and collision coverage in favor of liability insurance only, you must pay the total cost to repair or replace your vehicle after an accident.

Improve Your Credit Score

Your credit score impacts how much you pay for car insurance (among other things). You can reduce your rates by having a good credit score before buying car insurance. Pay your bills on time and reduce your debts to have the biggest impact on your creditworthiness.

Clean Up Your Driving Record

Drivers with a clean driving record pay the least for car insurance. Having at-fault accidents, DUIs, or other traffic violations on your record makes you risky to insure. Because car insurance quotes reflect driving history, safe drivers are lower-risk and often get the cheapest rates.

Additionally, if you know some points are about to drop off your license, try to wait it out before shopping for car insurance again.

Use Comparison Sites

Car insurance comparison sites give you quotes from multiple insurers. Shop for coverage, research policies, and compare prices to find the right fit. Best of all, it just takes a couple of minutes, not hours, to get auto insurance rates from top companies like Progressive, GEICO, Allstate, Nationwide, and State Farm.

See More: Best and Worst Sites to Compare Car Insurance

Find Cheap Car Insurance

Overall, the best car insurance policy is the one that meets your needs. Maybe you want extra coverage, or perhaps you just need the state’s minimum requirements. Either way, buying car insurance that’s right for you involves more than just the cost. It’s almost impossible to find $20 car insurance, but there are several insurance options to get the lowest rates at a great price.

Frequently Asked Questions

  • It is tricky to find reputable car insurance for $20 down. However, most auto insurance companies let you set up monthly payment plans instead of paying one lump sum when you buy the policy. If you respond to a $20 down car insurance ad, read all the fine print and ask lots of questions.

  • The cheapest car insurance is easy to find when using a comparison tool like Insurify. Instead of you spending hours checking with multiple insurers, Insurify does it for you. Just answer a few questions to get a list of quotes from the nation’s best car insurance companies.

  • Drivers pay an $89 monthly premium on average in the U.S. for liability-only car insurance. However, the amount varies based on things like where you live, your driving history, your credit score, the vehicle you drive, and how much insurance coverage you need.

  • You can find affordable car insurance quotes with Insurify’s comparison-shopping tool. It’s fast, simple, and completely online. You’ll answer a few questions about your driving history and vehicle and get instant rates from dozens of insurance providers. Then, you can buy the best policy that works for you.

Compare Car Insurance Quotes Instantly

  • Personalized quotes in 5 minutes or less
  • No signup required
  • The car insurance quotes displayed are based on an analysis of Insurify’s database of over 40 million quotes from 500 ZIP codes nationwide. To obtain representative rates, Insurify’s data science team performs frequent comprehensive analyses of the factors car insurance providers weigh to calculate rates including driver demographics, driving record, credit score, desired coverage level, and more.

    Insurify’s analysis also incorporates the Insurify Composite Score (ICS) assigned to each insurance provider. The ICS is a proprietary rating that weighs multiple factors reflecting the quality, reliability, and health of an insurance company. Ratings used to calculate the ICS include Financial Strength Ratings from A.M. Best, Standard & Poor’s, Moody’s, and Fitch; J.D. Power ratings; Consumer Reports customer satisfaction surveys and customer complaints; mobile app reviews; and user-generated company reviews. 

    With the above insights and ranking methods, Insurify is able to offer car insurance shoppers insight into how various insurance providers compare to one another in terms of both cost and quality. Note, actual quotes will vary based on unique attributes including the policyholder’s driver history and their garaging address.

Amy Beardsley
Amy Beardsley
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Insurance Writer

Amy is a personal finance and technology writer. With a background in the legal field and a bachelor's degree from Ferris State University, she has a talent for transforming complex topics into content that’s easy to understand. Connect with Amy on LinkedIn.

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