No-Deposit Car Insurance (2024)

No-deposit car insurance doesn’t actually exist, but you still have plenty of opportunities to save on car insurance.

Elizabeth Rivelli
Elizabeth Rivelli
  • 5+ years writing insurance and personal finance topics

  • Auto, home, health, and life insurance expertise

Elizabeth has extensive insurance industry experience, having written for Insureon, Rate Retriever, and Insurify. She’s also finance and insurance editor for Car and Driver.

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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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Daniel Roccato
Reviewed byDaniel Roccato
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Daniel RoccatoAdvisor
  • 30+ years in financial services

  • Clinical Professor of Finance, University of San Diego

Dan is a well-recognized and widely quoted financial services expert, regularly appearing in a variety of national and local media as a subject matter expert.

Konstantin Halachev
Data reviewed byKonstantin Halachev
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Konstantin HalachevVP of Engineering & Data Science
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

Updated July 11, 2024

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*Quotes generated for Insurify users within the last 10 days. Last updated on July 11, 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 July 11, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

Almost every reputable car insurance company will require some sort of deposit or down payment before providing you with coverage. But if you’re strapped for cash, some insurers only require the first month’s premium as a deposit, rather than a separate fee.

You can find other ways to save money on car insurance — including discounts, payment plans, and comparison shopping — to get the lowest rates available to you.

Quick Facts
  • If you choose to pay for your new car insurance policy in installments, the insurance company will require a down payment to initiate the policy.[1]

  • Your down payment may be the first month’s premium paid in advance or a percentage of the total premium.

  • A down payment counts toward your total premium. It’s not an additional fee.

No-deposit car insurance doesn’t exist

Car insurance with no deposit or down payment doesn’t exist, as insurers don’t want to take on the risk of insuring you without some sort of payment. 

The misconception of no-deposit car insurance may come from the differences in down payment amounts among companies and for different drivers. Deposit amounts can vary based on many factors, including the insurance company, your state, driving history, credit history, and more.

For example: Let’s say your insurer last year only required you to pay the first month’s installment as a down payment. But this year, you got into an at-fault accident, and now your new insurer wants more than one month’s premium as a deposit.

You may think the deposit amount is your first month’s premium plus an added fee — but it’s really just a higher percentage of the total premium.[2]

Find Coverage with a Low Down Payment

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Why do insurance companies require a down payment?

Insurance companies require a down payment because it protects them from significant risk during the first month of the policy. When you sign up for car insurance coverage, your insurer is agreeing to take on financial responsibility for various claims outlined in the policy, so it needs a deposit or down payment to offset that risk.

Is no-deposit car insurance a scam?

You should be wary of any car insurance company offering no-deposit car insurance. No reliable insurance company will give you a policy without some sort of down payment.

Keep an eye out for insurance companies that require the first month’s payment as a deposit rather than a separate charge. They may advertise the policy as “no deposit” since the money goes toward your policy costs, but you’ll still need to pay this money before your coverage kicks in.

If a company claims to offer true no-deposit or zero-down car insurance without requiring any money up front, it’s likely a scam. No matter where you buy your insurance, it’s smart to read reviews and check ratings before committing to a policy.

How to lower your down payment

If you want to find the best deal on car insurance and lower your down payment, you can do a few things to save money. Follow these tips to decrease your deposit and monthly premium:

1. Compare multiple car insurance quotes

2. Consider pay-as-you-go insurance

3. Ask for discounts

4. Reduce car insurance coverage

Compare multiple car insurance quotes

Best for: All drivers

You should always compare car insurance quotes before buying a policy. Every insurer calculates rates differently, and each driver has unique characteristics, such as their location, driving record, and age, so rates can differ drastically. The cheapest car insurance company for you may be different from the cheapest option for your parents, for example, given their age.

Since most insurers will ask for the first month’s premium as a deposit, finding cheaper insurance through quote comparison can lower your down payment.

Consider pay-as-you-go insurance

Best for: Safe or low-mileage drivers

If you don’t drive much, you may benefit from pay-as-you-go or pay-per-mile insurance. These types of insurance are similar though not entirely the same.

Pay-as-you-go insurance — also known as usage-based insurance — charges you based on how much and how well you drive.[3] Pay-per-mile insurance charges you based on how many miles you drive on top of a base rate.

These types of policies typically have lower down payment requirements. But they’re not without risk. You may not get the same level of coverage as you would with typical full-coverage car insurance. With pay-as-you-go insurance, the insurer can even penalize you for poor driving, so consider how carefully you drive before signing up.

Here are the top insurers for pay-as-you-go car insurance.

Hugo

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User Reviews
4.2
IQ Score
The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores.
7.0/10
Liability Only
Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages.
$52/mo
Full Coverage
Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible.
$60/mo

Launched in 2021, Hugo is currently the only insurance company offering policy terms as short as three days and the ability to make smaller, more frequent micropayments. Drivers open an account with Hugo without paying a down payment, and choose their policy term. Hugo sells policies for three, seven, 14, or 30 days, or six months, and offers minimum coverage liability insurance. Hugo no longer sells full-coverage policies, and liability policies are limited to state minimums – you can’t buy higher liability limits.

Pros
  • Short-term policies

  • No down payment required

  • Micropayment option

Cons
  • Only available in 13 states

  • Full coverage not available

  • No discounts

Read more driver reviews of Hugo
Deborah - June 30, 2024
Verified

Excellent

It's a weekly policy and only covers liability.

Makayla - June 24, 2024
Verified

New Insurance

The process was very easy and helpful for me.

Samuel - June 23, 2024
Verified

Does the job temporarily.

Hugo is a great 'pay as you go' insurance, although the total monthly cost is slightly higher than most. It allows you to pay only for the days you drive, but if your policy is not active (paid for) for over three days, your policy pricing may increase. Hugo does not provide a physical insurance card. You can only access your proof of insurance by visiting their website. Therefore, it's advisable to take a screenshot of your proof of insurance in case you lose internet access or the website is down. As a fully digital service, they do not have an app for Android or iPhone, only a website. Additionally, Hugo does not currently offer SR-22 coverage. Overall, Hugo is a good temporary insurance to have, but you might be better off with a monthly insurance plan, unless you rarely drive.

Metromile

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User Reviews
3.6
IQ Score
The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores.
7.0/10
Liability Only
Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages.
$72/mo
Full Coverage
Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible.
$117/mo

Owned by Lemondate Insurance, Metromile is a pay-per-mile car insurance company that debuted in San Francisco in 2011. The company tracks customer mileage through an in-car device. Customers pay a monthly rate plus a set amount (usually pennies) for every mile they drive. Low-mileage drivers could realize significant savings with Metromile: the company says customers who drive 2,500 miles or fewer can save about $947 annually. However, the company isn’t rated by A.M. Best, and has more than seven times the number of expected complaints in the National Association of Insurance Commissioner’s Consumer Complaints Index.

Pros
  • Low mileage drivers could realize significant savings

  • Most full-coverage policies include free pet injury protection for covered claims

Cons
  • Very high rate of customer complaints

  • Not available in every state

Read more driver reviews of Metromile
Susan - June 25, 2024
Verified

Bad Customer Service

There was no opportunity to rectify a denied bank notice, leading to a total policy suspension.

Michael - June 24, 2024
Verified

Difficulty in Communication

There are no humans available to talk to.

Nicholas - June 18, 2024
Verified

They only offer 6-month policies and with each renewal, the rate increases by an average of 10%. That's 20% or more per year. There have been no claims or tickets in the last 4 plus years. I hate to think what the rate would be if they had to pay a claim.

They only offer 6-month policies and with each renewal, the rate increases by an average of 10%. That's 20% or more per year. There have been no claims or tickets in the last 4 plus years. I hate to think what the rate would be if they had to pay a claim.

Mile Auto

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A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
NR
IQ Score
The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores.
7.5/10
Liability Only
Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages.
$59/mo
Full Coverage
Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible.
$110/mo

Mile Auto is unlike other auto insurance companies in that it bases rates on the number of miles you drive. The company says low-mileage drivers can save up to 40% compared to a standard policy.

While Mile Auto does require drivers to report mileage, it asks for a photo of your odometer rather than track your driving with a telematics device. Your rate includes a base rate plus the rate for miles driven.

You won’t find an A.M. Best rating for Mile Auto because it doesn’t underwrite its own policies. However, it notes that its underwriter has an “Excellent” rating and its policies are backed by one of the world’s largest reinsurers.

Pros
  • Low-mileage drivers may see significant savings

  • You don't have to install a telematics device in your car

Cons
  • Only available in nine states

  • No bundling or discount opportunities

Nationwide

Compare personalized, real-time quotes
User Reviews
3.4
IQ Score
The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores.
8.7/10
Liability Only
Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages.
$85/mo
Full Coverage
Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible.
$186/mo

Nationwide offers one of the most widely available pay-per-mile car insurance programs. SmartMiles allows low-mileage drivers to pay a monthly base rate plus a per-mile charge each month. You participate in the program either with a telematics device that goes in your car or with an eligible connected car.

Pros
  • Available in all states except Alaska, Hawaii, Louisiana, North Carolina, New York, and Oklahoma

  • 10% renewal discount available for safe driving behavior

Cons
  • Requires telematics tracking

  • Poor driving habits could negatively affect your rates

Read more driver reviews of Nationwide
Joseph - July 5, 2024
Verified

Wish for Combined Auto and Homeowners Insurance

I wish you guys would insure my vehicles so I can combine it with my homeowners insurance.

Mary - July 3, 2024
Verified

Senior Opinion

Visited face-to-face with an agent.

Theresa - June 30, 2024
Verified

Unfair Insurance for Safe Drivers

The insurance for safe drivers is unbelievably high.

Ask for discounts

Best for: Most drivers

Most car insurance companies offer a variety of car insurance discounts. Consider your situation and which offers you may qualify for, such as good student, loyalty, and defensive driving discounts. Ask your insurance agent to check for you, or simply research an insurer’s website to learn which discounts it offers.

Reduce car insurance coverage

Best for: Low-risk drivers, drivers with no financing costs

Consider reducing your coverage level. Liability car insurance costs significantly less than full coverage. But it won’t cover damages from collisions or weather damage.

Liability coverage is only good for drivers who don’t drive frequently or can afford to pay vehicle expenses out of pocket. If you drive a lot and wouldn’t be able to pay for significant vehicle repairs, you should probably carry full coverage. If you took out a loan to pay for your car or lease it, your lender or leasing company will require you to carry full coverage anyway.

The following table illustrates the difference in coverage costs among top insurers, according to Insurify data.

The below rates are estimated rates current as of: Monday, July 1 at 12:00 PM PDT
Data reviewed by Konstantin Halachev
Headshot of Konstantin Halachev, VP of Engineering at Insurify
Konstantin HalachevVP of Engineering & Data Science
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

Insurance CompanyFull CoverageLiability Only
COUNTRY Financial$41$19
NJM$54$33
Hugo$60$52
Auto-Owners$79$37
Erie$93$53
USAA$100$46
Mile Auto$110$59
Metromile$117$72
State Farm$120$55
GEICO$122$56
Root$128$86
CSAA$130$84
Progressive$134$77
Safeco$135$76
Allstate$138$63
Clearcover$144$89
Mercury$160$83
National General$161$78
American Family$171$77
The Hartford$177$109
Nationwide$186$85
Elephant$188$103
State Auto$190$94
Direct Auto$193$98
Travelers$196$90
Shelter$202$106
AssuranceAmerica$221$127
Dairyland$228$84
Liberty Mutual$231$112
The General$241$114
Chubb$243$114
Infinity$249$178
Farmers$251$113
21st Century$256$118
Bristol West$277$126
Amica$281$164
GAINSCO$283$126
Foremost$285$138
Commonwealth Casualty$313$120
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.

No-deposit car insurance FAQs

If you’re on a budget, it’s possible to find affordable car insurance. Here’s some additional information that might help as you research different policies.

  • Do all car insurance companies require a deposit or down payment?

    Yes. All car insurance companies require some form of payment up front before you can get coverage. This is a way for insurers to reduce risk.

  • Which auto insurance companies don’t require a down payment?

    Every car insurance company requires a down payment in the form of the first month’s premium. However, many car insurance companies don’t require a secondary deposit on top of the initial premium, including: 

    This list is not exhaustive, so it’s a good idea to contact a car insurance company directly if you have questions about its down payment requirements.

  • Which companies have the cheapest car insurance?

    COUNTRY Financial, NJM, and Auto-Owners have the lowest car insurance rates, according to Insurify data. But not every driver may be able to get coverage from these companies.

    State Farm and GEICO are two nationally available insurance companies that offer some of the cheapest policies, so getting quotes from them is certainly a good start.

    Every driver is unique — rates depend on different things like your driving record, credit score, and your ZIP code. You may find cheaper insurance with another company, so always compare quotes from multiple insurers before buying a policy.

Sources

  1. Direct Auto Insurance. "About Car Insurance Down Payments."
  2. Progressive. "Can I get car insurance with no down payment?."
  3. Insurance Information Institute. "Background on: Pay-as-you drive auto insurance (telematics)."
Elizabeth Rivelli
Elizabeth Rivelli

Elizabeth Rivelli is a freelance writer covering insurance and personal finance. She has extensive knowledge of various insurance lines, including property and casualty, health, and life insurance. Her byline has been featured in dozens of publications, including Investopedia, Forbes, Bankrate, NextAdvisor, and Insurance.com

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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Daniel Roccato
Reviewed byDaniel RoccatoAdvisor
Headshot of industry expert Daniel Roccato
Daniel RoccatoAdvisor
  • 30+ years in financial services

  • Clinical Professor of Finance, University of San Diego

Dan is a well-recognized and widely quoted financial services expert, regularly appearing in a variety of national and local media as a subject matter expert.

Konstantin Halachev
Data reviewed byKonstantin HalachevVP of Engineering & Data Science
Headshot of Konstantin Halachev, VP of Engineering at Insurify
Konstantin HalachevVP of Engineering & Data Science
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

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