No-Down-Payment Car Insurance (2025)
No-deposit car insurance doesn’t actually exist, but you still have plenty of opportunities to get very cheap car insurance.
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Written bySarah Archambault
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Experienced personal finance writer
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
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Edited byEvelyn Pimplaskar
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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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Reviewed byDaniel Roccato
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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.
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Data reviewed byKonstantin Halachev
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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
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Table of contents
Table of contents
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.
What to know about very cheap car insurance with no deposit
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]
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” or “no down payment car insurance” since the money goes toward your policy costs, but you’ll still need to pay this money before your coverage kicks in.
Important Information
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.
Alternative with a low down payment: OCHO
No-deposit car insurance doesn’t exist, but OCHO may be able to help you cover the cost of your down payment or first month’s payment interest-free. Founded in 2021, OCHO is a car insurance agency that works with insurance companies to underwrite policies. And its OCHO Pay product provides zero-interest loans designed to cover some or all of your up-front costs.
You pay back your OCHO Pay loan in small increments every two weeks as part of your regular premium payment. The company reports payments to the credit bureaus, which can help you build credit. But OCHO charges an $80 broker fee, split into payments of about $7 over the term of your policy.
OCHO could be a good option for high-risk drivers and other people who need to make a big first payment on their auto insurance policy. Unfortunately, OCHO is only available in seven states: Arizona, Illinois, Missouri, New Mexico, Texas, Washington, and Wisconsin. But the company expects to expand into Georgia and California by the end of the year.
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:
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 insurance premiums 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 very cheap car insurance through quote comparison can lower your down payment.
Find Coverage with a Low Down Payment
Minimum-coverage policies start at $23 per month
Secure. Free. Easy-to-use.
Based on 3,806+ reviews
4.8/5
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: Best for 3-day coverage
| User Reviews | 4.1 |
|---|---|
| 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. | 6.3 /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. | $206/mo |
4.1
Best choiceBased on 153 verified guest reviews and ratings
How drivers feel about Hugo
Drivers appreciate the pay-as-you-go option and affordability but dislike the lack of full coverage and poor customer service.
AI-generated from the text of verified reviews collected by Insurify
Best For
Micropayments
No down payments
Fast coverage
How drivers feel about Hugo
Drivers appreciate the pay-as-you-go option and affordability but dislike the lack of full coverage and poor customer service.
AI-generated from the text of verified reviews collected by Insurify
Best For
Micropayments
No down payments
Fast coverage
Reviews (57)
Andrea
April 15, 2025
Verified Review
Excellent
Hugo is awesome.
Donna
April 2, 2025
Verified Review
No Thanks
In my experience, Hugo is an option for people who are struggling. However, it seems to exploit those who are struggling because the insurance only covers the minimum requirements. This means that the policyholder will be fully responsible and have to pay out of pocket for anything that goes wrong with the vehicle.
Rebekah
March 18, 2025
Verified Review
Never Able to Speak with Customer Service, So I Switched!
I was never able to speak with someone, so I switched!
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
NRNAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
NRA.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).
NRWhy we picked this company
Hugo launched in 2021 and is currently the only insurance company offering on-demand car insurance. Drivers can open a Hugo account without paying a down payment up front. Drivers can choose a policy term of three, seven, 14, or 30 days, or six months, and policyholders can pay smaller amounts more frequently instead of all at once. Drivers also receive instant proof of insurance. Hugo currently only offers state-minimum liability coverage in 13 states. J.D. Power and AM Best have not yet evaluated Hugo’s customer satisfaction or financial strength.
Pros
Short-term policies
No up-front down payment required
Flexible, pay-as-you-go insurance
Cons
Only available in 13 states
Doesn’t offer collision or comprehensive coverage
No discounts available
Mile Auto: Best for pay-per-mile coverage
| User Reviews | 4.1 |
|---|---|
| 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. | 8.8 /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. | $63/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. | $99/mo |
4.1
Best choiceBased on 121 verified guest reviews and ratings
How drivers feel about Mile Auto
Drivers appreciate the quality service but find the rates high and claim processing slow.
AI-generated from the text of verified reviews collected by Insurify
Best For
Low-mileage drivers
Senior drivers
Cheap full coverage
How drivers feel about Mile Auto
Drivers appreciate the quality service but find the rates high and claim processing slow.
AI-generated from the text of verified reviews collected by Insurify
Best For
Low-mileage drivers
Senior drivers
Cheap full coverage
Reviews (45)
Arthur
June 29, 2025
Verified Purchase
Excellent
Good rates based on mileage!
Monica Jo
June 22, 2025
Verified Review
Inexpensive, but No Full Coverage
If you drive a lot, this isn't the insurance for you! They charge per mile.
Betty
June 11, 2025
Verified Purchase
Loving it with bumps...
I really don't know what my policy covers. I know I get liability insurance. I love the rates, making car insurance not such a burden on a fixed income. I have troubles here and there with my phone being out of memory, and the office will have to accept my odometer reading text message. But that's my fault; I guess I need a memory card or SD card. But I love Mile Auto.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
NRNAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
2.18A.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).
NRWhy we picked this company
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
Seven: Best for manageable payments
| User Reviews | 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. | NR |
Best For
Best For
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
NRNAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
NRA.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).
NRWhy we picked this company
Seven offers required minimum coverage liability pay-as-you-go insurance in increments of seven days at a time. Drivers pay for their initial seven days when they enroll, and can choose their policy cancelation date. They can cancel at the end of their seven days, or allow the policy to automatically renew for another seven days. This process allows drivers to immediately secure coverage that meets state requirements, and get proof of insurance right away.
Pros
Easy-to-manage micropayments
No big upfront down payments
Immediate proof of insurance
Cons
Currently only available in Texas
Full coverage not available
No discounts available
Nationwide: Best for safe drivers
| User Reviews | 4.3 |
|---|---|
| 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. | 9 /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. | $90/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. | $181/mo |
4.3
Best choiceBased on 867 verified guest reviews and ratings
How drivers feel about Nationwide
Drivers appreciate the helpful and knowledgeable customer service but dislike the frequent and significant rate increases. Some also found the claims process to be slow and frustrating.
AI-generated from the text of verified reviews collected by Insurify
Best For
Usage-based savings
Accident forgiveness
Recreational vehicle coverage
How drivers feel about Nationwide
Drivers appreciate the helpful and knowledgeable customer service but dislike the frequent and significant rate increases. Some also found the claims process to be slow and frustrating.
AI-generated from the text of verified reviews collected by Insurify
Best For
Usage-based savings
Accident forgiveness
Recreational vehicle coverage
Reviews (485)
David
June 26, 2025
Verified Review
Switching to Progressive
Don't get Roadside Assistance. We were stuck 800 miles from home with a flat tire and were told they could not find anyone to assist us. Thank God there was a Les Schwab Tire Center in town.
Bettye
June 10, 2025
Verified Review
BG's Lament
They will not give you a bundle price, and are higher than other companies. You wonder if you are being given all the reductions allowed for a good driving record, living in Florida.
Nicholas
May 14, 2025
Verified Review
Poor
Nationwide is very overpriced for what they offer.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
641NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.7A.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).
A+Why we picked this company
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
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, clean driving record, and defensive driving discounts. Ask your insurance agent to check for you, or research an insurer’s website to learn which discounts it offers.
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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 people 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: Thursday, July 3 at 12:00 PM PDT.
Data reviewed by Konstantin Halachev
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 Company | Full Coverage | Liability Only |
|---|---|---|
| COUNTRY Financial | $45 | $23 |
| Auto-Owners | $70 | $37 |
| NJM | $85 | $70 |
| USAA | $99 | $49 |
| Mile Auto | $99 | $63 |
| State Farm | $116 | $56 |
| Erie | $117 | $90 |
| CSAA | $133 | $86 |
| Allstate | $133 | $66 |
| GEICO | $144 | $113 |
| Root | $145 | $95 |
| Safeco | $147 | $90 |
| American Family | $149 | $74 |
| Mercury | $166 | $92 |
| Progressive | $170 | $105 |
| Direct Auto | $179 | $100 |
| Nationwide | $181 | $90 |
| Elephant | $186 | $129 |
| National General | $186 | $100 |
| Travelers | $190 | $96 |
| Clearcover | $198 | $137 |
| The General | $198 | $103 |
| State Auto | $224 | $121 |
| Chubb | $226 | $118 |
| Farmers | $227 | $110 |
| Bristol West | $227 | $108 |
| 21st Century | $229 | $120 |
| The Hartford | $229 | $181 |
| Shelter | $231 | $169 |
| Liberty Mutual | $246 | $180 |
| Commonwealth Casualty | $248 | $95 |
| AssuranceAmerica | $253 | $139 |
| GAINSCO | $257 | $121 |
| Dairyland | $289 | $99 |
| Amica | $401 | $323 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ 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 to find the best rates.
Every car insurance company will require you to pay something toward your coverage when you enroll in a policy. How much you have to pay up front will depend on multiple factors, including the insurance company, the payment plan you choose, your driving history, age, gender, and more.
Yes. You’ll have to make a payment to enroll in a Progressive car insurance policy. If you decide to pay on a monthly basis, your first month’s payment might qualify as your down payment. Keep in mind, many insurers offer a discount if you pay the entire year’s premium in advance.
Yes. Hugo is a legitimate car insurance company that offers coverage for as little as three days at a time. It has no down payment or up-front fees, although you’ll have to pay an initial premium when you start a Hugo policy. Hugo is available in 15 states.
You’ll always have to pay something up front when you buy a car insurance policy. Usually, it’s a deposit based on the payment plan you choose. Your deposit is often your first month’s premium. If you buy a short-term policy from Hugo or Seven, you’ll have to pay the entire premium up front. And while Ocho allows you to finance your down payment interest-free over the life of your policy, you’re still technically paying a deposit.
Yes. All reputable insurers require some form of payment up front before you can get coverage. This is a way for insurers to reduce risk. You can expect to pay a lump sum that covers a down payment or your first monthly payment.
Every car insurance company requires a down payment in the form of the first month’s premium. But 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.
COUNTRY Financial and Auto-Owners are the cheapest car insurance companies, according to Insurify data. But not every driver may be able to get coverage from these companies.
If you’re on a tight budget, it pays to shop around for affordable rates and cheap car insurance. 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 factors, like your driving record, credit history, and ZIP code. Good drivers typically pay lower rates, while senior drivers and young drivers may pay more. You may find cheaper insurance with another company, so always compare quotes from multiple insurers before buying a policy.
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Sources
- Direct Auto Insurance. "About Car Insurance Down Payments."
- Progressive. "Can I get car insurance with no down payment?."
- Insurance Information Institute. "Background on: Pay-as-you drive auto insurance (telematics)."
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Sarah Archambault
Sarah Archambault enjoys helping people figure out how to manage their finances and credit. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans. Her work has been featured on Credit Karma, Experian, LendingClub, Sound Dollar and USA Today Blueprint. She also writes for national insurers, banks and financial institutions like Aetna, MassMutual, Stripe, and UnitedHealthcare.
Sarah has been a contributor at Insurify since December 2022.
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
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.
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.