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“No-Deposit” Car Insurance and How to Get Very Cheap Coverage
Lead Writer | Auto insurance
Assistant Assigning Editor | Auto insurance
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Key insights 💡
There is no such thing as no-deposit car insurance. All insurers require payment before activating coverage.
You can lower your initial payment by taking advantage of discounts, only purchasing coverage you need and comparing rates to find the cheapest insurance company for you.
Your first car insurance payment can be as low as $29, according to NerdWallet’s August 2024 analysis of minimum coverage rates from the country’s largest insurers.
A car insurance “deposit” counts toward your total premium. It’s not an additional fee.
Car insurance with no deposit doesn’t exist. Legitimate insurers require some money down before they’ll provide coverage. The good news is that an auto policy’s initial “deposit” isn’t a separate fee, but the first payment you’ll make towards buying and maintaining your coverage.
Most auto insurers will let you either pay in monthly increments or in full for the entire policy period, which is typically six months or a year. If you’re looking for the lowest possible payment to start your auto insurance coverage, the cheapest option will likely be to pay only your first month’s premium payment.
Even though you’ll have to put some money down to get car insurance, your initial payment doesn’t have to be astronomical. Read more to learn how to find cheap car insurance with a low initial payment.
How to find car insurance with a very cheap “deposit”
Just because a policy requires a payment upfront doesn’t necessarily mean you’re overpaying for your auto insurance coverage. Still, there are ways to make sure you are paying as little as possible in that first transaction.
Here’s how to lower your first car insurance payment.
Keep in mind, paying for the full six or twelve months of coverage can end up being cheaper in the long run if your insurer offers a pay-in-full discount.
» MORE: How to get cheap car insurance
How much does a car insurance initial payment cost?
The initial payment for a car insurance policy can be as low as your monthly policy rate, and can vary based on the overall cost of your policy and the payment plan you agree upon with your insurer.
Cheapest car insurance “deposits” for minimum coverage
Below are the five cheapest large insurers for minimum coverage, according to NerdWallet’s August 2024 analysis, along with their median annual and monthly rates.
| Company | Median annual rate | Median monthly rate |
|---|---|---|
| Geico | $351 | $29 |
| Travelers | $431 | $36 |
| State Farm | $469 | $39 |
| Progressive | $493 | $41 |
| American Family | $505 | $42 |
| USAA* | $309 | $26 |
*USAA is only available to military, veterans and their families.
Cheapest car insurance “deposits” for full coverage
Below are the five cheapest large insurers for full coverage, according to NerdWallet’s August 2024 analysis, along with their median annual and monthly rates.
| Company | Median annual rate | Median monthly rate |
|---|---|---|
| Geico | $1,303 | $109 |
| American Family | $1,323 | $110 |
| Travelers | $1,412 | $118 |
| Progressive | $1,772 | $148 |
| Nationwide | $1,905 | $159 |
| USAA* | $1,175 | $98 |
*USAA is only available to military, veterans and their families.
» MORE: Average cost of car insurance
Cheap coverage could leave you underinsured
When you’re shopping for a policy with a very low monthly payment, keep in mind that it may offer very limited coverage.
The absolute cheapest policies will provide only the minimum-required coverage in your state, which typically only includes a limited amount of liability insurance. This pays for damage and injuries you may cause to others in an accident, up to your policy limits. But it won’t cover things like damage to your car or for your own injuries if you’re hit by an uninsured or underinsured driver. In most cases, your state’s minimum required limits are probably not enough to protect you financially in the event of a serious accident.
Before you buy the cheapest car insurance you can find, make sure you're getting enough coverage to protect you financially. Unsure of what the different types of car insurance are? Use our tool below to learn about what each type pays for.
NerdWallet averaged rates based on public filings obtained by pricing analytics company Quadrant Information Services. We examined rates for 35-year-old men and women for all ZIP codes in all 50 states and Washington, D.C. Although it’s one of the largest insurers in the country, Liberty Mutual is not included in our rates analysis due to a lack of publicly available information. Poor credit rates from The Hanover were removed in both Connecticut and New York.
In our analysis, “good drivers” had no moving violations on record; a “good driving” discount was included for this profile. Our “good” and “poor” credit rates are based on credit score approximations and do not account for proprietary scoring criteria used by insurance providers. These are median rates, and your rate will vary based on your personal details, state and insurance provider.
Sample drivers had the minimum required coverage by law in each state. Some policies include additional coverage at the insurer’s discretion.
For our analysis of full coverage car insurance rates, sample drivers had the following coverage limits:
$100,000 bodily injury liability coverage per person.
$300,000 bodily injury liability coverage per crash.
$50,000 property damage liability coverage per crash.
$100,000 uninsured motorist bodily injury coverage per person.
$300,000 uninsured motorist bodily injury coverage per crash.
Collision coverage with $1,000 deductible.
Comprehensive coverage with $1,000 deductible.
We used a 2021 Toyota Camry LE for all drivers and assumed 12,000 annual miles driven.
We used the same assumptions for all other driver profiles, with the following exceptions:
We changed the credit tier from “good” to “poor” as reported to the insurer to see rates for drivers with poor credit.
For drivers with one at-fault crash, we added a single at-fault crash that happened six months ago, resulting in $10,000 in property damage and no bodily injury claim.
For drivers with a DUI, we added a single drunken driving violation that happened six months ago.
For drivers with a ticket, we added a single speeding violation for driving 16 mph over the speed limit.
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