Zero Down Car Insurance

If paying a large premium upfront for your auto insurance coverage doesn’t fit your budget, you may benefit from zero down car insurance. This is especially true if you’re a student, living paycheck to paycheck, or have just used up most of your funds purchasing a car.

Auto insurance with a very low down payment is the best way to get the coverage you must have without paying a ton of money upfront.

First, you’ll have to find a company that offers this plan. Instead of making you pay you the entire amount of your six or 12-month policy before your coverage starts.

In exchange for waiving a down payment, you will be required to make your first month’s payment to get your coverage started. This means that you will have out-of-pocket costs initially, but it should be much less than you would pay otherwise.

Do You Qualify for Zero Down Car insurance?

Your insurance premium is based on the risk the insurance company is taking by insuring you. For example, if you have a bad driving record or poor credit history, you’re almost sure to pay more for your policy than someone who doesn’t. This also reduces your chances of qualifying for a 0 down car insurance policy, as the insurance company will likely consider you too risky.

Factors Providers Consider When Determining Your Premium

Other factors a car insurance company considers when calculating your premium and deciding whether or not you’ll get to pay a low or no down payment car insurance include:

• Your age: As you get older, your chances of qualifying for car insurance with no down payment increases. 

• The age and value of your car: If you are driving a newer model car with a reasonably high price tag, you may not be able to get zero down payment car insurance. Instead, you’ll be asked to put more money down, as the company is taking a higher risk by insuring you. On the other hand, if you drive an older, less expensive car, your chances of being offered with 0 down car insurance options increase.

• Your credit score: Your credit score is a significant factor in your ability to get insurance without a down payment. If you have good credit and a good driving record, you shouldn’t have any problem.

• The state you live in: Currently, there are only a select few states that offer no down payment policies. These include:
  • Arizona 
  • California
  • Georgia
  • New York 
  • Oklahoma 
  • Washington
  • Florida

• The insurance company: Not all insurance companies offer zero down car insurance options. Those that do include:
  • Allstate
  • Farmers 
  • Alliance 
  • Kemper 
  • Nationwide 
  • Progressive 
  • Safe Auto 
  • State Farm 

This is not a complete list. Other providers offer no insurance down options. This is why it’s a good idea to contact an agent to discuss all of your options, including available payment plans.

The Truth About Zero Down Payment

It would be best if you didn’t automatically assume a no down payment car insurance policy will save you money. It may cost you more money in the long run. The easiest way to explain this is by using an example.

Let’s say Company ‘A’ agrees to insure your car for $800 a year. The only catch is that you must pay the entire amount upfront. On the other hand, Company ‘B’ agrees to give you zero down car insurance policy with the same coverage amount. However, you’ll need to pay the first month’s premium to get the policy started. Your monthly premium will be $100. You happily pay the $100, thinking about all the money you’ve saved ($700 less than you would have paid Company A to start your policy). Later, you sit down and do the math. If you pay $100 a month, that’s $1,200 a year. That’s $400 more than the “cheaper” Company B.

If you can pay your entire month's premium upfront, it's a good idea to do so. Insurance companies will give you a discount.

However, if your budget won’t allow you to do this, a monthly premium with no down payment is likely your better option.

Choosing the Right Insurance Policy

When you shop for auto insurance, you’ll first need to decide what type of policy you want. While liability coverage is required in all 50 states, full coverage insurance is optional. In the event of an accident, liability doesn’t cover you or your car’s damages. For your vehicle to be covered, you’ll need collision coverage. This is included in most full coverage policies.

Full coverage is almost certain to increase your monthly premium. It's strongly recommended in most states and offers broader protection if you get into a severe accident.

Shopping Online for Car Insurance with No Money Down

Shopping around online is one of the easiest and most convenient ways to look for zero down car insurance policies. Simply enter “0” in the field that asks how much money you want to put down. The company may or may not accept this, but you’ll know for sure once you apply for a quote. Most customers can save $400 or more simply by shopping online for direct rates. If you already have a couple of quotes from agents, then get online and compare rates in just a few minutes. Chances are you can get cheaper rates online, but it’s always good to compare as many quotes as possible.

How to Get Cheaper Car Insurance

There are several things you can do to help yourself find cheaper car insurance. This includes:

1. Drive safely. In addition to protecting yourself on the road, driving safe is an excellent way to ensure your record stays clean. This will help keep your premium low.
2. Consider your deductible options. The higher the deductible you agree to pay, the lower your monthly premium will be. On the flip side, you will have to pay this amount if you are involved in an accident, which means you may have to come up with a big chunk of money later.
3. Reduce your driving time. The fewer miles you drive every month, the more likely you qualify for a discount for low mileage driving. To do this, you may want to look into carpooling, taking public transportation, or working from home.
4. Request automated payments. Some insurance companies will give you a slight discount when you sign up for automated payments. As an added advantage, you won’t have to worry about missing your payment.
5. Ask about discounts. Until you ask, you don’t know what discounts you may qualify for. For example, if you’re a student, in the military, or a first responder, you may receive a discounted rate. There are plenty of other discounts too.
6. Opt for the extras. Even if you don’t qualify for 0 down payment car insurance, a provider may still offer you extras for being a customer. For example, you may be allowed coverage for locksmith services, pet injuries, or transportation expenses following an accident.

DirectAutoInsurance.org is a site that allows you to get quotes from multiple insurance companies offering zero down car insurance. Fill out the requested info, and you’ll be on your way to getting quotes from the best insurance providers in the country.