Cheap Full Coverage Auto Insurance With No Down Payment

Most auto insurance policies start with an initial down payment. The down payment for auto insurance is a percentage of the annual rate due upfront. Cheap full coverage auto insurance with no down payment may exist, but this type of policy is not offered in all states nor by all auto insurance companies. Even though auto insurance with no down payment may save you cash out of pocket, it can end up being more expensive in the long term.

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Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Written by Sara Routhier
Director of Outreach Sara Routhier

Cynthia Lanctot is an insurance professional with ten years of industry experience. Cynthia is licensed in several states, and holds an associate in claims law, as well as a bachelor’s degree in English. Cynthia’s experience includes the New England and Northeast states. She currently works as a liability claims professional and an occasional online contributor.

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Reviewed by Cynthia Lanctot
Licensed Agent Cynthia Lanctot

UPDATED: Mar 31, 2022

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A Concise Overview

  • Auto insurance policies typically start with a down payment or percentage of the annual rate
  • There are auto insurance companies that offer full coverage policies with no down payment
  • Not paying a down payment can save out of pocket expenses but is usually more expensive in the long run

When searching for a car insurance policy, the nuances surrounding rates, coverages, premiums, and discounts can be overwhelming. Furthermore, suppose you see an auto insurance policy with the coverage you need but requires a down payment. Like most shoppers, the high upfront cost can be a deterrent. You may be asking, “Is there full coverage auto insurance with no down payment near me?”  

Auto insurance without a down payment is offered in some states by a few different companies, so the availability near you may vary. Buyer beware that no down payment auto insurance policies can end up costing more in the long run. While you’re searching for cheap full coverage auto insurance with no down payment, enter your ZIP code to compare quotes from top auto insurance companies.

What is full coverage auto insurance with no down payment?

Most auto insurance companies require an upfront payment to initiate a policy. The name for this upfront payment can differ among auto insurance companies and is often called a deposit or down payment.

The down payment for an auto insurance policy typically equals 10-30% of the annual rate. Sometimes companies may frame the down payment as paying the first two months upfront.

There are auto insurance companies that offer car insurance with no down payment. Companies may call these options ‘buy now, pay later’ auto insurance. These insurance policies waive the initial out-of-pocket cost so you can get instant auto insurance with no down payment. Some top companies offer inexpensive options such as $20 down payment car insurance.

No down payment can save money at first, but the long-term investment is typically higher.

No down payment auto insurance commonly takes the waived down payment and incorporates it into your monthly rates. This setup can cost the insured hundreds more per year than auto insurance that requires a down payment.

Down payments help protect the insurance company from drivers who only want to cover their bases with one-day insurance. Often these drivers will pay the first month’s rate to demonstrate that they have insurance. After the first month, they may default on their auto insurance payments. These customers are less likely to abandon their auto insurance policy when they have an upfront investment.

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Is auto insurance with no down payment cheap?

How can saving money upfront end up costing more in the long run? By waving the initial down payment, your annual rates can end up costing more. Insurance companies add the down payment and associated fees to the monthly rates for the insurance policy. Overall, no down payment insurance can cost the insured hundreds of dollars more than a traditional policy that requires a down payment.

For example, you find an auto insurance company that offers the same policy in both structures. They have quoted you $3,000 annually or $300 a month with no down payment. The required down payment is 20% of the annual rate for this hypothetical policy. Your upfront cost would be $600, and your monthly rates would end up being around $200. Over the insured year, the option with no down payment would end up costing $600 more than the traditional option.

Over the insured year, the option with no down payment would end up costing $600 more than the traditional option.

After doing the math, it’s easy to see that you’ll save more money by paying a down payment in most cases. The problem is that not everybody can afford a large upfront investment. Having insurance isn’t a choice for many Americans. All 50 states legally require a minimum auto insurance coverage called liability insurance to be road legal. Also, many other states require more comprehensive auto insurance coverage for drivers. It’s essential to know the difference between coverages and which type of policy best suits your needs.

What kind of auto insurance coverage do you need?

If you live in a state that only requires liability car insurance, your options are more affordable. Liability insurance is the basic minimum coverage necessary to comply with federal law.

Liability insurance covers damages caused to others’ property or person in the event of a collision. Liability is required in all 50 states, and without liability insurance, you could face costly consequences. 

If you are involved in a collision and do not have insurance, the other party can sue you in civil court to pay all damages.

Because it is the law, if you drive without any car insurance, you could be required to pay fines, and your license could get suspended, thus increasing your rates in the future. If you are involved in a collision and do not have insurance, the other party can sue you in civil court to pay all damages.

Liability insurance does not cover damage done to your vehicle or yourself in a collision. These circumstances are when full coverage car insurance is doubly helpful. 

What is full coverage auto insurance?

Different parts make up full coverage insurance policies. You may have seen collision and comprehensive insurance available from top car insurance companies. Collision insurance helps you pay for damages to your vehicle following an accident, while comprehensive coverage pays for damages not resulting from a collision.

No state has a law explicitly requiring full coverage car insurance. However, if you are leasing a car, financial institutions often require the lessee to hold a full coverage insurance policy. Full coverage car insurance ensures that the vehicle has protection in the event of almost any damage. This safeguard is vital to the bank or lender, as it defends their financial interest in the vehicle.

Full coverage auto insurance is an excellent investment if you can afford it. If you are involved in a collision, especially with an uninsured driver, you can be sure that your car can be repaired and get back on the road for a lower out-of-pocket cost. Additionally, many full coverage auto insurance policies offer some medical coverage to help pay for any injuries sustained in a collision.

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Does cheap full coverage insurance exist?

If you can’t afford the extra cost of full coverage insurance but still want more protection than only liability insurance will offer, you have options. Most auto insurance policies provide optional add-ons to their basic coverage. These add-ons can be an affordable way to get extra protection in the event of a collision.

Another way to save money and find cheap full coverage insurance is through discount programs. Top auto insurance companies offer different discounts for their customers, and one of the most common discounts is the safe driver discount. Safe driving discounts often work with telematics devices, the small instruments that track driving behavior. 

Another way to save money and find cheap full coverage insurance is through discount programs. Top auto insurance companies offer different discounts for their customers.

Telematics devices plug into the onboard diagnostics (OBD) port of vehicles newer than 25 years old. They monitor speed, acceleration, abrupt stops, and other driving behavior associated with higher risk. By enrolling in a safe driving discount program, you can prove directly to the car insurance company that you are a low-risk driver. These programs might make you eligible for lower rates on your car insurance policy.

Younger drivers can also get discounts through good student programs. Good student programs provide an incentive for students to perform well in school, which carries over to a discount on car insurance rates. Another way to save on car insurance is pay-as-you-go car insurance, which can help save money if you drive less than the national average of 10,000 miles per year.

How do you get cheap full coverage auto insurance with no down payment?

Auto insurance policies come with so many factors that finding the best rate for your situation can be overwhelming. When you find the right coverage, the high upfront cost in the form of a down payment can often be a deterrent. No down payment auto insurance does exist, but it is usually more expensive over the long term. If you want to find cheap, full coverage car insurance with no down payment, you must explore all options to find the best rates. To find the best car insurance for full coverage, enter your ZIP code to compare quotes from top auto insurance companies for free.

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