Is it Possible to Find Cheap or No Down Payment Car Insurance?
If you need car insurance, but you don't want to put down a large down payment, you may be wondering if you can find "no down payment" car insurance. Is this type of policy available, and if so, how can you find it?
Unfortunately, "no down payment" car insurance is rarely available. Since an insurance policy is a contract, and there must be "consideration" (i.e., payment) for the contract to be valid, insurance companies are not willing to extend coverage without a down payment.
Some companies will, however, issue a "binder" for insurance coverage. A binder locks in your policy rate and begins your coverage, so long as the down payment is made within a short period of time - usually a few days after the binder is issued. If the down payment is not made on time, it is as if the policy never existed, and any losses incurred during the binder period will not be covered.
While it is very difficult to find "no down payment" car insurance, there are ways you can minimize the amount of your down payment. You can look for an insurance company that allows customers to make monthly installment payments - in many cases, these companies will let you start your policy with just the first month's premium payment. For most consumers, this is far less painful than paying for a full policy term up front.
Also, be sure to ask your agent if the company charges a "policy initiation" fee, "application fee", or similar charge. Some companies charge as much as $40 or more to cover administrative costs when you start a policy, and this fee can dramatically increase your down payment. If you want to keep your down payment as low as possible, look for a company that does not charge an application fee.
Also, keep in mind that your company may charge fees for installment payments - these fees can be as high as $10 per month. In the long term, this can cost you quite a bit of extra money.
While "no down payment" car insurance may not be readily available, using these strategies will help you keep your down payment as low as possible.
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