No down payment auto insurance is a very attractive proposition when you are desperate and have hardly any money to spare for premiums. Indeed few outlets target drivers just like you. However, is there such thing? Are the companies, agents or websites promoting such policies offering an amazing solution or is it a trick to get you through the door?
Although many try their best to be flexible about premiums most reputable names would want larger amounts at the start to reduce cancellations. This larger initial outlay acts as a deposit.
There are several problems with activating policies before seeing any money. One of them is that state authorities require minimum coverage to show financial responsibility. As part of this requirement everyone is required to carry a proof and companies have to provide it. Providing drivers with proof of financial responsibility even though they haven’t made any financial commitment is defying the laws. This position becomes even more evidently problematic when you are required SR-22 and that is why most insurers would want full sum or large upfront outlay to issue these forms.
Technically full amount is due at the start. However, most providers allow their policyholders spread the cost. This is in a way a credit arrangement and most of them charge either a fee or interest for this service. And many would check credit score before they agree to extend credit. Since most companies check credit anyway this may not be an issue as long as you are creditworthy.
In short, most carriers would accommodate requests to spread the costs over time that you don’t desperately need to look for something that may not be there. Furthermore, no self-respecting underwriter will agree to place you on risk without getting paid something. The most you could expect is upfront payment for the shortest period and that is at best a month.
So, don’t put yourself in a disadvantageous position by searching for zero down automobile insurance when you can check for the best prices from the whole of the market and then come to an amicable premium plan with the most affordable carrier.
Looking to Buy Coverage with No Money Down?
Here are the reasons why most motorists don’t need to specifically look for policies that don’t require immediate outlay.
- Most carriers offer various options including monthly that makes month-to-month car insurance not a specialty. So, don’t limit the alternatives by just checking the ones that advertise such great solutions.
- If you do, you may overlook a few things like expensive price and not recognized carrier since you believe that they are doing you a big favor.
- Those who are trying to position themselves as such are usually non-standard companies with higher rates than the traditional providers.
- At the end, you will realize that you will have to pay at least for “time on risk” until the next one is due. So, no such thing as no money down vehicle insurance, indeed. It is just a word play.
- You can shop for cheap rates and save if you can address the cash shortage. Perhaps, it is cheaper to solve the current issues with a credit card or bank overdraft. And perhaps it is more manageable with premium installment plans than you first thought?
Does Any Company Sell No Down Payment Car Insurance?
Unfortunately, some people may struggle to find an agreeable installment plan, especially if they have poor credit or history of a lapsed policy. This can put them in a difficult situation since they need coverage to drive and may be heavily dependent on having own transport.
You may come across firms specialising in non-standard drivers who aren’t preferred by others. The problem is that they aren’t usually as reputable and they still require some sort of monetary commitment to activate a policy. Probably you still have settle the first month’s premium and set up an automatic bank transfer for the proceeding months.
It is almost impossible to find a company issuing policies without getting any money for obvious reasons. At best, you may be able to spread the cost with low down payment as mentioned above. But you probably don’t get the best price if your priority is to spend as little as possible at the start.
Maybe some agents and brokers can arrange buy now pay later coverage for some of their clients based on their own schedule, if they collect premiums on behalf of insurers. But this would be a rare case where the agent knows the person very well to become a guarantor. Otherwise, it is a very risky and unethical move.
Issues with Zero Down Auto Insurance Arrangements of Any Kind
It is practically unworkable and anyone who has any experience in the industry would know it. First of all, it attracts the wrong type of people who don’t accept its usefulness but have to buy it for various reasons. Secondly, if they were offered coverage with no payment down they wouldn’t want to pay at a later stage, unless they have a claim that makes things even more complicated.
No deposit automobile insurance can create all sorts of moral hazards that go against the foundation of the system. So, anyone naïve enough to put someone on risk without seeing the money would open up a wormhole to all sorts of problems, unless they are absolutely sure that the person will honor it. It is hard to come by with such scenarios in a world in which most transactions are faceless or even on the Internet. So, you may be back to square one.
Various companies position themselves to capture different segments in a marketplace that is highly competitive in terms of price, innovation and quality of service. The circumstances may not be perfect but most people compromise anyway. There is a high chance you will find one that can offer you affordable prices with low initial outlay. The best option is to get a few quotes, check if you are allowed to spread the cost and pick the best option.