No down payment auto insurance is a very attractive proposition for desperate motorists with hardly any money to spare for premiums but it is just a marketing trick or word play to get people through the door. There is no such thing as no money down vehicle insurance. And if there is, you shouldn’t be buying because no legitimate company would sell it and it may not even be possible in some states.
Although many try their best to be flexible about premium payments, all car insurance companies want a large enough initial payment 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 liability automobile insurance coverage to show financial responsibility. As part of this requirement everyone is required to carry proof of insurance 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. Besides, states like California require vehicle insurers to share their liability policy sales and inform the state when a policy is cancelled.
Technically full premium is due at the start. However, most insurers allow their policyholders to 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 providers would check applicants’ credit scores 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 car insurance companies would accommodate requests to spread the premium costs over time so 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.
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 their 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 to settle the first month’s premium and set up an automatic bank transfer for the following months.
It is almost impossible to find a company issuing policies without getting any money. At best, you may be able to spread the cost with low down payment. But you probably don’t get the best price if your priority is to spend as little as possible at the start.
Zero down auto insurance arrangements of any kind 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 legal 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.