No down payment auto insurance is a very attractive proposition when you are desperate to insure your car and have hardly any money to spare for premiums. Indeed few companies 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 insurers try their best to provide flexible payment options most reputable companies would have larger payments at the start to reduce cancellations. This larger initial payment acts as deposit or down payment.
There are several problems with selling 0 down auto insurance. One of them is that state authorities require minimum 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 payment or large upfront payment to issue these forms.
Technically full premium is due at the start of a policy. However, most insurers allow their policyholders pay premiums in varying installments. This is in a way a credit arrangement and most companies charge for this service under either installment fee or interest. And most insurers would check credit before they agree to extend credit to policyholders. Since most vehicle insurance companies check credit anyway this may not be an issue as long as you are creditworthy.
In short, most companies would accommodate requests to pay premiums in installments that you don’t desperately need to look for companies offering no money down car insurance. Furthermore, no self-respecting company will agree to sell you a policy without any upfront payment. 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 auto insurance when you can check for the best prices from the whole of the market and then come to an amicable premium payment arrangement with the most affordable carrier.
Looking for No Money Down Auto Insurance?
Here are the reasons why most motorists don’t need to specifically look for policies that don’t require immediate money outlay.
- Most insurers offer various payment options including monthly that makes month-to-month car insurance not a specialty. So, don’t limit your options and tie your hands by just checking the companies that advertise such policies.
- 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 automobile insurers who are trying to position themselves as 0 down car insurance providers 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 your next payment is due. So, no such thing as no money down automobile insurance, indeed. It is just a word play.
- You can shop for cheap rates and save money if you can address the payment pressure. Perhaps, it is cheaper to solve your current money 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 lapsed coverage. This can put them in a difficult situation since they need insurance to drive and may be heavily dependent on having own transport.
You may come across companies specialising in insuring non-standard drivers who aren’t preferred by other insurers. The problem is that these companies aren’t usually as reputable and they still require some initial payment. Probably you still have to pay for the first month’s premium and set up an automatic bank payment 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 find few companies that offer low down payment auto insurance as mentioned above. But you probably don’t get the best price if your priority is to pay as little as possible at the start.
Maybe some agents and brokers can arrange buy now pay later car insurance for some of their clients based on their own payment schedule to the insurers, if they accept payment 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 Car 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 believe in insurance but have to buy a policy for various reasons. Secondly, if they were offered coverage with no down payment they wouldn’t want to pay at a later stage, unless they have a claim that makes things even more complicated.
No deposit auto 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 any payment would open up a wormhole to all sorts of problems, unless they are absolutely sure that the person will pay.
Various companies position themselves to capture different segments in a marketplace that is highly competitive in terms of price, innovation and quality of service. Your circumstances may not be perfect but most people compromise anyway. There is a high chance you will find a company that can offer you affordable automobile insurance with low down payment. Your best option is to get a few quotes, check their payment options and pick the best option.