It is a question that many people ask when they see the first month’s premiums with the deposit attached. Generally speaking, the deposit represents 10% to 15% of the total amount due for the insurance policy.
This translates into paying an additional one month on their insurance policy. The deposit represents coverage for the insurance company in case you cannot pay for the rest of your coverage. This is because monthly premiums are payments on a loan made by the insurance company that you are paying off.
How does no deposit policy help you?
For those on a budget or looking for insurance where they do not have to pay extra upfront, no deposit car insurance may be the answer. Read here more about ways to lowering your premium with no down payment policy.
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What is No Deposit Auto Insurance?
This is where you pay no deposit for your car insurance policy. When you get the bill for your first month’s premium, it will not include a charge for any deposit.
For example, if your regular monthly premium is $80, you would expect to pay roughly an additional $80 as the deposit. This is not the case when you have a no deposit policy as all you pay for are the monthly premiums.
In most cases, auto insurance companies do not charge a deposit if you pay for the entire policy in one payment. However, people on a budget or with little cash handy have enough difficulty making a single monthly payment. So, there are now auto insurance policies that have a very low or no deposit to make for those who prefer to pay on a monthly basis.
Low Deposit Car Insurance for Young Drivers:
For teens and young drivers that are facing high payments, getting cheap monthly car insurance with no deposit can save a considerable amount of money. A deposit generally adds 10% to the total insurance policy which means that instead of paying $600 for a six-month policy, you are adding $60 because of the deposit.
By taking away the deposit for qualified drivers, you are removing that added 10% to make it a more affordable policy. This can help teens and young adults find more affordable policies that fit their budgets. Plus, it can pay off in the future by getting even lower rates when they grow up and maintain a good driving record. The same theory is applicable for new drivers.
Car Insurance Companies that Do Not Require a Deposit:
There are a few car insurance companies that do not require a deposit or perhaps have a very low deposit. Two of the more prominent are Progressive and GEICO which happen to be among the largest insurance companies in the US. There are also smaller, more regional companies that may carry no deposit for your car insurance. Click here to find out the list of companies currently offering this type of privilege.
Who should be your suitable providers?
It is always important that you choose a reputable car insurance company when looking to save on your deposit. While the chances of getting ripped off by a fly-by-night insurance company are small, there are unscrupulous individuals that have created false insurance companies or those that have such rigorous standards to file a claim that it is impossible to use their services when needed.
So, apart from Progressive and GEICO which are very well established, you will want to fully check out the insurance company to make sure that they have the longevity and reputation of being around when you need them.
So, be sure that you only get your car insurance with no upfront payment from a reputable, well-established company. You’ll be glad you did if you should ever need to file a claim.
Benefits of “Car Insurance with First Month Free” Plan:
There are many advantages for those who qualify for no deposit auto insurance. You will have to qualify which usually means having a good credit rating or being with the insurance company long enough to build up a good track record of paying on time. All insurance companies have their standards, but for the most part you will simply need your most current credit report and payment information.
The advantages of having no deposit car insurance to pay upfront include, but are not limited to the following.
– Less to Pay Upfront
– Cheap Insurance
– Better Budgeting Opportunities
You are paying less for the same type of quality insurance that you have before. This means that you keep more money in your pocket while getting the same insurance coverage as before.
There are very few drawbacks to purchasing no deposit car insurance. However, be aware that most insurance companies that offer this type of policy may charge you higher premiums. This means that you will need to get free quotes from the insurance companies and compare their no deposit rates to those that require one.
You may find in some cases that the overall rate is the same which means that you do not save any money.
One more thing..
Also, it may be difficult to qualify for this type of insurance depending on your credit rating and history with the company.
Is it Worth Getting ?
The answer is definitely “Yes” as no deposit insurance offers substantial advantages. This is especially so right when it comes to your monthly budget as you can better plan for your payments with no deposit. Instead of having to add 10% to the first installment, you will simply pay the same amount every month which makes this the right policy for most people.
This applies in particular if you want to take advantage of lower rates as your driving record improves and you enter the age of paying less for your car insurance.
How to Get No Deposit Car Insurance?
The first step should be to check with your current insurance company to see if they provide this type of policy. If so and you qualify, you will not want to take action yet because it is possible that you might find a better deal with another company.
You’ll want to search out other insurance companies and find free quotes for a low or no deposit auto insurance policy.
You can request a free quote right here and get a great price on high-quality auto insurance that does not require a deposit. Why wait? Start saving money on your car insurance by getting a instant free quote from us and start putting more money in your pocket right now.