You may believe that all car insurance is alike in that you must pay a deposit if you want to pay month-to-month. However, many insurance companies offer zero deposit car insurance that does away with the deposit so that you only pay the monthly premiums.
What is No Deposit Car Insurance?
This type of insurance does not charge you a deposit for paying month-to-month on your premiums. Consider that the deposit is a security charge for the insurance company who is loaning you the insurance coverage that you are paying off on a monthly basis. A no deposit plan means that you do not have to pay a cover fee for your payment schedule.
You may have noticed that if you pay off your entire insurance policy at once, they offer a 10% off saving which is really you not having to pay a deposit. No deposit is needed if you pay off your insurance all at once. However, if you cannot afford to pay off everything at once, then a deposit is needed unless you go with a policy that does not require one.
Who Qualifies for No Deposit Auto Insurance?
You can qualify for such a policy if you meet the guidelines set out by the insurance company. While they can vary somewhat between companies, most will have the following requirements;
- Good Credit History
- Good Payment History with the Insurance Company
Just like having good credit and a good payment history will get you a lower interest rate on loan, so too does having good credit and payment history get you a no deposit policy. There may be other requirements that are listed with the insurance company, but for the most part, you should be able to obtain a zero deposit insurance policy if you have good credit.
When Do You Need Such a Policy?
Getting very cheap no deposit car insurance is a good deal for everyone at any time. However, there are particular times in which such a policy will work well for you.
- When You Cannot Pay Off Your Insurance at Once
- When You Want to Pay Without Surprises
- When You Need to Save Money to Pay for Something Else
If you cannot pay off your car insurance at once, then you should get a no deposit policy. This is something that applies to anyone who wants to save money. Another advantage of no deposit is that your bill remains the same month-to-month so that there are no surprises. There are few things as pleasant as getting a deposit and monthly premium payment tied together which can throw off your budget.
Plus, when you need to pay for other things, a no deposit policy offers peace of mind in knowing that your monthly rates will not change. So, if you are looking for an option that saves you money and evens out your premium payments for car insurance, going with a no deposit option is the best move.