No deposit car insurance sounds great but is it possible? Hypothetically, there is no such thing as a ‘no deposit’ auto insurance policy. You have to pay a minimum amount upfront to get a policy. There are ads like ‘car insurance without upfront cost’ or ‘no deposit monthly auto insurance’ but they are associated with initial deposit money spread across the year. It helps to avoid paying the entire down payment at once. In reality, it is a low deposit insurance arrangement that you have to pay entirely in installments along with interest.
To take out an insurance policy without putting down a deposit, you need to use the comparison tool on the Money Expert portal. With the number of insurance companies offering an array of online services, it is challenging to uncover a cheap and suitable car insurance coverage plan. On Money Expert, compare 100 quotes from different providers around the UK in less than a minute.
1Which are the best no upfront car insurance options?
Over the past decade, car insurance costs are skyrocketing, so drivers look for cheaper deals with low monthly or deposit options. People tight on the finances but need to drive ASAP can opt to pay a monthly auto insurance policy.
In reality, you will pay the first-month installment that is regarded to be the deposit amount. You need to pay 20% of the policy value upfront. Some low deposit policies need drivers to pay 10% in the first month. However, the overall insurance cost down the road is considerably higher.
2Is a monthly auto insurance policy cheaper?
No, accessibility comes with a price. Premiums for insurance can be more than £1000, which is hard for the majority of car owners, so monthly payment can reduce the stress. Nevertheless, they need to know that paying monthly is more costly as the insurer adds 10 to 30% interest on this option. It is the cost for accessibility you pay.
For example, you receive two policy quotes from an insurance provider –
- Upfront payment of £1000 [in lump sum]
- Upfront deposit of £250 followed by £100 installment for 10 months.
If you choose the second option then you will pay £250 more for the same policy. The benefit is you will gain the convenience to pay in installments. Everyone cannot afford to pay in lump sum, so they opt for the second option.
3Is it possible to find a no deposit auto insurance policy with bad credit?
It is a fact that higher scores are equivalent to receiving better deals. You can find a monthly car insurance policy with bad credit but at a high price. Generally, the interest rates charged are around 10% to 30% on policy value but with bad credit, you will need to pay higher than drivers with good credit.
If you are unable to pay in a lump sum then you can pay a low down payment using a credit card. Insurers have affiliations with credit card providers. If you are lucky, you can receive discounts, waivers, or 0% interest on monthly auto car insurance. If your credit history is good there will be no need to pay the high down payment charges on car insurance.