Car ownership does not end with buying a suitable automobile; one must also invest in auto insurance. Although it seems like an additional expense, insurance provides financial protection in case the car suffers damages or meets with an accident in the future. This is why buying car insurance is mandatory in some regions. Fortunately, today, there are ways to save on an auto insurance policy without letting go of comprehensive coverage.
Possibility of no-cost car insurance
If one is wondering about the possibility of getting no-money-down car insurance or an auto insurance policy without any upfront payment, this package does not exist. All insurance providers demand an initial premium payment, down payment, or deposit. This upfront payment is a mandatory requirement. The policyholder pays the provider because the latter assumes the burden of providing financial protection to the customer and the vehicle in the future. The policy legally binds the provider to reimburse the policyholder if someone steals the vehicle or damages it. So, if the provider begins offering car insurance with no deposit or initial payment, it will lose money if the insured car gets into an accident and the policyholder hasn’t paid the premium. Additionally, the initial payment one makes is what secures the financial agreement with the company. This is why it is unlikely one will find an auto insurance provider that seeks no down or upfront payment.
So, when looking for car insurance providers and plans, one should be wary of companies offering policies with a $0 down payment. Even those offering incredibly low-cost plans, for instance, full coverage options for a $20 down payment, might be too good to be true.
Initial insurance costs
The car insurance provider determines the initial down payment amount for a new policy. The premium amount depends on whether the money will be paid annually, semi-annually, or monthly. Typically, the cheapest possible car insurance fee is when the insurer accepts a single month of coverage as the initial payment. A month of full coverage car insurance typically costs about $164 in the country, and the average minimum coverage costs $64 monthly. That said, some companies may offer even better low-cost, full-coverage car insurance quotes. In this case, one may have to make a small payment towards the first month’s bill and cover the rest later. This option may be available to one based on factors such as their driving history and credit score.
Tips to save money on car insurance
While it is difficult to find insurance without any upfront payment, one might be able to save money on car insurance.
1. Take steps to negotiate the price
One can get a better quote by assessing exact requirements. Based on their needs, they can choose a car insurance plan that only provides necessary coverage and does not come with expensive riders one may not use. Additionally, one can always look for discounts during policy shopping. For existing auto insurance policies, it is important to file claims wisely. The less one files for insurance, the cheaper their plan gets.
2. Check the duration for the deposit
Insurance companies may offer choices to customers when it comes to down payment. For instance, they may ask one to pay for the first 30 or 45 days as the policy deposit. If they offer 45 days, one can consider requesting a 30-day deposit duration. That said, one must note that a higher upfront down payment will lower monthly payouts, as a bigger portion of the premium would have been paid at the beginning.
3. Choose the right payment method
Insurance companies charge fees on some payment methods or plans and offer discounts on others. So, one should opt for a no-cost premium payment method to avoid unnecessary expenses. For instance, an automatic electronic funds transfer can reduce the service fee.
4. Compare quotes
As one may be unable to find extremely cheap car insurance with no deposit requirements, one can look for an option with a low deposit. The easiest way to find cheap insurance is by seeking quotes from different companies and comparing them. Additionally, one should review terms set by multiple providers to choose the most favorable option.
5. Pick the right payment schedule
Car insurance providers accept monthly or quarterly premiums or lump sum payments once or twice a year. The right payment schedule is dependent upon one’s requirements. Monthly premium payments can seem affordable to those on a budget, but here, the provider could charge an installment fee on each payment. This would increase the overall insurance cost. So, opting for semi-annual or annual payments can help one save more in the long run, especially if the provider also offers a discount on the full upfront payment.
6. Opt for pay-per-mile insurance
Pay-per-mile or pay-as-one-goes insurance is recommended for low-mileage or safe drivers. It only requires premium payment based on distance driven rather than a flat fee. It may involve a base monthly/daily charge and an additional charge for each mile driven. While such policies reduce costs, they may not offer full coverage.
7. Seek usage-based discounts
A car insurance provider might also lower the monthly premium payment if the policyholder opts for the telematics program. Here, the provider uses a plug-in device or its proprietary app to track the customer’s driving habits and track the car speed, how hard the driver presses the brake, how long they drive, and more. Based on the data, the provider may determine the premium. So, safe driving habits can help one save money here.