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Can you buy car insurance with no deposit?

You want to buy car insurance with no deposit necessary. Many sites claim that you can get motor insurance without paying anything at all in advance. But is this true? We have compared hundreds of quotes and you can

see the latest results here!

Does it exist?

Our tests indicate that EVERY car insurer will require something upfront. Some of them will not accept monthly payments at all, at least from inexperienced drivers. However there are ways round it: see the FAQ

Does it cost more?

There are usually management/interest charges, but there is more to it than that. Since some insurers, including several that offer very favourable premiums, insist on large deposits (or refuse to accept monthly payments at all) your choice of which insurer to go with could be limited.

How much deposit would I have to put down?

If you are a younger motorist, or have little driving experience, you should expect to have to put down a minimum of 20% of the premium and possibly much more. Those over 50, though, have a far better chance of getting away with a smaller sum.

If you want to buy car insurance without paying a large deposit upfront,it usually costs more than it would if you paid the whole lot in a lump sum right at the start of the policy. However there ARE ways of reducing your premium, perhaps substantially, so you might still pay less, and still get monthly payments. See how you might get cheaper insurance ...

How to get lower quotes

Can I really buy car insurance without an upfront payment?

Every insurance company will need something paid in advance before a policy is issued. Anyone who claims otherwise is simply not telling the truth. How much deposit you will have to put down (typically 20%, but it can be a lot more or less) will vary from one insurer to another, and our research shows that your age and driving experience may have a great effect on just what kind of deal you are offered. We have also found that minimum deposits can vary according to which price comparison site you use.

This underlines the fact that in order to get the lowest possible quotations you need to compare quotes on several sites, not just one.

Does paying monthly cost more?

Insurers almost invariably charge extra for extended payments, in the form of interest or management charges. However, some insurers are reluctant to offer monthly paid plans at all, particularly to younger or less experienced drivers. This means that, if you cannot afford (or don't want) to pay for your cover in advance you won't be able to buy a policy from these companies, even if they offer the cheapest quotes, which is often the case.

So; you can be forced to accept a higher priced policy, as well as pay interest charges on it.

Why is this?

If you only put down a small sum at the start of a policy, and pay the rest off over the rest of the year, you are in fact taking out a loan. This is not what insurance companies want to do; they like to get the full premium right at the beginning and invest it. Insurance companies have traditionally been amongst the biggest investors on the stock markets and this is how some of them have become financial giants.The fact is, though, that there is a huge demand for policies with payments spread over time so insurers have had to make compromises. Some of them finance these loans out of their own funds and some arrange for independent finance companies to provide them.

Will this appear on my credit record?

yes. Successfully completing all the payments due under the contract could have a positive affect on your credit rating, although the opposite is also true.

Could I be turned down because of poor credit?

because this would be a loan, the potential lender would look at all the relevant factors before deciding whether to offer it or not. The motorist's credit rating would be one of those factors, as well as others, including age, postcode and employment.

Could I cancel a monthly policy?

you have a right to cancel any car insurance policy at any time. However, the insurer is entitled to make a charge for this. Cancellation charges have to, by law, be clearly spelled out in the documentation which must be made available to you before you buy the policy. If you have paid a large deposit and the policy has only been in force for a short while you may be entitled to some of the premium back; but if you only paid a fairly small deposit you could find yourself having to pay substantial charges if you cancelled before the full premium had been paid.

Is there no way at all, then, of getting insured if I don't have a deposit?

Finally though; please don't even think about driving without insurance. Even ignoring the consequences that an uninsured accident could have for you, the police have many very effective ways of catching uninsured drivers. The penalties for driving without insurance are severe, and that's without considering the effect it could have on your future insurance premiums.

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This site is owned and managed by No Deposit Ltd of Kemp House, 152 - 160 City Road, London, EC1V 2NX. Telephone: 0330 311 2615. Registered in England no. 11788202. Registered office: 20-22 Wenlock Road, London, England, N1 7GU.

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This site does not offer any financial advice. Before entering into any contractual agreements you should read all documentation carefully and seek professional advice if necessary.