Tips to Find ‘No-Down-Payment’ Car Insurance – If you’re buying a new car, it’s imperative that you opt for “no down payment” auto insurance, which is widely touted online, can be attractive. After all, your budget may be stretched to the max, and making big auto insurance payments on it may seem nearly impossible
Unfortunately, the term “no down payment” is a misnomer. Any major insurer will ask you to pay a certain amount upfront before it can cover you – whether the insurer calls it a down payment, a first payment, or something else. Even so, you may be able to find auto insurance with a relatively low initial outlay. Here’s how to do it.
“No down payment” auto car insurance is a misnomer. You have to make a prepayment for coverage.
However, you may be able to start your coverage by only making payments in the first month.
In general, paying for insurance at once is cheaper than paying in installments.
You can reduce your insurance costs by choosing the right coverage and deductibles and also inquiring about double discounts or promotions.
What Is “No Down Payment” Car Insurance?
In many cases, websites that advertise no-deposit auto insurance are misleading – or worse. When legitimate websites refer to no-deposit auto insurance, it often means car insurance that doesn’t require more upfront money than the first monthly payment for your policy, which can vary from insurance company to insurance company in each country. very different, and that’s the definition we’re going to use here
Pros and Cons of “No-Down-Payment” Car Insurance
Auto insurance policies are typically sold for a term of six months or a year, with the option to renew them after that. Generally, you’ll have a choice of paying the entire premium in a lump sum or as a series of monthly installments. When you take out a policy by making only a first month’s payment, you’ll reduce your initial out-of-pocket costs. However, many insurers charge fees for monthly payments or offer discounts for lump-sum payments, so it’s generally cheaper in the long run to pay the whole bill upfront. Of course, not everyone can do that.3
Where to Find “No-Down-Payment” Car Insurance
To find a policy with a minimal initial payment, you’ll need to shop around. You can get price quotes either directly from insurance companies or through comparison websites that feature a variety of insurers. But before you buy any policy, make sure you’re dealing with a reputable company.
Here are five ways to check out insurance companies:
- Go to the major credit-rating agencies. A.M. Best and Fitch Ratings, for example, grade insurers according to their financial health. Knowing that your company is financially solid gives you some assurance that it will be able to pay up if you ever have to file a claim. This may be more important with insurance you plan to keep for many years before you’re likely to need it—such as life insurance or a long-term care policy—but it’s still a useful indicator of the kind of company you’re dealing with.
- Check with the Better Business Bureau. Its Search Businesses and Charities tool can help you locate auto insurers that serve your area. It also grades the companies and lists any complaints it has on file about them.
- Visit the National Association of Insurance Commissioners (NAIC). Its Consumer Information Search tool lets you look up a particular insurer, learn whether it’s licensed to do business in your state, and see any complaints the NAIC has on file.
- Explore state insurance departments. Some of them publish consumer complaint data on their websites. What’s more, if you’re having difficulty finding coverage because of a poor driving record, your state insurance department may be able to help. A number of states have special insurance programs for people who are considered high-risk drivers and otherwise would be unable to get insurance.3 4
- Consult an independent insurance agent in your area. Independent agents work with more than one insurance company—unlike so-called “captive agents” who represent a particular insurer. They can recommend reliable companies and help you comparison shop. An independent agent should also be familiar with the insurance rules in your state, including the types of coverage you’ll need and the minimum required amounts.
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