If you need to get your car insured but are low on cash, the idea of $20 down payment car insurance might sound appealing. After all, it’s less money out of your pocket, and once insured and registered, your car will be ready to drive. Though you might have seen $20 down payment car insurance online, don’t sign up for that policy just yet.
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Companies advertise $20 car insurance as a low down payment policy option. Unfortunately, policies that are this cheap – or policies that supposedly require no down payment at all – are often a scam.
Insurance companies are assuming financial risk when they insure you, and your down payment seals that agreement. In most cases, an insurance company will charge your first month’s premium as your down payment. Since monthly premiums are often $100 or more, you’ll need to be prepared to pay at least that much to activate your policy. However, if you decide to pay your premiums quarterly or annually, your down payment may be higher.
Since it’s standard for insurance companies to require at least a month’s premium as your down payment, reputable $20 down or no deposit car insurance really doesn’t exist. Instead, you may be able to lower your car insurance costs to save on your down payment.
Some companies advertise low down payment car insurance, but since your down payment depends on your monthly premium, low down payment car insurance is really just a cheaper car insurance policy. You can save money on car insurance – and lower your deductible at the same time – in several ways.
To start, focus on making yourself an appealing customer for insurance companies. Drive safely and avoid risky behaviors like speeding, which could cause a car accident or lead to a traffic violation. Some car insurance companies also consider your credit score in determining whether you’re a risky driver. Drivers with low credit scores are seen as being riskier to insure, while working to build up a high credit score can prompt an insurance company to see you as a more trustworthy driver.
Consider changing your coverage to save money, too. Depending on your vehicle and the amount of risk you’re comfortable with, you might want to lower your coverage amounts or discontinue optional coverage, like comprehensive insurance. Increasing your deductible can lower your premiums, but make sure that you’re prepared to pay your deductible if you ever have to file a claim. You can also call your insurance company to see if you qualify for additional discounts to lower your rates and your down payment.
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To make sure that you’re getting the best deal on your car insurance, compare quotes from multiple companies. You can get free, personalized car insurance quotes online today to start shopping for the best car insurance policy for your needs.
Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.
