Get Affordable Car Insurance with No Down Payment

June 12, 2013

Can you get affordable auto insurance in the most unlikely circumstances--with no down payment or with bad credit? Find out cheap auto insurance works.

No Down Payment

Several insurance companies offer affordable car insurance with no down payment. Some companies even use the first month payment as the down payment, making it seem like you are paying 0 down. With the cost of everyday necessities increasing, people are looking for every opportunity to get the best for as little as possible, auto insurance included.

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States Which Offer No Down Payment Car Insurance
Not every states offers no down payment car insurance. Some that do are New York, Arizona, Florida, California, Washington State, Georgia and Oklahoma, to name a few. California takes the lead for having the most companies that offer no down payment insurance.

Companies That Offer No Down Payment Car Insurance
A few companies that offer no down payment policies are Geico, Safe Auto, State Farm, Kemper, Progressive, Allstate and Cheap GA Auto Insurance. Several of these companies are nationwide, and you can go online to purchase no down payment insurance. The main ingredient that enables you to get this discount is good credit. If you qualify, you can find all these companies online and the process is simple and fast. By just filling in the information accurately, the process goes smoothly.

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No Down Payment Options
Auto insurance companies offer 2 options for paying your policy, a 1-time payment for 3-months, 6-months, 12-months or even 18-months, or you can make monthly payments. There are money saving benefits to making the 1-time payment, because you avoid the processing fees, which are usually $10.00 per month. The benefit to making monthly payments is that you do not have to come up with a large amount all at once. The no down payment option is mainly for middle-income families who simply cannot afford the down payment.

Help for Middle Class Families
There are times when you just do not have the extra cash to spare, but still have to have car insurance to get to work, doctor appointments, school, etc. That is when no down payment car insurance comes in.

Having car insurance is as important as having a driver's license, and essential to being able to drive on America's roads. Not only does it protect you, it also protects your passengers and people in the other cars. Without car insurance, you cannot legally drive on public roads and the penalties for doing so are not worth the risk. Car insurance, like a driver's license, proves that not only are you competent enough to drive a car, but also that your car is protected in case of an accident. With the advent of no down payment policies, drivers are better able to afford what they need.

What Most Affordable Car Insurance Policies Cover
Most affordable car insurance policies cover the basic legal minimum required for your state. Policies differ between companies, who are constantly vying for your business, but essentially you get coverage which fulfills your legal obligations as a driver.

Coverage Basics
Liability and property damage are usually the main requirements for car insurance coverage, along with bodily harm caused to one or more persons in an accident. In states where uninsured motorist coverage is required, the basic minimum will cover that too, at an affordable price.

Levels of Coverage
Some cheap car insurance policies offer better coverage for the money, but you need to search around and do research to find those. Insurance is never going to be exceptionally cheap, and if you find a company that offers a very low price, be sure to check out their rating and reputation before you buy a policy from them.

What Affordable Car Insurance Covers
That all depends on your pocket. Low income families will struggle to pay for the basic state minimum if they have very little expendable income, and those who are better off will be able to pay for more. It is all relative to what each consumer considers as affordable, and that will differ between households. The minimum will cover repairs in the event of an accident, but only to the party deemed non-responsible.

If you only have liability coverage and you cause an accident, your own repairs are not paid for. If you did not cause the accident, the other party must pay for your repairs. It will also cover medical expenses for those injured in the accident, and any other property which was damaged as a result.

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How to Get Affordable Auto Insurance with Bad Credit

You can find companies that offer auto insurance with no credit check or that specialize in bad credit car insurance. This is much easier than getting a car loan with bad credit, as your credit history is not the main factor that goes into determining your insurance premiums. Your driving history, type of car, and location also play important roles. Your insurance company must tell you that they will access your credit information, and in many cases must ask your permission first.

Check with Your Employer
Many companies offer discounted automobile insurance for their employees, by getting a group rate from the insurance carrier. This can save you a great deal of money. If your company doesn't offer this type of automobile insurance, suggest it so that you can enjoy the savings of a group rate on your automobile insurance.

Check the Legal Minimum
Each state has its own legal minimum car insurance you must have. This tends to be the least expensive insurance, but only covers liability for third parties. Rates for this type of insurance are low, because there is little chance you have to make a claim, so the insurance company does not pay out money often.

Compare Different Companies
The auto insurance industry is very competitive, so you should compare different policies from several different companies. Look into large national companies as well as your smaller local companies. There are comparison websites online that can easily compare different companies side by side, so you can see which gives you the best deal.

Where Credit Figures in
In the past, your credit history was not as important as it is today when looking for car insurance. Today, almost all companies check your credit history, as they have found that this is a strong indicator of the possibility of your filing a claim. Be aware that this does not apply to the state of California, where this is illegal. Companies use credit based insurance scores, which are different from the scores on your credit report. If you have good credit, you generally pay less in premiums.

Ask about Discounts
Companies provide discounts on insurance rates, but you need to ask about them. Many times, if you get an insurance package such as home insurance, car insurance, and life insurance from the same company, you get a reduced price. If you only drive your car sparingly, you may be eligible for a low mileage discount. If you have a students on your policy, they can receive reduced rates for getting good grades. Make sure you ask about all possible discounts.

Work to Improve Credit
As you work towards improving your credit, you should see about getting your policy updated, or changing your policy, as you should get better rates than before. You are entitled to a credit report free of charge once a year, and you should keep your eye on this. You should see changes in your insurance as your score improves.

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Related Questions and Answers

Will they Check My Credit Score When Getting a Low Down Payment Car Insurance Plan?

When getting a low down payment car insurance policy, expect to have your credit rating checked. All of the major insurance companies will pull a credit report before they write an insurance policy. A credit report gives them a feel for how well you pay your bills on time. It helps them assign a risk factor to your policy and set a premium. While there are companies out there that will advertise no credit checks, many of them can be a bit shady. Expect a higher premium and more restrictions on the coverage. Thoroughly check out the company before signing anything.

Do No Money Down Car Insurance Plans Have a Higher Premium?

In most cases, a no money down car insurance policy should not cost extra. If you are dealing with a major insurance company, the premium should be roughly the same regardless of a down payment. Car insurance is a competitive business and insurers are always looking for ways to entice customers to switch insurance companies. One way of doing that is to offer no down payment policies. If on the other hand you are dealing with an insurance company that is not a well known name, it is possible that the premiums will be higher. Many of these types of companies serve customers that have poor credit ratings, and poor credit ratings lead to higher premiums.