$20 Down Payment Car Insurance: Is It Possible?
It’s possible to find low-down-payment car insurance, but generally only the safest, most-qualified drivers will be able to start a policy for around $20.
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Written byBob Phillips
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15+ years in personal finance advising and writing
Holds Chartered Life Underwriter (CLU) designation
Bob has spent 15+ years helping people plan their financial lives. As a freelance writer, he’s covered insurance, mutual funds, stocks and bonds, and more.
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Edited byAshley Cox
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7+ years in content creation and management
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
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Updated November 21, 2024
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Table of contents
Quick Facts
Most car insurance companies require you to pay the first month’s premium up front.
OCHO, a fairly new car insurance agency, may be an option for getting a lower down payment amount. But it’s not available everywhere.
Quote comparison is one of the best ways to save money on your policy.
Can you get car insurance for $20?
Most drivers are unlikely to get car insurance for only $20 down. Any insurance company offering a down payment this cheap may be trying to scam you — most insurers typically charge the first month’s payment to activate your policy.
This first payment is known as a down payment, and the cheaper your premium is, the lower your down payment will be. Only drivers with long histories of safe driving, good credit, and multiple other positive rating factors are likely to qualify for monthly rates in the $20 range.
You may also see no-down-payment car insurance advertised. This is also likely a scam; you should be wary of any insurance companies offering it. Almost every auto insurance company requires some money down with an application, typically a low down payment of the first month’s premium or whichever payment method you select.
If you live in Arizona, Illinois, Missouri, New Mexico, Texas, Washington, or Wisconsin, you may be able to find a lower down payment through OCHO. The agency works with multiple auto insurers and helps drivers cover down payment costs with zero-interest loans. Policyholders repay the loans, plus an $80 broker fee, in small increments every two weeks as part of their regular premium payment.
Important Information
Insurance agents will sometimes refer to a down payment for car insurance as a binder. This means the insurance company is bound to cover you if it accepts your down payment and approves your application for coverage.[1]
How car insurance down payments work
Almost every insurer requires a car insurance down payment, sometimes called a deposit or a binder. It’s the amount you need to pay to activate your coverage. The amount of your down payment depends on the term you select (monthly, quarterly, semi-annually). For example, if your monthly premium is $100, your down payment will be $100.
Insurers require a down payment to protect themselves financially.
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What is no-down-payment car insurance?
No-down-payment car insurance doesn’t really exist, and you should steer clear of insurers offering it. Some may try to rephrase “down payment” as “deposit” and claim that it’s only an application fee, but it’s effectively the same thing as a down payment. Put simply, you won’t get reputable insurance without putting at least a little money down.
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Read More: How Car Insurance Works: Everything You Need to Know
How to lower your down payment
The best way to get a low deposit is to find cheap car insurance so that your initial payment will be as low as possible. Fortunately, you have many ways to do this.
1. Maintain a good driving record
Many factors affect car insurance premiums, and your driving history is one of the most important. Insurance companies charge more for high-risk drivers with infractions like speeding tickets, reckless driving, at-fault accidents, and DUIs. These violations can increase the likelihood of a driver filing a claim.
Insurers often reward good drivers with discounts. So practicing safe driving habits and remaining claims-free can help lower your car insurance premium.
The following table illustrates the effects moving violations can have on minimum-coverage car insurance rates from some top companies:
The below rates are estimated rates current as of: Friday, November 1 at 12:00 PM PDT.
Insurance Company ▲▼ | Clean Record ▲▼ | Speeding Ticket ▲▼ | At-Fault Accident ▲▼ | DUI ▲▼ |
|---|---|---|---|---|
| COUNTRY Financial | $16 | $20 | $22 | $26 |
| NJM | $29 | $42 | $45 | $40 |
| Auto-Owners | $34 | $42 | $44 | $56 |
| USAA | $45 | $54 | $57 | $74 |
| Erie | $50 | $63 | $67 | $82 |
| GEICO | $54 | $65 | $69 | $89 |
| State Farm | $54 | $63 | $68 | $89 |
| Mile Auto | $56 | $68 | $75 | $92 |
| Root | $60 | $83 | $88 | $78 |
| Allstate | $61 | $73 | $78 | $101 |
| Metromile | $63 | $85 | $89 | $104 |
| American Family | $73 | $88 | $93 | $120 |
| Mercury | $82 | $113 | $120 | $115 |
| Safeco | $82 | $101 | $102 | $116 |
| Nationwide | $83 | $101 | $108 | $137 |
| CSAA | $84 | $105 | $115 | $111 |
| National General | $86 | $104 | $109 | $142 |
| Travelers | $89 | $108 | $115 | $147 |
| Dairyland | $91 | $109 | $113 | $150 |
| State Auto | $93 | $130 | $140 | $153 |
| The Hartford | $95 | $140 | $148 | $132 |
| Direct Auto | $97 | $116 | $129 | $160 |
| Progressive | $98 | $115 | $126 | $162 |
| Clearcover | $102 | $124 | $151 | $168 |
| Commonwealth Casualty | $110 | $153 | $134 | $181 |
| Chubb | $110 | $136 | $141 | $181 |
| Farmers | $110 | $130 | $139 | $181 |
| Shelter | $111 | $144 | $154 | $183 |
| The General | $112 | $139 | $148 | $185 |
| 21st Century | $112 | $144 | $150 | $185 |
| Foremost | $117 | $163 | $170 | $193 |
| Bristol West | $118 | $143 | $150 | $195 |
| Elephant | $124 | $173 | $151 | $204 |
| GAINSCO | $125 | $174 | $145 | $206 |
| Amica | $151 | $213 | $226 | $203 |
| Liberty Mutual | $159 | $222 | $230 | $262 |
| AssuranceAmerica | $163 | $194 | $198 | $269 |
| Infinity | $181 | $232 | $220 | $298 |
| Hugo | $227 | $262 | $329 | $374 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
2. Compare car insurance quotes
Just as you would comparison shop for a car, it’s a good idea to compare car insurance quotes. Prices, discounts, and coverages can vary significantly among insurance companies. Comparing quotes from multiple insurers can help you find the best rates for the coverage you need.
You have multiple options for comparing quotes. You can work with an independent agent, use an online quote-comparison tool, or get quotes directly from insurers.
3. Look for discounts
Most insurers — but not all — offer multiple discounts to help drivers save. Check out discounts for good driving, going paperless, bundling your home or renters insurance with an auto policy, getting good grades in high school or college, and more. Ask your insurer about what discounts you may qualify for when you apply for insurance coverage.
4. Consider pay-as-you-go insurance
Traditional car insurance charges you a flat premium that you either pay in installments or in a lump sum at the start of the policy. Pay-as-you-go auto insurance bases your monthly premium on a set base rate plus a per-mile charge, so your monthly payments depend on how many miles you drive.
Pay-as-you-go car insurance can be a money-saver for people who don’t drive much, like remote workers or seniors.
Hugo offers flexible on-demand, short-term car insurance. If you aren’t a frequent driver, its policies may help you save on car insurance costs.
| User Reviews | 4.1 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 7.0 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $227/mo |
4.1
Best choiceBased on 121 verified guest reviews and ratings
How drivers feel about Hugo
Drivers appreciate the excellent prices, flexible payment options, and helpful customer service but dislike the lack of full coverage and difficulty reaching support.
AI-generated from the text of verified reviews collected by Insurify
Best For
Micropayments
No down payments
Fast coverage
How drivers feel about Hugo
Drivers appreciate the excellent prices, flexible payment options, and helpful customer service but dislike the lack of full coverage and difficulty reaching support.
AI-generated from the text of verified reviews collected by Insurify
Best For
Micropayments
No down payments
Fast coverage
Reviews (45)
Javier
November 12, 2024
Verified Purchase
Hugo Insurance is the Best
Hugo was wonderful. We paid for car insurance at a good, low price. It was exactly what we needed to look into. Due to our income, paying for two vehicles for less than $100 is an awesome price. Thank you, Hugo. I recommend others to try it out.
Gabrielle
November 2, 2024
Verified Review
Good
The price is amazing.
Dawn
October 21, 2024
Verified Review
Paying Too Much
It's pretty expensive and they don't really provide much coverage.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
NRNAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
NRA.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
NRWhy we picked this company
Hugo launched in 2021 and is currently the only insurance company offering on-demand car insurance. Drivers can open a Hugo account without paying a down payment up front. Drivers can choose a policy term of three, seven, 14, or 30 days, or six months, and policyholders can pay smaller amounts more frequently instead of all at once. Drivers also receive instant proof of insurance. Hugo currently only offers state-minimum liability coverage in 13 states. J.D. Power and AM Best have not yet evaluated Hugo’s customer satisfaction or financial strength.
Pros
Short-term policies
No up-front down payment required
Flexible, pay-as-you-go insurance
Cons
Only available in 13 states
Doesn’t offer collision or comprehensive coverage
No discounts available
5. Purchase liability-only coverage
Liability-only car insurance — often called “minimum coverage” — is the cheapest type of auto insurance policy you can buy. But it’s not for everyone.
If you have a vehicle lease or loan, the leasing company or lender will require you to buy full coverage, which includes collision and comprehensive coverages. And even if you own your car outright, full coverage is a good idea if you have a newer or high-value vehicle or wouldn’t be able to pay for repairs or to replace it out of pocket.
Cheapest recent rates
Drivers have found policies from Clearcover, Direct Auto, Allstate, and more, for rates as low as $34/mo. through Insurify
*Quotes generated for Insurify users within the last 10 days. Last updated on November 21, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from November 21, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
*Quotes generated for Insurify users within the last 10 days. Last updated on November 21, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from November 21, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
$20 down car insurance FAQs
Finding affordable car insurance can be difficult. Check out the additional information below about $20 down car insurance.
Can you get car insurance for as low as $20?
You probably can’t get a car insurance policy for as little as $20 down or even $20 per month. But if you have a clean driving record and other favorable rating factors, you may be able to find minimum coverage for less than $30 per month.
Is it normal to pay a down payment on car insurance?
Yes. It’s normal to pay a down payment for your car insurance. It’s typically equal to the first month’s premium. Some insurers or agents may refer to it as a “deposit,” but it really means the same thing as a down payment or up-front money. You must pay it for the insurer to issue you coverage.
Why is my car insurance down payment so high?
Your total car insurance premium, the insurance company, and your personal driver profile affect how much your down payment will be.
If you have driving infractions like speeding, are a new driver, have a history of claims, live in a high-risk ZIP code, have a poor credit history, or drive a high-value vehicle, your car insurance premium will be higher. That means your down payment is also likely to be higher, even if your insurer requires only the first month’s premium as a deposit.
Which insurance company doesn’t require a down payment?
Every reputable car insurance company will require some deposit to initiate a policy. Depending on the company and your personal circumstances, you may only have to pay the first month’s premium as a down payment. Some companies may charge a higher down payment if they consider you or your vehicle a higher risk.
Do you need car insurance?
Car insurance is mandatory in every state except New Hampshire.[2] Minimum coverage amounts and coverage types vary by state, but nearly every state requires liability coverage for property damage and bodily injury.
How much car insurance do you need?
You’ll need to carry at least your state’s required minimum liability coverage. Whether you need any additional coverage depends on how you drive. Consider how frequently and how far you drive, who you drive with, and when you drive when selecting your coverages and amounts. If you’re unsure how much you need, talk to an insurance agent.
Methodology
Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
- Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
- Property damage limits between $10,000 and $50,000
- No additional coverage
- Comprehensive coverage with a $1,000 deductible
- Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
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Sources
- International Risk Management Institute. "Binder."
- New Hampshire Insurance Department. "2022 Automobile Insurance Consumer Frequently Asked Questions."
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Bob Phillips
Having spent more than 15 years helping people plan their lives financially, Bob
mastered many different financial products to help people achieve their financial
goals, including life insurance, disability insurance, mutual funds, and stocks and
bonds. He earned the Chartered Life Underwriter (CLU) designation and held
numerous securities licenses. Bob is an internationally published poet and is now
a freelance writer living in North Texas with his wife and Doberman puppy.
7+ years in content creation and management
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
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