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Finding "Zero Down Payment" Auto Insurance

If you're shopping for a new car, "no-down" auto insurance, which is widely promoted online, can be attractive. After all, your budget can be stretched to the limit, and making a large car insurance payment on top of that can seem almost impossible.

Unfortunately, the term "no prepaid" is a misnomer. Any major insurance company will ask you to pay some money up front before you can cover it, whether the insurance company requires it for a down payment, down payment, or anything else. However, you may be able to find car insurance with a relatively low upfront cost. Here's how to do it.

What is "zero down payment" auto insurance?

In many cases, websites that advertise auto insurance without a down payment are misleading, or worse. When legitimate sites refer to car insurance without a down payment, they are often referring to car insurance that requires no more money up front than the first monthly payment on your policy, which can vary from one insurance company to another. and from one state to another. This is the definition we will use here.

The Pros and Cons of "Zero Down Payment" Auto Insurance

Auto insurance policies are generally sold for a period of six months or a year, with the option to renew them later. Generally, you will have the option of paying the entire premium at one time or as a series of monthly installments. When you create a first month payment only policy, you will reduce your initial out-of-pocket costs. However, many insurance companies charge fees for monthly payments or offer discounts for balloon payments, so it is generally cheaper in the long run to pay the bill in full up front. Of course, not everyone can do that.

Where to find "no down payment" car insurance

To find a policy with a minimum down payment, you will need to buy. You can get quotes directly from insurance companies or through comparison sites that include a variety of insurance companies. But before you buy any policy, make sure you are dealing with a reputable company.

Here are five ways to verify insurance companies:

  1. Go to the main credit rating agencies. A.M. Best and Fitch Ratings, for example, rate insurance companies based on their financial health. Knowing that your business is financially sound gives you some assurance that you will be able to pay if you have to file a claim. This may be more important with insurance that you plan to keep for many years before you are more likely to need it, such as life insurance or a long-term care policy, but it is still a useful indicator of the type of business with the you are trying.
  2. Check with the Better Business Bureau. Our Business & Charities Finder can help you locate auto insurance companies serving your area. It also ranks companies and lists complaints registered about them.
  3. Visit the National Association of Insurance Commissioners (NAIC). Their Consumer Information Finder tool allows you to search for a specific insurance company, see if they are licensed to do business in your state, and view registered NAIC complaints.
  4. Explore government insurance departments. Some of them post consumer complaint data on their websites. Also, if you are having trouble finding coverage due to a poor driving record, the state insurance department may be able to help. Several states have special insurance programs for people who are considered high-risk drivers who cannot obtain insurance.
  5. 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 insurance company. They can recommend reliable companies and help you compare the store. The independent agent should also know the insurance rules in your state, including the types of coverage you will need and the minimum amounts required.

How to save on "no down payment" car insurance

If your goal is to start with your first month's payment, you can lower that payment by following these basic guidelines to lower your car insurance costs.

Be aware of your coverage limits
An auto insurance policy consists of several different types of coverage. While the rules vary from state to state, you will generally be required to assume some measure of property and bodily injury liability in the event you are involved in an accident in which people or property are harmed. States set minimums for the amount of liability coverage they must take on, and you'll save money by buying no more than the minimum. The risk, of course, is that you could have an accident where these levels of coverage are insufficient and you could be involved in a costly lawsuit.

Increase your discounts
Auto policies also include two types of coverage to protect your vehicle: collision, for accidents involving other vehicles, and comprehensive, for damage caused by fire, sabotage, and other disasters. If you own your vehicle clearly and clearly, these coverages are usually optional, but if you are still paying for the car loan or rental, they may be necessary. One way to lower the cost is to agree to a higher deductible - the amount you must pay out of pocket after an accident. According to the Insurance Information Institute, for example, increasing collisions and all-inclusive deductions from $ 200 to $ 500 can lower your cost by 15% to 30%, while choosing a $ 1,000 deductible can save 40% or plus. Of course, you risk having that excess cash on hand if you have an accident.

Bundle your insurance with a provider
If you already have a homeowners insurance policy or other insurance policy, ask your insurance company if they offer discounted rates for people who also buy their car insurance there. You may still be able to get a better price by shopping, but this is one way to save a little money without putting in a lot of effort.

Ask for discounts
Many auto insurance companies offer a long list of discounts to potential customers, which generally reflect reduced risk. If your car has anti-theft devices, for example, you may qualify for a break. The same if you've taken a defensive driving course, been accident-free for three years or more, or you don't plan on putting a lot of miles on the car. The better your credit history, the more likely your auto insurance rates will go down, and the more likely you are to qualify for "no down payment" auto insurance in the first place.