Do You Have to Make a Down Payment to Get Car Insurance?

Some level of auto insurance is a requirement to drive a vehicle. For the most part, you pay insurance in advance, which means you'll have to make a down payment on that insurance in advance to secure coverage. How much you pay depends on your insurance carrier's guidelines, as well as the requirements of your particular state. Those with outstanding credit are more likely to avoid a hefty down payment, while others may have to accept larger payments down the road if they elect to pay less up front.

Good Credit Essential

To get car insurance with no down payment, you'll have to have a good credit history -- not just your credit score, but also your payment history. The less money you in advance, the bigger the risk you represent. A history of not paying bills on time, for example, could be a red flag that you'll be more likely to make a claim for minor damage because you can't afford to pay out of pocket.

Payment Plans

The amount you're required to pay depends on how you've structured your payment plan and who your carrier is. If you settle your premium with one check annually, you'll write that when you agree to the terms. Technically speaking, you're not making a down payment when you do that; you're paying the premium in full. Often, you'll get a small discount for doing so, since you'll avoid the processing fees or installment charges that some carriers tack onto each payment. When you renew at the end of the policy period, you'll be asked to write another check before the expiration date to keep your coverage in effect.

Monthly Plans

If you elect to pay on a monthly basis, you'll generally have to put down more than one month's worth of premiums in advance to secure coverage. Progressive, for example, generally requires a down payment representing </ahref="http:>two months of payments. Esurance has new policyholders pay for two or three months in advance, depending on state regulations and the wording of your individual policy. Direct General bases your monthly payments on how much you provide as a down payment: The more you hand over initially, the lower your monthly costs thereafter.

Negotiate the Best Rate

Insurance agencies use their own proprietary methodologies to determine rates and coverage amounts. Different companies can come up with very different quotes for the same customer, so shop around for the deal that works best for you. If a small initial payment is a priority, insurance agencies may be willing to work to meet your needs; just expect higher monthly payments as a result if you're providing less money at the outset.