No deposit is a term that insurance companies generally use to divide your premium’s cost into monthly installments. The companies use it to promote their policies while providing the ease to pay your whole worth of insurance in monthly installments. They do this by charging a good amount of money on the first month of installment, so there’s no such term as ‘No Deposit’ because they’ll recover some of it in the first month already.
What is No Deposit Car Insurance?
While buying insurance, you need to pay a definite amount of upfront deposit to get insured. But with no deposit insurance, you can easily split the amount into installments depending upon your choices. This is known as no deposit insurance. Technically, there is no deposit insurance because companies’ first installment will be heavy and considered a deposit.
How does it work?
Instant car insurance with no deposit can prove expensive sometimes, even if you have selected to split the payment. The first installments can be about 20% – 30% of the total premium. This works as a deposit for the companies. You’ll think that there’s no extra deposit you have to pay, but they have already got it in the first installment. So if you can pay it in one go, it’ll be easy for you without extra charges.
Car Insurance Quote
There’s no such thing as very cheap car insurance no deposit. Major companies do not charge for an insurance quote, so if a company charges you for a quote, it probably provides you a false deal or is some advertisement. Car insurance quotes are free.
Why and who could buy it?
Well, insurance car no deposit is just a myth. It is good for people who don’t have sufficient money at the signup time, but after they buy it, they end up paying even more.Even after realizing that they’ll be charged more, they still consider them to work out in their favor. However,the eligibility of auto insurance with no money down depends on few factors:
- Location: The amount of premium widely depends upon the type of location you live in because factors such as crime rate, accidents, theft, etc., are connected to it.
- Car: Buying sports or luxury cars will cost you even more. Premium is directly proportional to the type of your car. Big brands and expensive cars are more likely to cost more to the companies.
- History: Both your credit history and driving history are checked to determine the behavior of the person. Clean records are a lesser risk for insurance companies. Also, the better your credit score, the less premium you have to pay.
So the term “cheap car insurance no deposit” is just a myth; it’ll eventually cost more in the long run. But for people who don’t have an amount at the time of signup, it can be considered good. However, always look for proper coverage of your car that can provide safety in your needs.