If you’re struggling to cover the cost of your car insurance, you might hope to find a ‘no deposit car insurance deal’ — but why are they so hard to come by?
Car insurance premiums can often be expensive, and if you’re expected to pay a large deposit up front, it can sometimes put a massive strain on your finances, limiting you from making other important purchases. But what if you could get car insurance with no deposit? Does no deposit car insurance even exist? We explain all and include some tips on how to save money on your car insurance in this guide.
There are many ways to save money on your car insurance policy. And why wouldn’t you? Car insurance premiums can be extremely expensive, especially if you are a new or young driver. Annual premiums can set you back a few hundred pounds at the lowest end of the scale, but can cost a few thousand pounds at the other end. The prices vary wildly depending on your age, driving experience, where you live and where you park your car, the type of car you drive, and a whole host of other factors – many of which you simply can’t control.
So if you are unfortunate enough to be required to pay a lot of money on your car insurance premiums, it would surely be easier if you could just spread the cost evenly instead of paying a lump sum upfront. This would be what is called ‘no deposit car insurance’, but does it even exist?
No deposit car insurance explained
No deposit car insurance is a term that might be used by some to advertise car insurance where you don’t need to pay upfront. However, strictly speaking, there is no such thing as no deposit car insurance.
Unfortunately, with all car insurance premiums you are expected to pay money upfront. The amount you pay upfront could vary depending on your circumstances and the car insurance provider you decide to sign up with, but essentially no deposit car insurance does not exist. All car insurance providers need to take some payment before they can provide you and your vehicle with any type of cover.
Usually you can pay all of your premium in one go or pay it off over the whole year. Paying your premium off in one go usually works out cheaper, but it does mean that you will have to find a large chunk of cash to cover your insurance, which is why many people still prefer to spread their car insurance premium payments, despite the extra cost.
However, at the cost of an extra charge on your car insurance premiums, you might be able to arrange to pay your car insurance over a 12-month period. Many car insurance providers will require you to pay roughly 20% of the total annual insurance premium upfront and then pay the rest in equal instalments for the rest of the year. But there are some car insurance providers attempting to cater to the demands of those who want to pay off their annual car insurance in equal 12-month instalments.
These car insurance deals are the closest you might get to a ‘no deposit car insurance’ deal, but they are not all that common, and besides, you still have to make the first payment before any cover kicks in.
Paying off your annual car insurance premium in instalments is similar to a credit deal, so you will most likely have to pay extra to do so. Similarly, there is an extra charge if you decide you want to pay off your car insurance using a credit card – in fact this would probably come with a relatively small extra admin fee on top of the fee required if you want to pay it in instalments.
Be sure to get a break down of all the costs when buying your chosen car insurance. As mentioned previously, it is likely that your first payment will be higher than the rest of the payments you make if you choose to pay in instalments, so make sure you have enough money set aside to cover that. If the costs are still too high, then consider your other options first.
Getting cheaper car insurance without a deposit
If you are looking for no deposit car insurance, chances are you are already finding it difficult to find the right cover for you and your car at the right price. You won’t be able to avoid paying some costs upfront, but there are some things you can do to potentially reduce the cost of the quotes you get given by car insurance companies. Take a look at our top 10 tips on cutting the cost of your car insurance.
You might just be looking to spread the cost of your car insurance over 12 months, rather than looking for no deposit car insurance, which just doesn’t exist. Either way, shopping around and following some of our useful tips can help you save money on your car insurance premiums.
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