Jessica Sautter has a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around auto insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Reviewed by Natasha McLachlan
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UPDATED: Nov 4, 2016

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Some people ask whether or not there is a down payment when you sign up for car insurance. It’s important when understanding this concept that you don’t confuse it with the idea of handing over a down payment to buy a car. That’s different, as it can be set at a different amount depending on what you’re willing to do.

With a car insurance down payment, you’re also able to pay more all at once, yet you’re required to pay a certain amount upfront. This is typical of every insurance policy you take out with any company.

Related: Is this possible to get car insurance without a down payment?

What’s usually going to happen is you’re at least required to pay your first month’s premium or 20% on six month policy. After doing that, you can print out your insurance documents and your coverage has begun. So yes, the answer to that question is there is a down payment required when signing up for car insurance. That’s often the terminology used, too, yet it’s kind of odd, isn’t it?

Why don’t they just say you have to pay your first month’s premium?

Lady Driving Vintage Car

When you rent an apartment, the landlord often requires the first month’s rent and a deposit. It would be weird if the landlord said that you need to pay a down payment and your deposit. You the idea, but at the same time, it’s still a down payment, and the amount you pay can certainly fluctuate.

For starters, you can end up owing more if there were any errors in your application. You can get different car insurance quotes from multiple companies at the beginning to see what your down payment will be. Plus, you can choose to put more down by paying more than just your first month. If you do, your policy amount will be lowered overall, meaning you get a discount for paying for more coverage all at once.

What you need to know from all of this first is that you have to have money to get insurance. You can’t sign up and then pay later, so in essence, money down is required. You also know your options about paying for more at once to get a discount. Remember too that not every company is going to be the same with how it handles payments, so it’s not just the amount to concern yourself with. Just be prepared to make a down payment for auto insurance when you’re going to take out a new policy.