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: Oct 1, 2020

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Down Payment and Car Insurance

Most of the states in the U.S. require drivers to have automobile insurance to drive a vehicle. For you to legally register a vehicle, you must first show proof of insurance. To renew the registration, you would be required to show evidence of insurance then as well. When it comes to purchasing insurance, it is best to call around to see which company is offering the best quotes. When you are calling around, you may come across companies who are offering car insurance with no down payment. Before you choose a policy, you should understand the pros and the cons of this type of insurance.

Things You Would Enjoy:

There are a few benefits of purchasing this kind of automobile policy. These include:

The cheapest way to get your car on the road: When you buy a policy that requires no down payment, it will cost you less money to get your car on the road. When you purchase a vehicle either you need to pay for the car outright, or you need to put down your down payment. You also need to pay the registration fee and the sales tax. When you don’t need to put a down payment on your insurance, it will make the total cost of purchasing the vehicle and getting it on the road less expensive.

Exact quotes: When you buy a no down payment insurance policy, you will be paying the exact amount that you were quoted. When you purchase a policy that requires a down payment, you will end up paying the quote, plus the down payment.

Less confusion: When you buy an automobile policy that does not require you to pay a down payment, there is less confusion. You would pay your premium each month. When the premium is paid, you would be free and clear until the next payment is due. You would not need to worry about how and when to make additional payments.

Changing companies: If you have been with the same insurance provider for several months but found a company who has lower rates, you would need to make another down payment when you start with the new provider. When you purchase a policy that does not require a down payment, you wouldn’t need to worry about paying another down payment when you begin your new policy.

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Things You Might Suffer:

While there are benefits of purchasing a no down payment car insurance coverage, there are a couple of downfalls. These includes:

Reduced insurance: There is an old saying, that says you get what you pay for. This is true with this type of plan. You could end up buying a policy with very limited coverage, so if something happens, you could find yourself paying out of your pocket.

Hidden costs: Many companies who offer no down payment car insurance policies don’t mention the hidden fees attached to the policy. This could end up costing you more than the actual down payment would.

Rate raise clause: Many companies who offer policies with no down payments include a hidden clause stating that they can change your rates at any time. These raises in rates can end up costing your more than the down payment would have cost.

If you are considering a no down payment car insurance policy, you should first weight the pros and cons to determine what is best for your individual situation. If it is worth it, then buy it.