Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Apr 20, 2020

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Things to Remember...

  • If the person receiving a quote has been insured by any insurance company for at least three years they will have the best chance of paying a low down payment
  • Most states require policyholders to put down around 25 percent of the total amount of their auto insurance policy at the time the policy is purchased
  • Paying the entire premium up front can save the policyholder as much as 40 percent

Buying a new or used car can be expensive, and most people don’t consider the cost of auto insurance when they are deciding how large of a car payment they can afford.

There are many different auto insurance companies that offer auto insurance at low rates, but finding a company that will take a low down payment can be difficult. Let us do the comparison for you!

Entering your zip code will allow us to compare car insurance and find ways you can save on your auto insurance!

How Auto Insurance Down Payments Are Determined

There are many factors that factor in when an insurance company is determining how much each policyholder should pay upfront for their auto insurance policy.

Some of these factors include:

  • Policyholder’s insurance history
  • Policyholder’s credit
  • Value of the vehicle
  • Whether the vehicle is financed or owned
  • Insured’s driving history

If the person receiving an auto insurance quote has been insured by any insurance company for at least three years they will have the best chance of paying a low down payment for their new policy because they are considered to be low risk.

People with good credit are also considered to be low-risk, even if their driving record is not perfect.

People with perfect driving records are often quoted lower premium rates than people who have recently been involved in an accident or gotten tickets, but the down payment amount for a new insurance policy is usually affected more by a person’s credit rating than their driving record from the DMV.

The fair market value of a vehicle is what most insurance companies use to determine how much each vehicle is worth. New vehicles and cars that are worth at least $20,000 almost always cost more to insure than vehicles that cost less money to replace.

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State Requirements for Auto Insurance Down Payments

Most states require policyholders to put down around 25 percent of the total amount of their auto insurance policy at the time the policy is purchased. Each state has their own laws regarding auto insurance and the amount of coverage that is required.

Insurance agents should make sure that the auto policy you purchase meets the minimum auto insurance coverage requirements for coverage in the state you reside, and most of them will encourage you to purchase more than the minimum amount of coverage.

Insurance for Financed Vehicles

Almost every company that offers auto loans requires that the borrower maintain full coverage insurance for the vehicle for the life of the loan.

Full coverage auto insurance often requires a larger down payment than liability auto insurance and also carries higher premiums. Loan companies require this coverage to protect their own interests in the event that the vehicle is damaged before the loan is paid off.

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How to Get an Auto Insurance Policy with a Low Down Payment

There are many different companies that offer auto insurance for a down payment of as little as 10 percent of the entire premium amount for the policy. There are also insurance companies that offer six-month terms rather than 12-month terms so that the down payment amount is lessened.

Some companies offer their policyholders several options regarding payment of their auto loan premiums. They may choose to pay the entire premium amount at the beginning of the policy or pay an equal amount each month for the life of the policy.

Paying the entire premium up front can save the policyholder as much as 40 percent compared to paying a portion of the premium amount each month.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

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Payment Plans

Payment plans are common, but some companies also allow their policyholders to make larger payments every two or three months or make a slightly larger payment each month in exchange for having one month at the end of the policy without a payment due.

Auto insurance companies typically charge a fee of five or ten dollars per payment to pay for the payment processing.

Companies will sometimes waive the processing fee if the policyholder agrees to have the entire payment amount automatically debited from their checking account or credit card on the day that each payment is due.

Comparing Companies

There are so many differences between auto insurance companies that it is essential for every policyholder to compare the auto insurance rates, down payments, and terms of policies from several different companies so that they can purchase the lowest-priced policy that meets their individual needs.

Some companies offer lower down payments as well as discounted premiums to people who are members of organizations such as AAA or the United States military.

It is also common for students to be offered lower rates. Once you have narrowed down the number of auto insurance companies you are considering, it is a good idea to ask for a list of every discount each company offers.

The agents will usually be happy to tell you about every available discount and how it will lower your premium rates if you buy the auto insurance policy you have been quoted. Just asking for a list of discounts and qualifying for a few of them can save you hundreds of dollars on your auto insurance each year.

Compare auto insurance quotes online by entering your zip code into our free comparison tool!

References:

  1. http://www.consumerreports.org/cro/car-insurance/credit-scores-affect-auto-insurance-rates/index.htm
  2. http://www.iii.org/article/what-determines-price-my-auto-insurance-policy
  3. http://www.clark.com/do-you-need-full-coverage-or-just-liability-insura
  4. http://www.iwillteachyoutoberich.com/blog/tip-13-negotiate-your-car-insurance/
  5. http://www.iii.org/article/nine-ways-to-lower-your-auto-insurance-costs