Can you get car insurance without paying a deposit?

Yes, it IS possible to get no deposit car insurance; and even if you can't, low deposit schemes are available. Click the button above to compare quotes. Granted, no insurance company is going to issue you with a NEW policy without at least some money in advance. If they did, they would take a huge risk; you could have an accident the day after you bought the policy which could mean they would have to pay out a substantial sum before they'd even received a penny from you.

However, what about your existing insurer?

You may have received a renewal notice but decided to shop around on price comparison sites to see if you can save money by finding cheaper quotes. You will probably find though that the lowest priced policies come from insurance companies that do not accept monthly repayments, or ask for very substantial part payments in advance. This may mean that although there are cheaper policies available, you cannot buy one because you prefer not to pay for them a year in advance.

However; provided that you have not had too many claims or driving convictions during the policy period your current insurer will want to keep your business. Have you thought of ringing their customer services department, and telling them that you are looking for a pay – monthly plan? They may well agree to accept regular repayments in future, without asking for a substantial pre-payment; or perhaps even anything at all.

Another way which is often recommended is to get a no–interest credit card and use that to pay the full premium upfront. Some of these offer up to 18 months of free credit. This can be a very cost effective way of buying your policy since you will be free to select the best one to suit your needs, without having to worry about whether or not the insurer offers extended repayments. Remember though:

• you will need to meet all the necessary repayments on the credit card. Failing to do so could trigger penalty charges.
• be careful about applying for one if you have a poor credit record. If you are turned down this could affect your credit rating, and could actually make a monthly paid policy even more expensive.

Can you get low, rather than no, deposit cover?

Certainly. If you click the "click here to compare quotes" link at the top of the page you will be able to compare prices from up to 100 different insurers which offer monthly payment terms. Deposits will range from 1/12 of the total premium upwards. We have not found any insurers that will offer less than this; 1/12 is the lowest advance payment you can expect to find.

Monthly car insurance - the benefits and disadvantages

Most of us have to live within a very tight budget and it can often help us manage our money if we have fixed monthly outgoings, rather than a succession of large lump sums to pay out. This is why spreading car insurance premiums over a longer period can be very attractive for many hard pressed motorists; particularly young drivers who usually face very high premiums.

Does a monthly paid car insurance policy offer the same benefits?

Whether you pay your premium in advance or spread payments over a full year should make no difference to the benefits you receive. The policy will be exactly the same; the only difference will be the way in which you pay for it.

Is it cheaper to pay for car insurance yearly?

Usually, yes. Whilst paying for your policy with 12 monthly payments may help your budgeting, there will be management and possibly interest charges added to your premium at the outset. Your own credit record may affect how much these charges will add up to; a 'ball park' figure for the average motorist was around 11% in 2018. This is not the only additional expense though. By only considering offers that include small advance payments you may miss out on much cheaper premiums, offered by companies that will require larger sums upfront. This means that paying for cover over a fixed term could cost you substantially more than if you settled the bill in full, at the start of the policy; particularly if you have no credit record, or a poor one.

Can I cancel a pay-by-the-month policy?

You are entitled to cancel any car insurance policy at any time. Whether or not you would get any of your premium returned is anothe matter. This would be laid down in the policy documentation which must be made available to you before you actually buy cover. There is often a cancellation charge of about £25 but some cheaper insurers can charge considerably more - so make sure you read that documentation!

If you make a claim before you cancel, the insurer will probably insist on payment of the full premium - again this will be spelt out in the policy docs.

Can you get monthly car insurance without a credit check?

This is very unlikely. If you apply for a regular payment policy you will, in effect, be applying for a loan and so a credit check will be carried out by the insurer before a premium is confirmed.

Can you get 'no interest' month-to-month policies?

We've seen zero interest policies from time to time. The best way to find these may well be to do a price comparison and look at the offers. However, the premiums may still provide poor value when compared to others which do make an extra charge. You should always bear in mind, too, that when the policy comes up for renewal the special offer will no longer apply and you could find your expenses increasing substantially.

How to get cheaper car insurance quotes

Ask for a premium reduction

It is no secret is that many insurers charge higher premiums to existing customers than to new ones. Often they will lower their premiums substantially to attract new business. Many customer service staff have substantial leeway in negotiating premiums; if you explain to them that you need to save money by cutting the cost of your car insurance you have a good chance that they will strike a deal with you and offer a price reduction.

Save money by reducing optional extras

Whilst you are on the phone to your insurer, think: do you really need a courtesy car, legal representation in the event of an accident, breakdown cover? Many of these are bundled with new policies but they do not come for free; often a substantial reduction in premium can be won if they are taken off your policy. If you really need these extras, there are companies advertising them online at prices well below those that insurers and brokers charge.

Compare the comparers - use several price comparison sites

The standard method of lowering your car insurance premiums, recommended by nearly all cheap car insurance sites, is to shop around using a price comparison site. This is usually good advice but we would go further and suggest that you compare prices on multiple sites. Why?

Every one of these websites receives a commission, either for policy sales or just enquiries, and how much they get varies from one insurer to another. Ultimately you pay this commission as part of your total premium. Since some companies will negotiate a higher commission than others it is not surprising that you can sometimes find exactly the same policies, issued by exactly the same insurers, at different prices, depending upon which site you compared them on.

Also, most of these sites will only show prices from companies that pay them a commission. There may well be other policies available which are cheaper or more suited to your needs but these will not appear in their search results.

All the popular comparison sites have different panels of insurers, so you will have the best chance of finding the cheapest possible quotations by getting prices from several of them. Also, most of them are connected, financially, to insurers themselves, and may therefore offer their products at a really good price. It should only take 5 minutes or so to get quotes on each site, and it could save you a great deal of money.

Booking a policy 30 days ahead may save you £££s

Insurance companies like to deal with motorists who are properly organised. Their records tell them that drivers who decide on their policies well in advance of their renewal date are less likely to make claims. This is why, if you commit to insuring a car with a new company a month before you need to, you could get a much cheaper deal. The savings could be quite substantial, possibly running into hundreds of pounds for young drivers in particular.

Buying a Telematic policy may be the cheapest option

Telematic (blackbox) systems are now very popular because they enable insurers to tailor a premium more closely to individual drivers, rather than using the usual statistical approach, which can mean that safe drivers can be penalised with higher premiums just because they belong in an age range, have an occupation, or live in a postcode which normally contains a high proportion of high risk motorists.

They not only encourage motorists to drive more carefully, but also they detect when the vehicles they are fitted in are driven during the more dangerous hours when accidents are more likely to occur; these are in the evenings and at weekends.

Advantages of Telematic Systems

• If you are safe and careful driver this fact will go down on record and can lead to lower premiums in the future.
• The fact that motorists are being monitored constantly can encourage them to take more care on the road, and be more aware of potential accident situations. This can not only help reduce accidents, and subsequent losses of no claims bonuses and increased premiums, but also keep those drivers, their passengers and other members of the public a lot safer.

Disadvantages of Telematic Systems

• A motorist who drives inconsiderately, at a speed in excess of the legal limit, and who accelerates too hard or brakes too fiercely can quickly find premiums rising substantially; or even have cover withdrawn completely. These could have extremely adverse effects on future premiums.
• The Telematic boxes have to be fitted into the driver's car. Not only does this cost money, for both the blackbox itself and the labour involved, but it can be inconvenient waiting in for the fitter to install it. The cost of all this is of course loaded onto the first year's premium, which otherwise may have been considerably lower. A recent estimate of the cost of supplying and fitting one of these systems was approximately £200; a charge which ultimately is met by the customer.
• If the motorists who owns the car lends it to a friend, any bad driving that that friend is guilty of will go on the owners' record, possibly risking severe consequences.
• Having a tracker in the car like this can make it more difficult to shop around and perhaps switch to the cheaper insurer, since not only will the original device have to be disconnected and taken away, but also a new one will be fitted, with all the subsequent costs.

No deposit, month by month car insurance - a recap

So yes, buying car insurance with paying a deposit in advance is possible, but if you don't qualify then getting a low one is much easier. By comparing quotes via our site you may not only get a policy with the minimum possible sum payable up-front, but also save a lot of money by finding much cheaper quotations.