Skip navigation

No deposit car insurance

No depositWhen it comes to paying for car insurance, with average prices often running into hundreds of pounds, it can be difficult to find the lump sum to pay for a policy outright. 

The good news is that some insurance companies now offer monthly installment options that make it possible to spread the cost across the life of the policy.

In some cases this can enable drivers to afford higher levels of cover as the costs can be squeezed into their monthly budgets. However, it’s worth bearing in mind that opting to pay for insurance in installments may end up costing more in the long-run as insurers may add increases to the total price to cover things like admin fees and interest. 

As well as this, some insurers may also ask for a larger payment upfront to begin the policy that can sometimes be as much as 20% of the policy value.

All things being equal

While all monthly policies do actually involve some form of payment, there are some insurers that offer monthly policies known as no deposit policies that avoid an up-front lump sum payment that is larger than the remaining monthly payments, and instead equally weight payments throughout the term of the policy.

The benefits of choosing a no deposit policy include:

  • Avoiding large upfront costs
  • Split the cost of your premium equally across the year (or lifetime of the policy)
  • Get immediate cover with only the first month's installment to pay

This type of policy isn't usually offered by all insurers but if you do choose one, remember it's still possible to tailor the level of cover, excess and other features associated with any other car insurance policy and you should consider all aspects of the policy (overall price, level of cover, excess etc.) before making a decision.

Finding the best deals

As always the usual rules apply: shop around for the best deals and always double check the terms of the agreement. In some cases, for example, it can work out cheaper to pay the entire premium up front, so clarify how much each route would cost and then see how much you can afford to pay out in one go. 

Make sure there are no hidden surprises such as fees to pay which were not made clear at the outset. Take your time, consider all the documentation and ask questions if you don’t understand. Insurance is not always straightforward so caution pays.

Other ways to cut the cost

The chances are that if you are looking to spread your payments out over a longer period then you haven’t got money to burn and would be interested in looking at other ways to reduce the overall costs involved. 

So what should you consider? Firstly you can limit your annual mileage allowance by only agreeing to travel a certain amount over the coming year. You may also be able to trim back the costs by declining extras such as the use of a courtesy cars should you have a crash. Third-party insurance may also reduce your premium if you are willing to cover the cost of your own vehicle should you be involved in an accident.

Finally, making your car as secure as possible makes sense. Find out the manufacturers your insurance company approves and then consider buying tracking devices, wheel locks or immobilisers. Anything, in fact, that might deter potential thieves.

For a more in-depth look at how you can save money on your insurance, take a look at our guide - driving down the cost of car insurance or click the quote button below to start a quote.
Get a car quote

Find out more about car insurance