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05 Jul 2018
Adam Bate

No deposit car insurance

No deposit car insurance doesn’t really exist, but there are other ways to save money on your policy.

Car with tinted windows

Let’s nip this in the bud immediately – there’s no such thing as 'no deposit car insurance'.

That’s right. Despite what you may read – or what companies try to tell you – you can’t get a car insurance policy that requires no deposit.

Why is there no such thing?

For something to be 'no deposit', you have to be able to buy it without paying any money upfront, either whole or in part.

All car insurance policies require some kind of initial payment before your cover can start, so there’s no way they could be considered to have no deposit.

Even if you pay by direct debit, the first payment isn't a deposit - it's just the first payment.

What other ways can I pay for my car insurance?

Insurers will usually offer you different ways to pay for your policy - typically as a one-off payment, or spread out over 12 months.

The one-off payment is usually cheaper overall than paying monthly, but it means you’ve got a sizable chunk of money leaving your bank all at once.

Monthly payments can be set up by direct debit to help spread the cost over the year, but this usually works out to be more expensive in the long run.

If you decide to pay by credit card, there’s often a small admin fee that’s added to the total cost.

Is the first payment higher than the rest?

Red toy car stacked on pound coins

If you choose to pay monthly, some insurers may spread the cost evenly over the 12-month period.

However, companies tend to make the first payment slightly more expensive than the rest. This will vary between insurers, but expect your first installment to be higher than the rest during the policy term.

Your insurer should explain to you how the cost will be spread across the year. If not, be sure to get a breakdown of payments so you won’t get any nasty surprises later on.

My car insurance costs are still too high – is there anything else I can do?

If you’re finding that even those monthly payments are a bit of a stretch, there are a few things you can do to help lower your car insurance costs without compromising on the level of cover you get:

Check your mileage

Work out as accurately as you can how many miles you’ll do during the policy term. If you wildly overestimate this figure, your prices might be higher than they need to be.

Upgrade your security

It stands to reason that the more secure your car is, the lower the risk of it getting stolen. Fit a tracker to your car, or keep it locked in a garage at night to help lower your costs.

Consider a black box policy

black-box monitors your driving performance and lets you know how good a driver you are. Some insurers offer discounts for good drivers who take these policies.


First published 8 July 2015

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