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No deposit car insurance

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*Based on data provided by Consumer Intelligence Ltd, www.consumerintelligence.com (February '23). 51% of car insurance customers could save £407.05
**Single annual policy. Shell Go+ account required. Only one £10 fuel reward can be used per transaction and each can only be used on fuel purchases of £10 or over. HelloFresh 18+ subscription service. Geographical exclusions apply. T&Cs apply
1Correct as of March, 2023

What is no deposit car insurance?

Many car insurance companies use the phrase 'no deposit car insurance' to suggest you don't have to pay the whole amount in one go.

But it’s a marketing trick because while you technically don’t pay a ‘deposit’, you still have to make a payment upfront. This is how insurance providers promote their monthly direct debit car insurance deals. You can't get any car insurance policy without having to pay something first.

But all this does is spread the cost over 12 monthly payments. So the first payment you make will be the first payment of your direct debit.

When you compare car insurance quotes with us, we'll show you how the insurer sets its monthly payment schedule. Some insurance companies spread the payments evenly across all 12 months of the policy. But others expect you to make a larger initial payment, often the average is around 14% of the total price.

Is it better to pay annually or pay monthly?

It's up to you if you want to pay annually or monthly for your car insurance, depending on your circumstances. But there are some pros and cons for each.

Paying annually:

  • Once you've paid, that's it, you won't have to make monthly payments.
  • It's often cheaper as most insurers charge interest or an admin fee if you pay monthly, which could cost you over 15% extra**.
  • If you cancel your car insurance policy, it might take time for your insurance provider to process any refund you're entitled to.

Paying monthly:

  • Smaller, more manageable payments make it easier to budget.
  • Cancelling your policy cancels the direct debit. No more payments to make, and no refund needed. However, your insurer may charge you a cancellation fee.
  • If you don't pay the monthly payments you risk invalidating your car insurance policy.
  • Paying monthly is usually more expensive as insurance companies often add interest to the price.

**Based on Confused.com data June 2022 – Dec 2022

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*Based on data provided by Consumer Intelligence Ltd, www.consumerintelligence.com (February '23). 51% of car insurance customers could save £407.05
**Single annual policy. Shell Go+ account required. Only one £10 fuel reward can be used per transaction and each can only be used on fuel purchases of £10 or over. HelloFresh 18+ subscription service. Geographical exclusions apply. T&Cs apply

How can I reduce my car insurance costs?

Paying annually is just one way to reduce your car insurance costs. There are multiple ways to get cheaper car insurance:

  • Increase your voluntary excess
  • Enhance your car's security
  • Downsize your car
  • Build your no-claims bonus

Increase your voluntary excess, which is the amount you pay voluntarily toward any claim your make. This could lower your car insurance costs. However, bear in mind that a higher voluntary excess means that you're likely to pay more towards any future can insurance claims.

Enhance your car's security with features like an alarm, immobiliser or tracker. This makes it harder to steal and shows your insurer you're less likely to make a claim for theft.

Downsize your car as expensive cars with powerful engines are a bigger risk for car insurers. They're more attractive to thieves and often expensive to repair. Consider getting a second-hand car with a less powerful engine.

Build your no-claims bonus and you could get discounted prices as a reward for several years of safe driving. For each year you go without making a claim, you get another year added to your no-claims bonus (NCB). The higher your NCB, the bigger the discount you could get.

We compare up to 150 trusted insurance companies to get you our cheapest deal in minutes

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What information do I need for a no deposit car insurance quote?

You can get car insurance quotes with us and we'll compare 150 car insurance companies in minutes so you can find our best deals. It's important to remember that if you choose to spread the cost of your car insurance over 12 months, your insurer will carry out a credit check. You might not be able to get monthly car insurance if you have a poor credit history.

To get a quote, you'll need to tell us:

Vehicle information:

  • The make and model of your car
  • Your reg number
  • Your annual mileage
  • Any modifications your car has

Personal information:

  • Your driving licence number
  • Any claims or convictions from the past 5 years
  • Details of any named drivers you wish to add
  • Information about your occupation

What our car insurance expert says:

With the cost of motoring  going up for many, a car insurance with no deposit might seem like a good way to offset your spending. Unfortunately there's no getting away from having to make some sort of first payment. That doesn't mean good deals aren't out there to be found. Comparing quotes is the easiest way to find what's available to you.

Louise Thomas - Car insurance, personal Finance, mortgage and life insurance expert signature

Louise Thomas

Car insurance product manager

After buying car insurance, 96% of Confused.com customers would recommend us (based on 130715 Reviews.co.uk respondents - as of 25/01/23). Read our reviews