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UPDATED: Mar 13, 2020
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Car insurance can be prohibitively expensive especially if you are a new driver or a young driver. However, there are a few companies that do offer you the option of signing on for car insurance with a low down payment. Hartford Auto Insurance, Direct General Auto Insurance, and The General Automobile Insurance Services are three established and reputable companies that come to the aid of those drivers who cannot afford to make large lump sum payments towards their car insurance bill.
If you cannot afford to pay the high down payment many insurance companies require, click here to enter your ZIP code into the FREE toolbox to get a list of companies that offer low down payments!
A business article in MSNBC quotes research firm, Stifel Nicolaus, which found that automobile insurance prices has risen by 2.9% over the past year. Add to this inflation of insurances rates, the business practice of most car insurance companies that requires you to pay the first month’s premium at the very least when you sign up for a 6-month policy, and you could be facing a sizeable insurance bill. Yet there are highly ranked insurance companies that can help you lower the cost of insurance.
Understanding Low Down Payment Car Insurance
Car insurance companies offer policies with different forms of coverage to their customers at different prices, depending on the driver’s driving record, credit history, the type and age of car being driven etc. If you have good credit, you will find that most insurance companies will offer you a monthly payment plan.
However, if you have a poor credit history or driving record, the automobile insurance company might require you to pay a certain amount of down payment towards your total policy price. For some companies, this could be as high as two months’ insurance bill. Many companies will ease their requirement for substantial payment and allow you to get insurance by dividing your bill into twelve monthly payments.
You must remember to pay on time and in full, every month. Missing a payment could result not only in cancellation of your automobile insurance policy but also in the company’s refusal to re-issue your insurance. In fact, they might require you to pay the whole amount before re-activating your policy!
Hartford Auto Insurance
One of the best-ranked companies in the United States, The Hartford Auto Insurance is over two hundred years old. Recognizable by the popular stag logo, the insurance company is a leading provider of insurance and financial services to customers all over the world.
According to J.D. Power and Associates, the Hartford Company ranks highest among auto insurers in providing a satisfying shopping experience, as well as in policy offerings and price.
With a tagline, “We go the extra mile,” Hartford offers a range of options under its car insurance plans that include different forms of liability and discounts.
The General Automobile Insurance Services
Another highly advertised and recognizable company is The General Auto Insurance Company. Targeting people on a budget, The General largely services new car owners, drivers with a poor driving record, drivers with lapsed insurance policies, and people with poor FICO scores. Established in 1963, they are known for offering low down payments options with flexible payment schedules for both 6-month and 12-month policies, as well as monthly payment plans.
The company allows customers to apply for policies online, as well as pay their premiums and print their proof of insurance from their website. Additionally they allow buyers to auto pay their premiums and monthly payments using credit or debit cards (Visa, MasterCard, AMEX, and Discover) or their bank accounts. This saves you time and ensures that your policy is paid and intact.
The company also has stellar ratings with respect to their financial stability, as put forth by A.M. Best, a renowned financial research and ranking company.
Direct General Auto Insurance
Another automobile company known for its low down payments is Direct General Auto Insurance. Headquartered in Nashville, TN, the company has over 420 offices across twelve states including Arkansas, Florida, Georgia, Illinois, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, Texas, and Virginia.
The company focuses on drivers who might not have stellar driving and credit histories. Additionally, Direct General provides auto insurance to high-risk drivers. They customize the payment plans according to the needs of their customers and do not require them to have a checking account or a credit card. This makes it easy for people who do not have credit cards or bank accounts to get automobile insurance.
With the tagline, “We’ll do right by you,” Direct General allows its customers to pay by cash or money order. Additionally the company also offers motorcycle and life insurance, emergency roadside assistance and emergency protection.
Getting the Lowest Down Payment on Your Car Insurance Policy
Driving is an expensive undertaking. This is more so if you have just purchased a new vehicle using a car loan, which requires comprehensive car insurance or are a new driver with no driving record.
While the cost of your car insurance depends on a number of factors such as your age, the kind of car you drive, and where you are located, among others, there are some additional factors that can help you avoid huge car insurance down payments. Some of the options are as follows:
- Automatic deductions from your bank account: If you set up a system of monthly deductions, many automobile insurance companies are likely to extend low down payment option with your insurance policy. Indeed, some insurance companies provide additional incentives such as discounts up to 10% since automatic payments usually assure that the insurance company will receive your money in a timely fashion.
- Monthly premiums through your bank account: If you set up for automatic deductions from your bank account to pay for your monthly premiums, you are likely to get an insurance policy with no down payment at all.
- Good driving record: A good driving record with minimal or no traffic tickets is a certain way of keeping your car insurance down payment or deposit low. Car insurance companies judge your risk factor using your driving record. A clean record indicates a lesser chance of accidents, which in turn mean higher profitability for car insurance companies. So drive carefully, remember to keep your seat belts on, and follow all the traffic rules.
- Continuous automobile insurance: Car insurance companies prefer to give coverage to those drivers who have continuous coverage. Without such coverage, certain car insurance companies can charge you a higher premium, and higher down payment. If you are a new driver, you don’t have much of an option and will end up paying higher costs. However if you are letting go of your vehicle but plan to get another car in the future, it might make sense to get a non-owner’s insurance policy to maintain coverage.
- Improving your credit history: Car insurance companies are very focused on consumers’ FICO scores since it indicates whether they are financially responsible, and are able to pay their bills in a timely fashion. A poor credit score can increase your insurance bill by a substantial amount.
Besides these steps, getting the best low down payment automobile insurance requires some in-depth research into various insurance companies, their offers, and their discounts. According to a Consumer Federation of America booklet on insurance, it is very important to shop around. This can help consumers save a substantial amount of money.
Indeed, financial experts suggest that you shop around every year to make sure you avail all new avenues of reducing your insurance bill.
Downside of Low Down Payment for Car Insurance
Choosing an insurance company that will allow you to make a low down payment or deposit for car insurance and therefore, make it possible for you to drive legally might seem like a boon. However, while this makes driving affordable upfront, this option is not the cheapest in the long run. You will have to pay for the convenience of dividing your yearly bill into monthly installments. In other words, it will cost you more over the years if you continue to break up your payments.
Also, most car insurance companies will give you a sizeable discount if you were to pay your total automobile insurance policy price in a lump sum. If you can afford it, you should pay off your insurance bill in quarterly or bi-annual installments. Paying it off in full is, of course, the best option.
Not only will paying your policy in full save you some money, it also eliminates the need for you to remember your monthly car insurance payments.
Getting Low Down Payment Car Insurance
Today, customers are increasingly turning to the Internet to get information about car insurance. Whether it is getting quotes from various companies, comparing the numbers, getting instant approval or printing out their insurance card, the Internet-savvy insurance customers have it much easier.
While Internet technology has made it easier to research and get insurance, the cost of car insurance has continued to rise over the past few years. In case of some drivers, such as students or new immigrants, paying huge sums of money as a down payment towards their car insurance can be a great hardship. But the market does have some dependable options available for them. You just need to know where to look.
If you cannot afford a hefty payment, enter your ZIP code into the FREE toolbox found here to find insurance options with low down payments!