Is there a down payment for car insurance?

Question

The best way to find cheap car insurance in Florida with a low down payment is to compare quotes and payment plans from different car insurance companies. Progressive, GEICO and Liberty Mutual are the three cheapest car insurance companies in Florida, according to WalletHub’s 2019 study. They’re a good place to start.… read full answer

Florida is one of 7 states that allow drivers to purchase auto insurance with little-to-no money down, other than the first month’s premium. You must pay some amount upfront to activate your insurance. Companies that advertise “no down payment” simply mean that your initial cost is payment of your first installment, without anything extra added on. However, not all drivers can buy car insurance with no down payment, because it depends on the amount of risk the company is taking to insure you. People with poor credit, a poor driving history, or an expensive new car may face a larger down payment.

When buying an auto insurance policy in Florida, you typically have the option to pay your 6- or 12-month premium in one lump sum or in periodic installments. Installments can be monthly, bi-monthly or quarterly. You will save money overall, usually 5%-10% annually, if you can afford to pay your entire premium at once. However, if that’s not possible, find an insurance company that offers a payment plan that suits your budget.

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Answer 1 · 2021-07-16 19:27:53

Merrill Burchell, Car Insurance Writer

@merrill_burchell • 07/16/21 This answer was first published on 07/15/19 and it was last updated on 07/16/21.For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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Yes, a car insurance down payment is required when you purchase a policy. You have two options when buying a policy from a major auto insurer. You can pay in full upfront, or you can make an initial payment and pay off the full premium over time.

The initial down payment is generally between 8% and 33% of the full premium. But whichever payment plan you choose, your first payment must be made right away.

Why Insurers Require a Down Payment on Car Insurance

The down payment on a car insurance policy ensures that you can be covered quickly. An insurer’s underwriting process takes time, but the company doesn’t make you wait. Instead, it lets you legally purchase your policy at the time you apply. Once you make a payment, if an accident or loss of any kind occurs, your policy is in effect and you can file a claim.

However, if the insurance company finds out during underwriting that you haven’t provided truthful or complete information on your application, it will likely cancel the policy.

Factors That Affect a Car Insurance Down Payment

The size of the down payment and the payment options your company offers can vary, depending on where you live, your credit and driving history, and how long you've been a customer. If you can afford to pay your full premium upfront, it’s usually a good idea. Many companies offer an 8% to 10% discount for paying in full. However, if this doesn’t work for your budget, do some comparison shopping to find a payment plan that does.

Answer 2

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Is there a down payment for car insurance?

Merrill Burchell, Car Insurance Writer

Why Insurers Require a Down Payment on Car Insurance

Factors That Affect a Car Insurance Down Payment

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