What Exactly Is No Down Payment Car Insurance?
If you ask for a car insurance quote from a new company and decide to purchase a policy through that company, you should not be surprised if they require that you pay at least six months of the insurance premiums before the policy goes into effect. Many insurance companies have this requirement; however, there are some that offer something called no down payment insurance. If you do not have enough money to pay for six months of insurance, you could consider looking for a no down payment policy, and here are a few things to understand about these types of policies.
They do not require a down payment
While there are many companies that require paying six months of insurance premiums in advance, there are other companies that require paying only two months of insurance. There are also companies that require paying a set amount of money to get a policy started plus the first month of insurance premiums. While these types of policies are great for people who can afford it, they are not good for people who are struggling to make ends meet, and that is why many companies offer no down payment insurance. With this type of policy, you will not have to pay any type of down payment. Instead, you will pay only the costs for the first month of coverage.
You will pay a bill each month
With a no down payment insurance policy, you will have to make a payment for your insurance coverage every single month, and you will need to make sure you do so by the due date. Missing the due date could result in the insurance company canceling your policy or raising your rates. The amount you pay will be for one month of coverage only, which is why you must pay it every single month.
You may pay more for this coverage
The other thing you should understand is that you may pay more for this insurance because it is a higher risk to the insurance company. Insurance companies generally prefer getting money up front, as this decreases the risks of them not getting paid. Therefore, they may charge you a monthly fee in order to pay by the month, and you might also pay a slightly higher rate for this convenience.
If you are unable to afford to pay a lot of money out of your pocket right now but need auto insurance coverage, find a company that offers no down payment car insurance. For more information about this and other options, contact a local insurance company like Nelson Insurance Agency.