No deposit car insurance

Find cheap cover without paying a deposit

Find cheap cover without paying a deposit

Save up to £504 on your car insurance*

Save up to £504 on your car insurance*

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Compare deals from over 100 providers***

Compare quotes from providers that don't ask for a deposit now.

Find cheap car insurance quotes that don't require a deposit.

Many insurance providers will allow you to avoid the pain of forking out a lump sum to pay for you cover by opting for a monthly payment plan.

However, as well as charging interest, most providers will make you pay a deposit of around 20% of the entire policy value up front.

But there are some cheap car insurance providers out there who will offer a monthly payment plan with ‘no deposit’.

In This Guide:

What is no deposit car insurance?

Technically, there is no such thing as ‘no deposit’ car insurance. However, it is a term often used by insurers to promote their pay monthly car insurance plans, as opposed to paying for the whole years’ worth of insurance in one lump sum.

But these types of policy are still not technically ‘no deposit’, as you will still have to pay for the first month before you are covered. While these types of policy may work out more expensive in the long run, they can help to spread the cost of your premiums into manageable chunks.

Spread the cost of your insurance by paying monthly

Insurance can be costly, with some policies coming with premiums in excess of £1,000. Having to come up with this money up front can be difficult, and so paying monthly can soften the blow a bit.

However, most providers will add additional costs that mean you end up paying more in total than you would if you paid it all in one go.

If you can afford to pay off your premiums up front in one lump sum, then you’ll be getting a better deal.

Paying annually vs paying monthly

One of the many things you need to consider when taking out car insurance is deciding which type of policy to take out, and how you will pay it. There are pros and cons to both paying for your car insurance annually and paying every month, some of which we have outlined here:

Paying Annually

  • You pay for a years’ worth of insurance in one go, meaning you don’t have to worry about making a payment for another 12 months.
  • You don’t pay any interest over the course of the year so your annual premium will work out cheaper overall.

Paying Monthly

  • You spread the initial cost of a years’ worth of car insurance into 12 separate months, making payments more affordable.
  • The interest on your payments will mean you end up paying more over the course of the year.
  • If you miss a monthly payment, then this could negatively affect your credit rating – damaging your chances of taking out credit or a loan in the future.

Reducing premiums

There are other ways to reduce your premiums, helping to reduce the amount you’d pay up front if you were to pay annually.

For example, you can opt for a larger voluntary excess. The excess is the amount you pay in the event of a claim, with the insurance provider paying for the shortfall between that and the value of the claim. If you pay a larger excess, then your premiums will be lower, but bear in mind that this can prove false economy if you do have to shell out in the event of an accident.

You could also reduce your premiums by increasing the security of your vehicle. You can do this by installing an industry-approved alarm or immobiliser, or simply by parking it in a locked garage overnight.

Driving less will also result in cheaper premiums. This is because the less you drive, the less likely you are to be involved in an accident and make a claim. When taking out a car insurance policy, you will be asked for your estimated mileage. You should always be as truthful as possible, as if you’re shown to exceed this limit, then your policy could be invalidated. Another way to prove your mileage, as well as careful driving, is with a black box or telematics insurance policy, which can also reduce your premiums if you use them correctly.

Finally, you should always compare car insurance policies online to make sure you’re getting the best deal for your money.

Deposits and monthly payment plans

Most insurers, when you start a monthly payment plan, will make you pay a deposit up front. This is usually about 20% of the entire policy cost but can sometimes be even higher.

In some cases, particularly for the most expensive policies, this doesn’t really avoid the issue of having to come up with a large amount of money in the first place. Given that avoidance of this is the main reason most customers opt for monthly payment plans, the availability of no deposit insurance is crucial.

Apart from the lack of deposit, these policies are exactly the same as any other.

Compare no deposit car insurance with Money Expert

You should always shop around when taking out a car insurance policy, whatever kind of policy you're after. Head over to our car insurance comparison page and we’ll help you find the perfect deal for you, at no extra cost. All you need to do is enter a few details about yourself, your car, your driving history and the type of policy you want. Find a deal that suits your needs at a price you like, confirm the purchase and sit back, relax, and enjoy cheaper car insurance.

Last reviewed: 1 April 2024

Next review: 1 May 2024