Many people look for no down payment auto insurance because they need coverage right now but they are short on cash and cannot afford to pay for a six month or even three month contract. It is not easy finding a company that will offer coverage without a down payment, but it can be done.

The reason few companies offer this type of deal is because insurance coverage is a contract and in order to have a contract, there has to be an initial charge. No down payment means a valid contract does not exist. But some companies will work with a person who is on a tight budget.

In this economy, there are many people who have to stretch every dollar in the checking account. And insurance companies know this. For instance some insurance companies will split the premium into monthly charges. This way a person will pay a much smaller amount to start the coverage as opposed to paying for a six month policy up front.

People need to be aware of added on charges that companies require of people who pay month to month, which at first might seem small but can add up over time. For instance, some companies will charge a policy initiation fee. This could be anywhere from ten to forty dollars.

Also, some companies charge for installment payments. The charge can be as low as two dollars per month or as high as ten dollars per month. A forty dollar initiation fee plus a ten dollar service charge adds up to $160 each year. This would be the cost for having to ask for insurance coverage without having to pay a down payment.

But some people are in a financial situation where they have to pay the extra charges. For those who have to do this, the best plan is to get auto insurance and then start saving money so they can, as soon as possible, pay for six month or even one year of coverage in advance in order to avoid the service charges.

For those who are looking for monthly payment options they should find out if there is an initiation fee and how much it is. Also, they should find out how much the monthly service charge is to be able to pay month by month. Many people these days have to pay month by month and insurance companies have to compete for this market with other companies. People would be wise therefore, to shop around for the lowest initiation and service fees offered.

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Category: Finance/Insurance
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