Thanks to inflation, everyone is having to tighten their budget. This is just one of the reasons that many people are starting to look for cheaper car insurance policies, particularly those with a $20 down payment car insurance.

In order to activate a car insurance policy, companies require that you pay some amount toward the premium. In some cases, this can be hundreds of dollars. If you have less than $50 to get you through to the end of the money but need car insurance now, this can leave you in a huge bind. Do you come up with the funds to activate your insurance so that you can get to the places you need to go yet risk going without necessities, or do you opt to drive without insurance, hoping that you don’t get caught? Neither decision offers the right answer. In this situation, finding an inexpensive policy with a low down payment is your best option. 

20 down payment car insurance

Getting a $20 Down Payment Car Insurance

Insurance companies do offer payment plans. Although you may not get your down payment as low as $20, you may be able to get it to a much more manageable amount that doesn’t leave you strapped for cash. After calculating your car insurance premium, insurers will give you several payment plan options, including:

  • A 12-month policy that is divided into 2 payments, six months apart
  • A 12-month policy with payments due every four months
  • A 6- or 12- month policy that is divided into monthly payments

If your premium is determined to be $1,000, you would need to make your first payment to activate your insurance. In the situations above, this is how much you would have to pay.

  • $500
  • $334
  • $167 (6-month policy) or $83 (12-month policy)

While it’s true that you are going to have to pay a bit more than $20, you can get your coverage activated for as little as $83, which won’t strain your budget nearly as much as $500. If this is still too much to pay today, you can look for an insurance company that offers no money down coverage, though they can be hard to find. 

Tips for Getting the Cheapest Car Insurance

As mentioned above, an insurance company assesses many different things when calculating your insurance premium. The lower your premium is calculated, the less you’ll have to pay out of pocket to get your policy activated. To help you get the lowest premium, here are a few tips.

  • Be mindful of your driving history. If your driving record includes a variety of traffic violations and at-fault accidents, you will be considered a high-risk driver. This means that you are more likely to file a claim, resulting in the insurance company having to pay out money. As a result, your premium will be higher. On the other hand, if you have a good driving history, you are considered a low-risk driver and will be given a lower premium.
  • Choose your vehicle wisely. The make, model, and age of your vehicle are huge factors in determining the amount of your premium. The newer the vehicle, the higher your premium. Sports and performance cars, luxury vehicles, and vehicles with lots of modifications are much more expensive to insure. Performance vehicles, in particular, are more likely to be involved in accidents, resulting in significant damage. Likewise, luxury cars tend to be more expensive to repair.
  • Watch your credit rating. If you have a lower credit score, you are considered to be more high-risk, meaning that you are going to be charged more than someone with a good rating. Check your credit report annually to ensure everything on it is correct.
  • Look for discounts. Insurance companies offer all types of discounts that you may be eligible for. Possible discounts include:
    • Good student
    • Safe driver
    • Low-mileage driver
    • Senior/ mature driver
    • Multi-vehicle policy
    • Military or federal employee

Don’t be afraid to ask what discounts you may qualify for. You’d be surprised how much you may be able to save, resulting in a cheaper down payment.

  • There are several types of car insurance to choose from. Opt for a state minimum insurance policy. Liability or collision only coverage that adheres to your state’s minimum coverage amount is the least expensive option. Be aware that almost all vehicles being leased or financed will require comprehensive coverage.

on the spot 20 down

Potential Disadvantages of Low Down Payment Car Insurance

The major disadvantage of paying a low down payment involves how much you’ll pay in the end. You may pay more. Here’s an example. Insurance company A offers you a $20 down payment car insurance. For the next eleven months, you are required to pay $150 each month. At the end of the year, you’ve spent $1650 on car insurance. Another insurance company (B) requires a $200 down payment but charges $110 for the next eleven months. At the end of the year, you’ve paid $1410. Yes, you paid a low down payment with company A, but it has cost you an extra $240 by the end of the year.

Final Thoughts

To get the lowest possible down payment on car insurance, you’ll have to do your research. Reach out to multiple companies and request quotes. Be sure that you are comparing similar policies with the same coverage and deductible amounts. Compare the quotes and determine which one is best for you.