Do I Need a Down Payment to Get Car Insurance?

Do I Need a Down Payment to Get Car Insurance

When you compare auto insurance quotes, you may find some companies offer no down payment for your new car insurance policy. You may have considered the down payment required when you were doing your auto insurance comparison and found the zero down payment attractive.

While some people do qualify for no down payment on their insurance, many people do not qualify for the no money down programs.

The decision to waive the down payment is directly related to your credit history, so it is a very good idea either to have a copy of your credit report, or at least look at your credit scores before shopping for insurance.

Insurance rates are based upon credit history and when you know what is in yours, it makes it easier for comparing rates.

For the no money down car insurance premiums, your credit score will need to be in the excellent range as determined by the car insurance company. Your credit score may have gotten you a good rate on a vehicle loan, but may still keep you from qualifying for zero down on your car insurance.

Some car insurance companies will require you to pay not only the premium or a portion of it, but a down payment on the entire premium. This can even be as much as 10 percent of the total premium plus your regular premium payment.

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Monthly payments will eliminate the need to pay three or six months of the premium upfront. The thing to remember about monthly payments is there is usually a processing fee attached to the monthly payment, which over time will increase your insurance premium. It may not seem like much when you pay a six-month premium, but if you go monthly, that surcharge can add up.

Just because the insurance company offers a no down payment option and you qualify does not mean that your state will allow the insurance company to waive a down payment. Because the insurance industry is regulated by each state, states that do not allow for a zero down policy will require you to make the down payment regardless.

One way to keep from needing a lot of money up front for car insurance is to clean your credit up. If you have a credit history that is spotty, you can work on your credit history by paying any bills on time and getting erroneous information removed from the reports.

There are three different credit reporting agencies that many companies use to check your credit and they all have a different way of reporting.

Trans Union, Equifax and Experian are three major reporting agencies and each one is legally required to give you a copy of your credit report annually with no charge. There are companies that will sell you your credit report on a monthly basis, but it is not necessary to see it every month, unless you suspect you have been a victim of identity theft.

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Annual reports are free and it gives you a chance to check your credit and make sure that the information is accurate and that you do not have things on your report that do not belong to you.

If you find discrepancies, you need to contact the credit reporting agency and follow their procedures for disputing a report. Fixing your credit history is a step that you can take to lower your car insurance rates.

If you are doing auto insurance comparison, you will want to make sure that your credit history is accurate and complete. When you compare auto insurance quotes, you will want to know that all the companies are using a recent credit history.

Comparing car insurance down payments can be used to determine the best insurance rates for you.