There seems to be a lot of talk about “no deposit car insurance” these days and as the name implies, “no deposit” means you basically do not need to make a deposit towards your insurance policy initially. Not having to make a deposit is generally for new auto insurance customers. This methodology of selling insurance though is not very common because it doesn’t really make much sense on the part of the insurers. If you were the owner of an auto insurance company and you let all of your customers sign up without having to make a deposit, a lot of them may jump ship to different insurers before you actually collect the money that they owe for their premiums.
However, since a lot of people have wanted more customizable policies from auto insurers, getting no deposit car insurance has been made possible through some companies. Most reputable companies in the United States like Geico, State Farm, AllState, and Progressive are going to be somewhat confused if you ask them about getting car insurance with no deposit. This is because most places have various payment policies and they expect you to choose one and stick to it. Whether you are paying monthly car insurance payments or bi-weekly, there are going to be flexible options at most companies.
Not having to make a deposit towards your insurance for a certain period of time is not really the same thing as “skipping payments,” unless the policy states that you will get free coverage for a certain period of time as a new customer. Don’t think that this type of coverage is going to mean that you pay less in the long run than anybody else. A lot of people these days think that having fancy names for auto insurance like “no deposit” are indicators of savings. Although you may be able to get a good deal through an insurance provider, the name “no deposit” really does not say much other than the fact that for some reason you opted to pay no forward deposit upon purchase of your policy.
Does No Deposit Car Insurance Exist?
Of course there are auto insurance policies that carry the label of “no deposit” and they do exist. In most cases, though, they are not really anything special; sometimes they may mean that you initially save money when signing up for a policy. However, most auto insurance companies find ways to make profits off of their customers, so if they let you get coverage for a certain period of time without having to make payments, chances are good that they eventually will charge you enough to compensate for the services that they have provided.
In Europe and the United Kingdom, people are more inclined to get non-standard insurance policies like one day car insurance as well as no deposit auto insurance. If you don’t live in the UK or a European country, there’s no need to really worry about this type of coverage. However, if you are really want to find out more about it, continue to read some information in this article. There are some differences that people may point out between certain “car insurance with no deposit”-type policies and standard auto insurance policies that you should know about before buying.
No Deposit Car Insurance vs. Standard Car Insurance
The one difference that people may think of when comparing standard auto insurance policies to those considered “no deposit” is the fact that standard policies involve contracts between clients and the auto insurance company. When a deal is made, a lot of people think that people need to pay up front for being allowed to sign up with a certain insurer; in most cases this isn’t true since they are the ones that want business – they are not going to charge upfront fees in most cases.
Most people that know about no deposit policies and are familiar with them, know that the payments are typically just more spread out than standard policies. If you had a no deposit policy, you would basically be able to save money that you would normally pay out to your insurer upon the start of your contract. You would have a different payment strategy that would allow you to spread out your payments instead of having to put money towards a large deposit. Since there are so many different payment options, you may decide to pay over a spread out period of months or you may think that a bi-weekly schedule would be better.
Where this policy can get confusing is when people confuse it with other temporary insurance policies like “pay as you go car insurance” which is generally something that is completely different. Paying as you go is something completely different in most cases, so don’t assume that they are the same thing. In some cases of no deposit auto insurance though, you will be allowed to cancel and renew whenever you want without having to repay fees. Of course the exact details of your no deposit policy will differ depending on the provider – so if you have one of these policies, be sure to ask plenty of questions so that you know what to expect.
Can Everybody Get No Deposit Car Insurance?
No, not everybody can get this type of policy because it is not offered everywhere. People in the United Kingdom have more options when it comes to getting exotic types of auto insurance. In the United States, the average person has a standard policy that they make payments for on a monthly, bi-monthly, or bi-weekly basis. Even if there was an insurance policy like this in the United States, it would not be called “no deposit insurance” because nobody would have a clue what this would even mean for them as a customer. Sure the concept is easy to understand that somewhere along the lines they wouldn’t have to pay a deposit – but in the end, there aren’t really any advantages to getting this type of policy other than you may not have to pay as much money at the beginning of your insurance coverage term.
Even though not everybody can get this coverage, there are definitely places like the UK where this has become more popular in their market. In fact, the demand for these types of policies has significantly increased in recent years. Due to the increasing demands the companies in Europe have tried to make more customizable and customer-oriented policies available to the general public. In case you haven’t yet figured it out, getting customers is the major goal that insurers have; when they are not getting customers, they are not turning out as big of a profit margin. So, when a lot of people request that a certain type of policy become available like that of car insurance without a deposit, they are probably going to make it available for purchase.
How Long Before Making a Payment in “No Deposit” Auto Insurance Policies?
As with any type of insurance, the payment options and exact details will be subject to variation among insurers. Since many times “no deposit” implies “no upfront payment” towards a policy, you may not ever have to pay the upfront deposit. However, most of these types of policies are going to lay out several payment options for you to choose from. Some will be stricter and they will make you pay every single month. As a customer, it is important for you to do your own research and find out whether it is even a good idea to go with one of these policies. There are many great auto insurance policies that are affordable if you take the time to look around and do your research.
As a customer, it is probably not very accurate to expect a totally different coverage policy based on the fact that you didn’t have to make an initial payment. However, if you are thinking of “no deposit” as the same thing as a “pay as you go” – then this will be different. If you have been reading closely though, you should know that “pay as you go” is definitely not the same thing as car insurance with no deposit required.
Why People Get No Deposit Car Insurance Policies
The biggest reason that people get these types of policies is because they think that they are cheaper than standard ones. Price is usually the biggest factor that determines which type of auto insurance that many people choose to get these days. Other people think that not having to make an initial depository payment to their insurer is automatically going to turn out to be a better deal in the long run. If you have calculated the price of this type of insurance or have asked car insurance brokers about whether you can save with this type of coverage and it turns out to be a good deal, then it would be smart to take advantage of the price if the company is reliable.
Unfortunately, a lot of people forget to even think about the company that they are buying from when getting car insurance. I always stress the importance of looking up customer reviews as well as independent reviews from certain companies so that you know whether a specific company that you were considering for insurance is trustworthy and will provide you with a good overall price. Since getting “no deposit car insurance” is less common, you may not be able to find as many companies that are offering this type of policy and there may be fewer reviews online as to whether these types of policies are financially beneficial in the long run.
Determining if No Deposit Auto Insurance is Right for You
The truth is that this type of insurance is not going to be right for everyone. No insurer is a perfect fit for everyone and this type of policy is not going to be what everybody wants. For people that are short on cash or do not have enough money to make their first payment or any depository payments that are required will probably want this type of coverage. Unfortunately if you default on your car insurance payments, your insurance will likely get suspended or dropped and you could end up in a lot of legal and/or financial problems. However, if you know that you can get auto insurance without having to make large payments towards your premiums, you may be able to save a little bit of money with this type of policy.
You should never buy insurance based on the initial savings that you may get though. With no deposit insurance coverage, you should actually think about whether the company is good. If you only focus on savings to be had, you may end up with low car insurance costs, but the coverage quality may end up being poor. Don’t make the mistake of buying cheap no deposit car insurance when you know that it you would be better off with a different type of policy or company.