No Deposit Car Insurance UK

Pay for your car insurance monthly with the lowest possible deposit

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Do you have to pay a deposit for car insurance?

Although you cannot insure your car whilst paying out nothing at all, a lot of insurers will allow you to pay monthly for your policy, with the first instalment payable immediately. This is usually settled by credit card, which means that you don't actually have to put your hand in your pocket for any money right away.

How much deposit do I have to pay?

It can be as little as 1/12th of the total premium, but some insurance companies ask for 20% or more. The total premium is the initial premium plus any interest or management charges that are added on top. Nearly all insurers that provide monthly paid policies charge an extra fee for this service.

Some insurers will not accept monthly payments; these include some of the cheaper, well-known insurers such as Liverpool Victoria (LV=), Admiral and Privilege. Also, some motorists with very poor credit records may find it hard to find a company willing to offer them insurance cover of this type.

Can I pay monthly without any interest charges?

There are special offers from time to time of zero interest. This doesn't necessarily save you any money though, since it is almost invariably the more expensive insurers who offer this. Do bear in mind as well that even if you do get a nil interest deal, you will almost certainly find that this is not available when you renew your policy.

Will paying monthly affect my credit score?

Possibly. You will, in effect, be borrowing money for the premium, either from the insurance company itself or from a finance company that acts on their behalf. If, as expected, you complete all payments satisfactorily it could have a positive effect on your rating; however if you fail to make payments on time, it could have the opposite effect.

Is it much dearer to pay monthly?

It can be. Firstly, there is the interest charges to consider; these tended to cost around 11% of the initial premium throughout last year. However, there is also the fact that some of the insurance companies that offer the lowest premiums insist on full payment in advance; this means that you will not be able to take advantage of their cheaper prices if you have to spread your payments over the year.

Can I still pay monthly if I have bad credit?

This is really up to the insurers. Some of them may accept you under normal terms; some may ask for a larger deposit or charge additional interest. The answer is to use one or more price comparison engines to find out who is offering you the best deal.

Can I cancel a monthly paid policy?

Anyone can cancel a car insurance policy at any time. However, whether or not you would be entitled to reimbursement of any premiums you have paid, or whether or not you would have to stump up an additional payment as a settlement fee, would depend upon the terms and conditions of the company you had taken the cover out with. These terms and conditions have to be spelt out clearly before you actually buy the policy.

If you have paid a low deposit and have arranged to settle the balance over 12 months it is likely that you would have to pay something extra if you cancelled before the end of the year.

Is it possible to get insurance whilst pay nothing upfront?

It is a legal necessity that something at least has to be paid in order to make the insurance policy a binding document. So, you do have to pay at least a small sum to get the policy started. A common method of finding the money to do this is to get hold of a no – interest credit card deal, covering at least the next 12 months; you can then not only pay the premium off to your car company over the coming year, but you would also be able to pick a policy from a company which insists on full payment upfront, if this is a cheaper option for you.

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