No Deposit Car Insurance

Compare 110+ providers & save up to £490*, One short form – save time & money

Don’t have your registration number? No problem, click here.

Policies and deals from industry leading insurance providers, including

No Deposit Car Insurance Guide

By Eamonn Turley
Eamonn Turley Insurance Expert

Eamonn Turley has a wealth of experience within different insurance sectors. Through hard work and over time, he has gained expertise in digital marketing and user interface design. Elements that are crucial to any successful online business. The key aim is to develop websites that are intuitive, fast to load and provide insurance quotes tailored to your needs.

Expertise: Digital Marketing, Insurance, Home Insurance, Vehicle Insurance, UI Design
from the MultiQuoteTime Editorial Team July 2023

Many insurance firms use the term no deposit car insurance as part of an aggressive advertising scheme to get drivers attention who have limited funds, but still need instant vehicle insurance. While technically the term is factual, but payment is required within just a few days.

no deposit car insurance

Most brokers will accept a small or low deposit, followed by 10 monthly payments. Brokers will offer different deals and some call it low deposit car insurance. Spend time getting multiple car insurance quotes to enable easy comparison. Low deposit car insurance is available for all vehicle types, including vans, 4x4 car insurance and motorbikes

What Is No Deposit Car Insurance

The use of the term "cheap no deposit car insurance" or "instant very cheap car insurance with no deposit" are just insurance companies marketing ploys to increase business. They will in return offer monthly car insurance with no upfront payment.  In reality, you will still need to pay for the first month before the cover is activated, but it is a payment scheme that helps spread the cost over a 12-month period. It is not appropriate to call these schemes cheap, as they will likely always work out more expensive than if you paid upfront for your cover. 

Do I Need to Bring Money When Taking Out A No Deposit Car Insurance Policy?

No, when taking out a no deposit car insurance policy, no cash or funds have to be handed over to the insurance agent at the time the policy is signed. What does have to be presented is the bank account number that will fund the charge.

How Can They Call This Cover No Deposit Car Insurance?

Technically, no money is transferred to the insurance firm when the policy is taken out. This is how it can be called no deposit. With the surrender of the bank account number, the insurance company will set up an automatic withdrawal of the funds to activate the policy.

Is No Deposit Car Insurance Cheaper Than A Traditional Policy?

The amount quoted for coverage will be the total amount before interest. It is how the premium is paid that makes this type of policy different from the standard cover.

  • No deposit cover divides the total cost of the premium by 12. This makes it possible for the first payment to be only 8.33% of the total amount. Each payment after that is also only 8.33% of the total premium. Added to the total cost of the premium will be a fee. This can be a flat fee of £5 per payment or which can be a variable 10% on the total balance of the unpaid premium costs. Since the initial payment is small, the balance left to be paid is higher than what a person would pay for a typical monthly instalment plan.
  • Typical car insurance paid in monthly instalments has an initial payment of 20% down. This leaves only 80% of the premium left as the balance. The 11 remaining payments are also only 7.27% of the premium total. This path still has either a flat fee of £5 per payment or a variable rate of 10% of the outstanding balance.
  • By paying the full premium amount when the policy is taken out, the fees or interest rates are avoided making this the lowest overall cost in terms of an annual premium.

Who Provides Low Deposit Car Insurance

What Is The Variable Interest Rate?

The variable interest rate is one that calculates the payment that includes the interest on the total amount of the premium still owed. With this type of cover, that amount is 91.67% when the second payment is due. The typical car insurance premium only has 80% of the premium left as the balance, in which interest is accrued when the second payment is due.

Due to the outstanding balance, annually it is the most expensive, but it also has the lowest initial costs. Paying the premium on an annual basis is still the lowest cost overall.

Compare No Deposit Car Insurance Options Online

The panel can help you find and compare policies offered by brokers that provide low deposit car insurance and no deposit van insurance. Few if any will actually offer no deposit car insurance, but a low deposit option does come close.

*51% of consumers could save £490.26 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next four cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based
on representative cost savings from June 2023 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.

Scroll to Top