Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Apr 13, 2022

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Key takeaways...

  • Car insurance is mandatory in almost every state, but this doesn’t mean that it has to be expensive
  • Many insurance companies only offer six or twelve-month terms, while others may offer shorter terms of three months
  • The best way to find cheaper auto rates for your particular situation is to visit a site that gives you quotes from numerous companies at one time
  • Your best source for this information is one of the companies that do the actual rating. Standard and Poor’s is one, as is A.M. Best
  • Make sure to check for available auto insurance discounts that you are eligible for

The 3 companies that offer the lowest down payment on car insurance are State Farm, Geico, and Progressive.

These companies offer lower prices than many of their peers and they have scored well in other categories in regards to car insurance. They tend to be chosen by many people because of their claims of saving you money, as well as their reputations.

Cheap rates for car insurance can be found at the top of this page by filling your ZIP code in the FREE quote tool above!

Car insurance is mandatory in almost every state, but this doesn’t mean that it has to be expensive.

Most insurance companies have made premiums affordable and offer an assortment of ways to pay for your policy so that it fits into your budget. These three companies are just a few of the ones that offer low down payments.

What do you need to know about car insurance?

When you purchase a car insurance policy, you are actually paying for a certain term. Many insurance companies only offer six or twelve-month terms, while others may offer shorter terms of three months.

You can often choose the term that works the best for you; however, a longer term is usually the better way to go.

The guideline with insurance is that you prepay for your coverage. If you haven’t paid your insurance or paid it late and you were in an accident before the insurance company received the payment, you will not be covered for damages.

You will also need to think about your coverage options as you prepare to buy an auto insurance policy. Most states have minimum requirements for liability coverage (bodily injury liability and property damage liability), and some also require personal injury protection, medical payments coverage, or uninsured/underinsured motorist coverage.

Keep in mind that if you only purchase liability insurance, your own repairs and injuries will not be covered. For those things to be covered you will need to add collision and comprehensive coverage.

Buying more auto insurance coverage will increase your insurance costs but it could save you money down the line if you’re in an expensive at-fault accident.

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What are your car insurance payment options?

Years ago it was common practice for drivers to pay for their car insurance policy up front and in full. This would be considered to be paying the biggest down payment.

Often, insurance companies would also offer the ability to pay biannually or quarterly, which would lower the down payment that you would be required to come up with at the start of your policy.

Fortunately, the majority of insurance providers now offer the option of monthly payments.

The advantage of this is that it helps you with cash flow and helps keep your budget on track, with you not needing to worry about coming up with a large chunk of money when it is time to renew your policy.

The downside of monthly payments is that they cost you more in the end.

Although it keeps the amount of money needed for a down payment low, you will usually be charged billing fees that apply every month.

These fees may be anywhere from $2 to $10 each month. Although it doesn’t seem like a lot, it adds up over the length of the policy. In the end, you usually save 10 to 15 percent on your policy when you pay it annually.

Even though it costs more, in the long run, most drivers, especially younger drivers and those who live from paycheck to paycheck, choose the monthly payment option if it is offered by their insurance provider.

Another way to save money is to choose a company that offers low premiums.

What are the cheapest car insurance companies?

Most of us are looking to save money in one form or another. When shopping for insurance for your car, the same policy holds true. The best way to find cheap car insurance for your particular situation is to visit a site that gives you quotes from numerous companies at one time.

One way to get an idea of how different insurance companies rate in terms of price is to go to J.D. Power and Associates’ website.

For J.D. Power’s studies, consumers rate car insurance providers in regards to different categories, and pricing is one of them.

Other drivers give insurance companies a rating between one and five stars, with five being the best rating possible.

While some companies rated higher in the pricing category, Progressive, State Farm, and Geico are popular companies that offer insurance throughout the country rather than in just one state or area of the country.

Looking at how Progressive rated in regards to price, it received three to four stars depending on the area of the country.

State Farm received mostly three stars, although it did receive five stars in the North Central region. Geico received anywhere from three to five stars, depending on where the drivers were from.

Not only did these companies receive pretty good scores when looking at how much their policies cost, they all offer monthly payment plans with no or low down payments.

How is the cost of auto insurance determined?

Whether or not you choose to pay for your car insurance in monthly installments, it is a pretty good idea to know what determines your rate in the first place.

Although the coverage you have on your policy will make a difference in what you pay, this is not the only factor. A lot of things depend on you.

Your driving history is one of the biggest things that will establish whether you pay more or less for an auto insurance policy.

Your years of experience will also affect your rate. A driver with multiple accidents and past claims will be considered higher risk and will pay more accordingly.

Going off of statistics alone, teenage drivers will pay the most for car insurance.

The National Highway Traffic Safety Administration reports that drivers between the ages of 15 and 20 get into more accidents than any other age group. This, along with their lack of experience on the road, causes their rates to skyrocket.

The kind of vehicle you drive, along with how frequently you drive it, will influence your rates. An expensive vehicle will cost more to insure. Where you live also affects what you will end up paying.

Each state will have different rates, with New Jersey and New York charging the most and Iowa charging the least. The local neighborhood where you live will also affect your rate, as some are considered to be safer than others.

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What do you need to know about car insurance companies’ financial ratings?

You should never choose an auto insurance company based on cost alone. Although many trustworthy companies are able to offer low rates, some companies are out there for their own benefit and will scam you out of your money.

Beware of insurance scams. If the rate seems too good to be true, it possibly is.

You should always make sure that the company you are looking at is licensed in your state and doesn’t have any outstanding claims against them. This information can be found through the insurance department in your state.

Another thing you should always check out is the financial rating of each company. Even if the company itself says that it has received a high rating, you should still investigate it on your own.

There is no use in paying a low down payment if the company isn’t stable enough to pay any of your future claims.

Your best source for this information is one of the companies that do the actual rating. Standard and Poor’s is one, as is A.M. Best.

According to A.M. Best, Progressive has an excellent rating of A+ with a stable outlook. State Farm also rates with an A+ and a stable outlook. Geico scores the highest, with an A++ and an outlook that is stable.

How can you keep your monthly premiums low?

Although you may be looking for a company that offers low down payments, you are probably also looking for low-cost premiums in general. The key is to tweak the factors that cause your rates to rise in the first place.

More than likely, where you live is probably more out of your control than some other factors. Your age and gender are also pretty difficult to change.

If you are between the ages of 45 and 65, however, you are in the lowest risk category. Female drivers also tend to pay less for car insurance, as statistics show that they get into fewer accidents than their male counterparts do.

Although you can’t change the fact that you are a teenager, there are things that can be done to decrease your rates.

Most insurance companies, including the three listed previously, offer a discount for those students who get good grades. If you get a 3.0 GPA or better, make sure that your insurance agent knows so that you can take advantage of any discounts available.

Some insurance companies will offer you a discount as a teenage driver if you take a safety class. This is also true for senior drivers, as seniors are the age group that pays the second highest in car insurance premiums. These discounts can offset the high auto insurance rates charged to these demographics.

The Insurance Information Institute claims that changing vision and perception issues are a couple of reasons for the increased risk.

Although not all of them do, most insurance companies will do a credit check to help figure out your rate.

If you have a poor credit score, you will be looked at as being more irresponsible and will end up paying higher rates. Those with good credit will have no trouble finding affordable car insurance. To get tips on increasing your score visit myFICO.

Keeping a clean driving record is the best way to keep your rates low. Obey traffic laws to avoid getting tickets and practice defensive driving to avoid accidents. High-risk drivers pay a lot for car insurance.

Most companies offer the opportunity to pay low down payments, so make sure that you choose a company that is good in other ways as well.

Make sure to research them and choose wisely.

What’s the bottom line?

You should always shop around when buying auto insurance, and getting online quotes saves you time and money. Make sure that you know what kind of coverage you need before purchasing.

Don’t buy from just anyone and don’t choose an auto policy based solely on price. Look for customer reviews and recommendations and check over a company’s financial ratings before buying.

It is easy to do a car insurance rate comparison of different companies by placing your ZIP code in the FREE quote tool below!