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No Deposit Car Insurance

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What is no deposit car insurance?

No Deposit Car Insurance is a bit of a misnomer. That’s because you will always have to pay something before your car driving insurance policy kicks in. Even if you opt to pay monthly by direct debit you’ll still have to pay around 20% upfront. Then there is the interest you will pay in order to cover the insurance company’s admin charges.

However, for many people – especially those under the age of 25 – they just can’t afford to pay the whole lot in one go so taking out a monthly direct debit is the only way they can get insurance.

But it’s not only young drivers who can’t afford to pay their annual cover in one go – many of today’s older drivers find themselves in the same position. It’s not surprising though when you consider that the cost of driving over the past decade has risen far higher than inflation. Wages meanwhile, continue to be outstripped by the general cost of living.


Third-party – The insurance company will pay out for any damage sustained to the other car if you caused an accident. It will also pay for injury to the other driver and passengers.

Third-party fire & theft – All that applies in the third-party is included here with the addition that you are also covered if the car goes on fire or is stolen.

Comprehensive – A full car insurance policy where you’ll also be covered for damage to your own car, as well as the other. Compensation for injuries is also covered – for both parties.

How can I get cheap car insurance with no deposit?

  • Offer to pay a larger voluntary excess and you can look forward to cheaper premiums over the year (just make sure you can afford to pay it in the event you cause an accident)
  • Make sure the car you buy sits in a low insurance category as that means your premiums will also be lower.
  • Consider getting a 0% balance transfer credit card, allowing you to pay the whole lot off in the one go. That way you won’t be paying any interest charges – either on your insurance or your credit card ‘loan.’
  • Make sure you have an excellent security system on the car – including a tracker – making it far more difficult for a thief to steal.
  • When not in use keep your car in your driveway or, better still, in a garage. Again, this makes the vehicle less likely to get stolen.
  • Always do your research and compare different sites. You may be surprised at the difference in costs between various companies.
  • Get a black box fitted to the car to let your insurance company know how competent behind the wheel you really are. That way you can get a discount on your insurance

Frequently Asked Questions

How long will my car insurance policy be for?

A standard car insurance policy lasts for one year, although it’s possible to get short-term policies for 6 months or even a couple of weeks.

Could my car insurance policy increase if I relocate to another town or city?

Yes, this could indeed happen if the new area is regarded as less safe i.e. if there’s more break-ins or vandalism etc.

I have a bad credit history. Will I still be allowed to pay my car insurance in monthly instalments?

Yes, but you may have to shop around. That’s because – whether it’s fair or not – not all insurance companies will allow you to do this.

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