There is a lot of myth and misconception surrounding car insurance with no deposit. Technically, you cannot buy car insurance without a deposit, as it does not fulfil the legal criteria for a valid contract. A typical car insurance cover only starts after the consumer makes an initial payment. What, then, is the buzz about no deposit car insurance?
While far from a fraud, car insurance with no upfront deposit essentially refers to the practice where the company spreads or distributes your payment into 12 equated instalments, payable over the course of a year. However, as you can see, there is still an upfront payment to be made in this case, although the sum is only 12th of what you would have put up in the case of a one-off payment.
The question, of course, is whether it is cheaper or makes sense to pay your insurance deposit over a period of 12 months instead of paying the full amount in one go? The answer depends on a variety of factors including your ability to furnish the full amount up front. The conventional wisdom, however, is that the total cost of a one-off payment is substantially cheaper than the so-called car insurance without deposit.
The appeal of a ‘no-deposit’ insurance scheme is understandable. Payment under a no-deposit scheme helps a lot of people get insurance cover who might find it difficult to arrange for the full payment in one instalment. However, if you do your homework, it is also possible to make sure that your no upfront payment car insurance does not cost you more than normal insurance. Let us see how.
1) If you compare insurance prices on various websites, you will find that switching to a new insurer might result in considerable savings. This is because insurers have attractive offers for new policyholders in terms of low premium obligations. Thus, even if you pay slightly more for the facility of monthly instalments, lower premium means the overall cost remains affordable.
2) Similarly, a lot of insurers have begun to offer monthly or deferred payment obligations without any onerous or substantial extra cost. This is primarily because the market for such deferred deposit insurance is booming, and companies want to attract as many new customers as they can. The competitive dynamics of the market means that you do not have to pay a substantially higher amount for deferred payment facility.
3) Finally, when you are researching about insurers and their policies online, you get to make an informed decision. In other words, you get to learn about best policies, special offers etc and improve your chance of saving some money.
1) Get your Details Sorted: Details regarding your car as well as personal information should be available at hand so that you can get quotes from several cheap no deposit auto insurers on the basis of a single online application.
2) Compare the Non-binding Quotes: Once you have successfully submitted the information and filed the application, you will receive several non-binding quotes from insurers. It is now your responsibility to sit down and compare the various quotes in terms of their cost, monthly payment obligation and premium.
3) Choose the Best Plan: Depending on your financial position as well as any other specific needs, you can now choose a plan that best suits your requirements.