The truth of the matter is that car insurance does not come very cheap. In addition to all other car expenses, you must consider the car insurance as another great expense. Doing away with insurance could prove very costly. Through this article, you will learn the pros and cons of no deposit auto insurance.
You May Be Wondering What No Deposit Car Insurance Is
Most insurers nowadays will charge a deposit once you sign with them as your insurer. The contract that you sign will have details about this deposit and all other terms and conditions. Insurers charge this deposit so as to get a sense of security out of the contract in case you do not pay the premiums on time and as required. They will also be able to make more profit.
Some companies do not include this deposit as a policy. They are thus very cheap car insurance with no deposit. These insurers only require you to pay your premiums as 12 monthly instalments per year. You thus save money on your total expenditure because you only pay for premiums and save money that you would have spent on the deposit.
I recommend this no down payment car insurance to people who cannot afford to pay the initial deposit which is often a large sum of money. The insurers will allow you to enjoy the cover while paying the amount in instalments.
You may be concerned whether this sounds too good to be true, right? Relax, it isn’t. However, you need to first note something before you set your mind on a no deposit auto insurance. Since this type of insurance is at risk to the insurer, (they might end up making a loss based on an individual from their claims) the amount of claims that you can receive will have a direct relation to the premiums you pay.
How Will You Know That This Type Of Insurance Is Not The Best For You?
A no down payment car insurance may not be the best option if you:
- Do not want to pay monthly instalments for your car
- Have the means to pay a large deposit right away.
- Do not want to bear the burden of penalties and policy reinstatement fees in the event that you do not pay a premium on time
How To Know If No Deposit Auto Insurance Is The Best For You
- You are a student and thus will not be able to pay the hefty deposit right away.
- The large deposit is unavailable to you at the moment.
- Before acquiring the vehicle, you realize that the lump sum deposit could get in the way of you buying the vehicle
- The economic situation does not favour liquidity and yet you need to cater for other expenses every day
Before you make a final decision, shop around and inquire. Do not be quick to settle on an option before you learn more about it.