Compare no deposit car insurance quotes

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Car insurance is expensive for many motorists all over the UK. Comparing insurance with mustard.co.uk means you can be confident about for a policy that suits your needs as well as your budget.

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  • What is the average deposit for car insurance?
  • Can I get low deposit car insurance with bad credit?
  • Can I get car insurance with no deposit?

Jump to section

  • What is the average deposit for car insurance?
  • Can I get low deposit car insurance with bad credit?
  • Can I get car insurance with no deposit?

Cheap car insurance with no deposit

If you want to save money on insurance, no deposit car insurance can seem a good way to get a great deal. Most things that are defined as ‘no deposit’ means you can buy something without paying any money upfront. But can you get car insurance with no deposit?

No deposit car insurance isn’t what it seems as you’ll always need to make a payment before your car is insured by an insurance company.

You can search for great value car insurance cover from a range of leading UK insurers. Searching for quotes is quick and easy and you can do it all from the comfort of home.

What is no deposit car insurance?

No deposit car insurance simply means paying for your policy in monthly instalments instead of one lump sum. In truth, the term ‘no deposit’ is a bit of a misnomer because you still need to pay for part of the policy before your car insurance cover can start.

Car insurance is calculated annually, and there are two ways that you can pay for your cover.

  1. You can pay for your premium upfront in one lump sum. This can work out cheaper in the long run, but it does mean that you will have to pay a large amount of money in one go. Therefore, many people opt to pay their car insurance premium over 12 months.
  2. You can pay for your premium over 12 months, normally by direct debit. This allows you to split the payments evenly over the year and means you don’t have to find a large amount of money for your car insurance.

When will I start paying for no deposit car insurance?

If you purchase a no deposit insurance policy, you will have to pay the first month’s cover immediately. However, you do not have to pay an upfront deposit as such, as the insurance provider is allowing you to spread the cost of your policy over 12 months.
If insurers didn’t take an initial payment, they would essentially be covering you for free until the payment was made. If you made a claim during that time, the insurer would be compensating you even though you hadn’t made any contribution to the cost of your cover. In the long term this wouldn’t be a feasible business model and insurers could end up paying out vast sums without having collected any premiums.

What information do I need for a no deposit car insurance quote?

When comparing your car insurance quotes at mustard.co.uk, you will need to supply a few details about yourself and your car. Here is some of the information you will need to hand:

  • The make and model of your car
  • The date your car was registered
  • Your age and job title
  • Your address including details of where you keep your car overnight
  • How you use your car, for example, if you commute to work or just use it to visit friends and family.

How is car insurance calculated?

Car insurers will consider several factors to help work out the cost of your premium, for example:

  • The type of car you drive – powerful, expensive cars in high insurance groups generally costs more to insure.
  • Where you live – busy towns and cities or areas with higher than average crime rates can increase premiums.
  • Your age – younger drivers are statistically more likely to be involved in an accident so if you’re under 25 you’re likely to pay a lot more compared to other age groups.
  • Your driving record – premiums can be significantly more than the average if you have points on your licence.
  • Your claims history – a recent claim can increase the cost of cover.

Insurers need this information to work out what the chances are of a claim being made. It’s crucial to be as upfront as you can, if not, you run the risk of invalidating your policy which means your insurer can refuse to pay out.

How to get cheaper car insurance without a deposit

In reality, the cheapest way to get car insurance is to pay for the whole policy upfront. It’s a lot of money but it means you avoid monthly interest fees.

However, if you are on a budget for your car insurance and are unable to pay your premium upfront, then you have the option with most insurers of paying your car insurance over the year.

If you do need to pay in monthly instalments, you’ll get the best value by keeping up to date with payments. If you’re using a credit card to cover costs, you should aim to pay off each month in full to avoid paying even more interest. Alternatively, using a 0% interest credit card for payments can help minimise extra expense.

When deciding on the best way to pay for your car insurance, we have put together some important factors to help you make your decision:

  • If you are paying via direct debit instalments, you will most likely be charged interest. This could end up costing you 10% to 25% more over the year if you pay your premium by monthly instalments.
  • If you are paying via your credit card, a 0% credit card is only interest free for a certain amount of time. Make sure you can keep up with the monthly payments, as any missed payments could lead to damaging your credit rating.
  • Most insurers will have an administration fee for those that are paying via credit card. Make sure you check the terms and conditions to ensure that you are aware of any fees that you may be charged on top of your insurance premium.

No Deposit Car Insurance FAQs

Can I get no deposit car insurance in the UK?

No deposit car insurance technically doesn’t exist because you still have to pay an amount before cover can start. 

Policies that are called ‘no deposit’ simply allow you to spread the cost and are readily available from most insurers.

Why do I have to pay a month in advance for no deposit car insurance?

In almost all cases, you need to pay for insurance before cover can start. 

If insurers didn’t take an initial payment, they would essentially be covering you for free until the payment was made. If you made a claim in that time, the insurer would be compensating you even though you hadn’t made any contribution to the cost of your cover. In the long term this wouldn’t be a feasible business model and insurers could end up paying out vast sums without having collected any premiums.

What is the average deposit for car insurance?

If you decide to pay in monthly instalments, you can expect to pay anything between 10% to 30% of your total premium as your first payment.

It’s a good idea to check the overall cost of the policy as headline offers can be a little confusing. For instance, policies with a low initial payment look like a great deal, but this could mean future monthly payments are more expensive compared to policies with a higher upfront payment. In other words, higher initial payments reduce the total amount you need to pay. That means lower monthly instalments and lower interest rates – so you pay less overall.

Can I get low deposit car insurance with bad credit?

Paying in monthly instalments, means entering a credit agreement with your insurer. If your credit rating isn’t great, you can expect to be charged higher interest rates because there’s an increased risk of defaulting (missing payments).

It’s also worth bearing in mind that choosing to pay for your policy in instalments will mean the insurer has to run a hard credit check against your name. This will show up when you apply for credit elsewhere.

Applying for lots of credit can be a red flag for many firms and could mean you get less favourable interest rates in the long run.

Can I get car insurance with no deposit?

No deposit car insurance doesn’t really exist, as you must make a payment before your car is insured. It simply means that you pay for your policy in monthly instalments rather than paying it in one lump sum.

When comparing car insurance quotes at mustard.co.uk, you can see the price of your premium and what it will cost you annually (one payment) as well as monthly instalments. This allows you to choose the best policy for your budget. You can start comparing quotes here.

Compare car insurance quotes today!