Low deposit refers to the first monthly payment you make on a car insurance policy, rather than the total cost you pay upfront with an annual policy.

Watch out: There is no such thing as no deposit car insurance; all insurers will charge an upfront payment when you take out your cover.


When you spread your payments over the year, the first down payment is a small part of the overall cost of the policy.

You should not base your decision on just the cost of the first payment: Always look at the total cost of the cover when comparing quotes.

Is it cheaper to pay monthly or annually?

Monthly is usually more expensive because insurance companies add interest when you pay in instalments, often between 10% and 30% APR.

For example, an insurer may give you two quotes:

  • An initial payment of £65 followed by 11 monthly instalments of £55 (£670 in total)

  • An annual lump sum payment of £600

How else could you pay?

If you pay using a 0% purchases credit card you could avoid paying interest and still spread the cost of your policy across the year. Just make sure your 0% deal lasts long enough.

Be aware that some insurers charge a fee for buying car insurance by credit card so make sure the overall cost is worth it.

Here are more ways to save on the cost of your car insurance.