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Okay, you want a low deposit, no deposit, nil deposit car insurance policy. Let's skip the reasons why car insurance costs are so ridiculously high, you probably know all about them already. The fact is that you need to buy some, and you either can't afford to pay the full amount right now, or you don't want to. What are your options?

You've probably seen a lot of websites which say that you can have 'no deposit' car insurance. This is complete nonsense. It is absolutely essential to pay a deposit for a car insurance policy, because if you do not the policy will be unenforceable; that is the way that contract law works. What you can have however is a policy that you pay for in 12 instalments, with the first instalment, at least, put on your credit card. This way the insurance company gets paid the deposit, the policy is legal and you don't have to actually put your hand in your pocket to produce the money right away. How they call this 'no deposit' is a bit beyond me; but that is insurance companies for you.

There is one huge disadvantage to this system, which will become obvious as soon as you get the quotes. Monthly (I refuse to call it 'no deposit') car insurance is more expensive than the same policy would be if you paid it upfront in the normal way, because the majority of insurance companies add on interest charges, so you need to get quotes for both prices. Fortunately, there is a huge demand for policies paid in this way so some companies are more lenient than others. The best way to get some good quotes is to use a specialist price comparison system that not only finds you the lowest quotes but also tells you what they will cost if you decide to pay in advance as well as monthly, so that you can make your own decision about what you want to do. Whatever you decide, the policy should be exactly the same whether you pay upfront or not.

Just like every other Policy you need to be absolutely sure just what benefits you are buying, and which you are not. Most car insurance companies, believe it or not, are getting financially squeezed these days so a lot of them have been tightening up on their benefits. For instance, it does not pay to assume that you will automatically get cover for any vehicle not belonging to you, this is a proviso that the government wants to see stamped out, and a number of insurers have complied. Some policies allow for you to receive a courtesy car in the event of an accident, but quite a few specify that this will only be provided if they have one available; in other words it is not guaranteed! And one of the worst drawbacks that many people never notice is the policy excess; whereas this used to be a nominal amount a lot of insurers now ask for an absolute minimum of £500 to be paid by yourself before they contribute towards a claim; the reasoning behind this is that if they are responsible for an accident many people will rather pay the costs themselves rather than pay out the excess, and then still face greatly inflated premiums in the future. Incidentally, if you have a 'protected no claims bonus' it isn't really worth the paper it's written on; if you make a claim the bonus will remain the same but the basic premium will still shoot up, meaning you'll pay a lot more anyhow! If they can't get you on the swings, they'll get you on the roundabouts.

So, to sum it all up, you can indeed get a policy without paying anything right now, but as ever, you need to check the policy documents very carefully indeed before you commit yourself. Do bear in mind that once you have accepted a quotation you will have also accepted the insurance company's terms and conditions, and these will almost certainly include charges that they will make if you cancel the policy, or fail to meet all of the payments.

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