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Purchasing a new car is a big financial commitment, so you may be looking to offset the cost by getting what’s sometimes referred to as ‘no down payment auto insurance’. However, is this kind of insurance right for you?
What is No Down Payment Auto Insurance?
In Maryland, drivers are legally obligated to have auto insurance in order to be able to operate a motor vehicle. This means that if you buy a new car, you are required to have insurance covering you before you can drive it away. When you make a new car purchase, you may not have considered the additional cost of vehicle coverage.
No down payment auto insurance is a way to get coverage for you and your vehicle without paying a single penny first. This may seem too good to be true – and often it is. There are many deals available for this ‘buy now, pay later’ coverage, but legitimate coverage can be hard to find. After all, a zero-down policy means the insurance company is taking a gamble.
Why Do Insurance Providers Need a Down Payment?
There are several reasons why a coverage provider would ask you for a down payment. First of all, the initial down payment covers the cost of setting up insurance. While this is mostly administrative fees, the down payment also includes the price of a check on your driving report.
Another reason is that providing a down payment shows the insurance company that you are a lower-risk client. This is in the provider’s best interest – after all, even though they are there to cover you in case of an accident or if you need to make a claim, their goal isn’t to insure risky drivers.
There are several companies who offer no down payment auto insurance in Maryland. These providers give you instant coverage without you having to spend anything, and the best way to make sure you get the coverage you need is to have all of your details available when you make your application.
What Do I Need for My Auto Insurance Application?
When you contact your no down payment auto insurance provider, you will need to have all of your personal details as well as the details of your vehicle. This means the make, model, and year of your car, plus any additional information.
Before you make your application, consider the following and how these may impact the outcome:
- Do you have any penalties? Something as small as an unpaid parking ticket can affect your chances of finding the coverage you want. Make sure all tickets are paid, and there is nothing outstanding.
- What is your driving record like? If your file is not clean, for example, if you have been involved in a collision or road traffic accident, you may find it difficult to find no down payment auto insurance in Maryland.
- What kind of deductible can you afford? If you are willing to pay a higher deductible out of pocket in case you need to make a claim, this will not only lower your monthly premium but improve your chances of having your insurance application approved.
- What kind of coverage do you want? If you make an application for a higher level of coverage other than primary liability, you are showing your insurance provider that you are looking for a longer-term policy.
- Does your vehicle have safety precautions? The way your vehicle is kept secure can help increase your chances of approval. If your car has an anti-theft system, an alarm, or a wheel locking system, this improves your vehicle security and makes your car less of an insurance risk.
Why Do I Need Coverage?
For the majority of states in America, you are legally required to have a minimum level of auto coverage before you can operate your motor vehicle. If you are found to be driving without this level of coverage, the penalties can be steep – from a ticket violation to having your newly purchased car impounded or being arrested.
Coverage also protects you if you’re involved in an accident. Without insurance, you would be responsible for repair costs, and you could be liable for medical and legal fees if you are found to be at fault for the collision.
If you can’t afford to pay money upfront for your MD vehicle coverage, the best thing to do is seek out no down payment auto insurance in Maryland that way, you are sure you can afford the coverage you need.