Car insurance can be an expensive proposition depending on the type of car you drive, your driving history, and your budget. For many of us, cheap car insurance with no down payment is the only way we can afford to keep our cars on the road. If you find yourself in such a position there are some things you need to know when searching for a car insurance policy. Remember that the cheapest is not always the best.

The Coverage You Need

The cheapest car insurance across the board is that which only covers the minimum amounts required by your state. For example, New York requires drivers to carry minimum coverage’s for bodily injury, property damage, and uninsured/underinsured motorists (UM). Since every driver in the state must carry it just about every insurance company will charge the same for it. But it doesn't cover you against damage to your own vehicle; only the damage you cause someone else.

If you're driving an older car on which you owe no money, this minimum insurance policy might be a good option for you. With little or no investment to protect, minimum liability is the epitome of cheap car insurance. If you still have an outstanding loan you won't be able to go this route without violating the terms of your loan agreement.

Down Payment Options

It goes without saying that if you can pay for your entire insurance policy up front you will pay the lowest total cost over its term. But that's obviously not an option for everyone. Therefore, you might be looking for an insurance policy with no down payment required. These aren't as easy to find as those with low down payment requirements, but they are out there. Typically a no down payment policy requires monthly payments which will be due beginning in the first full month after you get your policy.

Understand that when you purchase insurance this way the insurance company is also charging you a finance charge for the privilege of paying monthly. Also be aware that these types of payment plans usually only apply to minimum liability policies. It's going to be difficult to find an insurance company providing you collision, comprehensive, and glass coverage with no money down. It's too great a risk on their part.

Cancellation for Missed Payments

Depending on your state, you may be subject to very stiff regulations regarding cancellation for missed payments. Using New York again, they are a state showing very little mercy. Your policy will be canceled, in most cases, at midnight on your due date if payment is not received by then. You'll then have 10 days to surrender your plates and registration, or prove that you have other insurance in force.

That means for a cheap car insurance policy with no down payment, you're likely to have 8 to 10 deadlines to meet every year. If you can at all afford quarterly payments or payment in full, you'll greatly reduce the likelihood of a cancellation.