Month: August 2024

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If you’ve been looking for a rental of any kind, you know how tough the hunt can be. Dozens of applicants for each vacancy, stricter credit, income, and referral requirements from landlords, bidding wars. These are, unfortunately, all part of navigating today’s tough rental market.

The culprit is a national housing shortage that has been brewing for more than a decade. After the housing crash of 2008, new construction of homes and rental units slowed dramatically. An uptick in building was later offset by supply chain and other pandemic-related delays. Meanwhile, rising mortgage rates made owning a home less affordable, prompting lots of would-be buyers to stay put in the rental market. The result? During the height of the rental crunch in early 2022, apartment occupancy hit an all-time high of 97.6% and rents jumped an average of 15.2% throughout the country.

Although the rental market has cooled somewhat since then, rents remain high and lower-cost rental units are in especially high demand. About half of people who rent are considered cost-burdened, meaning they spend more on rent than the recommended 30% of income.

If you’re competing in a tight rental market — or just competing for an affordable rental to call home — these four steps can help you anticipate what landlords are looking for and help you present yourself as the ideal tenant.

Tips to Get Approved for a Lease

Step 1: Know Your Number

Determine just how much you can afford for housing costs.

The advertised or asking rent is just the beginning. You’ll also need to take any fees, utilities, maintenance, parking, and renters insurance into account. If it’s been a while since you signed a new lease, you may need to adjust your estimates for these costs upward. Moving to a new area? Whether you’re renting or in the market for a house (and a home loan), check out a cost of living by state breakdown to get a feel for the numbers.

Take into account the possibility that you might find yourself in a bidding war. In the heat of the moment, you may outbid the others but also end up with an apartment you can’t comfortably afford. To avoid this scenario, determine your ideal monthly payment and stick to that number, no matter how tired you are of the apartment hunt.

Step 2: Prepare Your Rental Resume

Apply for a rental the same way you approach applying for a job. You want to make sure you fulfill all of the requirements, and then some.

The first step to getting approved for an apartment is usually filling out an application online. Be sure to do so accurately and thoroughly. When the time comes to see the place, you’ll help make your case if you bring the following:

Copies of Your Credit Reports

Landlords routinely do background and credit checks on applicants they are considering. Offering a copy of a credit report gives them on-the-spot information. If something on your report is confusing, you can attach your own letter of explanation.

Most landlords will look for a good FICO® score (670 to 739) or higher. Find your credit score on a loan or credit card statement or through an online credit score checker. Or get it for free from Experian.

Proof of Employment and Income

Landlords want to know that you can comfortably afford the rent. To prove you can, you could bring copies of your past three to six months of pay stubs, a copy of your most recent tax return, and contact information for your current employer. (This may be more than the landlord is asking for, but it helps build your case.)

Some, but not all, landlords also require employment history information. Having a list of former employers and their contact information on hand can help speed up this process. Even if it’s not required, the list helps paint a more complete picture of why you’re a trustworthy candidate.

References

Be ready to present credit references, which may include character references and asset documentation. Personal references from your boss, a co-worker, or another nonfamily adult who can vouch for you are a good idea. The landlord or agent may not call these people, but having them on your list is a sign of your professionalism and trustworthiness.

Landlords probably also will want the names, locations, and contact information of any previous landlords. A stellar rental history can help put you ahead of the crowd, so you want to make it easy for the agent or landlord to check on you.

If you’ve had trouble making rental payments, it’s best to be honest and offer an explanation.

Documentation for Service or Assistance Animals

According to the Fair Housing Act, a person with a disability may seek a “reasonable accommodation” from a housing provider so that they may have an equal opportunity as a nondisabled person to use a dwelling, even one that otherwise does not allow animals. The disability can be physical or mental.

Service animals, defined as dogs, are not considered pets, and housing providers cannot charge fees or deposits for them.

So-called emotional support animals have ruffled feathers throughout the country. First, applicants with assistance animals must make a request for reasonable accommodation, and not necessarily in writing. If the disability is not observable, they must provide reliable information — typically a letter from a medical provider or therapist — to the housing provider showing that the animal provides assistance.

Beyond that, the U.S. Department of Housing and Urban Development (HUD) does not allow housing providers to seek personal details of a person’s medical history. Importantly, HUD says that online certificates alone are not sufficient to reliably establish that a person has a nonobservable disability or disability-related need for an assistance animal.

So if you have assistance animals, it’s a good idea to bone up on the laws, which can be complicated, and have professional documentation.

Step 3: Show an Interest

It may sound trite, but landlords and rental agents are reassured when they know that someone really wants to live in the property. At a time when demand is high, this can be even more important as landlords become inundated with calls or online requests.

If you’ve visited the property before, have a friend in the same complex or nearby, love the neighborhood, or even appreciate the architecture or amenities, be sure to say so. Landlords want to know you’ll enjoy living there and, in turn, take good care of your new home.

Step 4: Prepare to Pay

Many leases have been lost when an early and promising applicant is ready to rent but doesn’t have the funds available.

Make sure you bring your checkbook or an electronic payment option so you can pay your security deposit, first month’s rent, and whatever else is required immediately. And, of course, make sure you have the funds available, while still leaving room in your budget to also cover moving expenses.

Move-in money can obviously be a challenge to come up with. If it’s several thousand dollars, a personal loan could help.

Did you snag the apartment or house? Once you move in and exhale, undertake a few renter-friendly updates to help you make the space your own.

Recommended: How Home Ownership Can Help Build Generational Wealth

The Takeaway

It’s a challenging time to look for a rental. But preparing thoroughly before you start your hunt and taking steps to show landlords your qualifications and genuine interest can help you stand out in the crowd. In this rental squeeze, however, some house hunters may find that it makes more sense to build equity in their own home than to pay rent.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How do I impress a potential landlord?

Make sure you fill out the rental application fully. When you tour the apartment, bring along a copy of your credit report, proof of employment and income, and contact information for some character references. Then express genuine interest in the property — comment on the building or neighborhood, for example — to show you’ll be invested in caring for your rental home.

What kind of background check do most landlords do?

A background check from a potential landlord might include a review of your credit history, employment and income history, and even a criminal background check. Some landlords also check for a history of eviction. They may also contact a former landlord or ask you for a character reference from a friend or colleague.

How much money should I have saved before renting an apartment?

You’ll want to have at least three months’ worth of rent saved before you start apartment hunting — the equivalent of your first and last months’ rent plus a security deposit. What’s more important, though, is that you have carefully considered the full cost of renting — including paying for utilities, renter’s insurance, and perhaps expenses such as parking. A good rule of thumb is that your housing expenses should not exceed 30% of your take-home pay.

Photo credit: iStock/cnythzl

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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOHL-Q324-030

Source: sofi.com

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Living in Hawaii offers unique experiences, from stunning landscapes to fascinating culture. Whether you’re looking to rent in Honolulu or searching for an apartment in Hilo, these fun facts about the Aloha State will give you more reasons to appreciate this island paradise.

1. Hawaii is the only U.S. state composed entirely of islands.

Hawaii consists of 137 islands, but only eight are considered the main islands. The largest island, Hawai’i (also known simply as the Big Island) is more than twice the size of all the other islands combined. Oahu, home to the capital city Honolulu, is the third-largest island.

2. The Hawaiian language has only 13 letters.

The Hawaiian alphabet includes five vowels (A, E, I, O, U) and eight consonants (H, K, L, M, N, P, W, and the ʻokina). The ʻokina, a glottal stop, acts as a letter in the language. Many place names in Hawaii include repetitive sounds, reflecting the language’s simplicity.

3. Hawaii has its own time zone with no daylight saving time.

Hawaii follows Hawaii-Aleutian Standard Time (HST), which is 10 hours behind Coordinated Universal Time (UTC-10). The state does not observe daylight saving time, so the time difference with the mainland changes throughout the year. In the winter, Hawaii is two hours behind the West Coast, but during the summer, it’s three hours.

4. Hawaii is the only state that grows coffee commercially.

While most states have to import their coffee, Hawaiians can enjoy it fresh from the source. The rich volcanic soil and ideal climate make Hawaii perfect for coffee farming. Kona coffee, grown on the Big Island, is famous worldwide for its smooth, rich flavor. Coffee farms can also be found on Maui, Oahu, and Kauai. The industry plays a significant role in the local economy, attracting many tourists. Living in Hawaii means you can enjoy fresh, locally grown coffee daily.

5. The islands of Hawaii are still growing.

The Hawaiian Islands were formed by volcanic activity, and this process continues today. Kīlauea, one of the world’s most active volcanoes, constantly adds new land to the Big Island. The island’s southeastern coast has seen significant changes in recent years due to lava flows. Volcanic activity also creates black sand beaches, which are unique to the area..

6. Hawaii was once an independent kingdom.

Before becoming a U.S. state, Hawaii was an independent kingdom with its own monarchy. King Kamehameha I united the islands in 1810, establishing the Kingdom of Hawaii. The monarchy lasted until 1893, when it was overthrown by American and European settlers. In 1898, Hawaii was annexed by the United States, and it became the 50th state in 1959.

7. Surfing was invented in Hawaii.

Surfing, a sport now enjoyed worldwide, originated in Hawaii. Ancient Hawaiians viewed surfing as more than a sport; it was a spiritual experience. The chiefs, or ali‘i, often competed in surfing, showcasing their strength and skill. Today, Hawaii remains a global surfing destination, with famous spots like Waimea Bay (near Pupukea) and the Banzai Pipeline. Living in Hawaii, you can embrace this sport’s deep cultural roots.

8. Hawaii is home to the world’s largest dormant volcano.

Mauna Kea, located on the Big Island, is the world’s largest dormant volcano. Standing over 13,800 feet above sea level, it is taller than Mount Everest when measured from its oceanic base. The summit often receives snowfall in winter, making it a unique spot in tropical Hawaii. The clear skies above Mauna Kea make it a prime location for astronomical observatories.

9. Hawaii has no snakes.

Due to strict laws and natural barriers, Hawaii remains snake-free. The state takes this seriously, as introducing snakes could harm the delicate ecosystem. The only snakes you might see are in zoos or brought illegally, with severe penalties for smuggling them.

10. Hawaii celebrates its own holidays.

Beyond the usual U.S. holidays, Hawaii celebrates several unique ones. King Kamehameha Day on June 11 honors the first king of the Hawaiian Islands. Prince Kuhio Day on March 26 commemorates the birth of Prince Jonah Kūhiō Kalanianaʻole, a Hawaiian royal. The Aloha Festivals, held annually in September, celebrate Hawaiian culture with parades, music, and hula.

11. Hawaii has the highest life expectancy in the United States.

Hawaii consistently ranks as the U.S. state with the highest life expectancy. The combination of a healthy diet, active lifestyle, and strong community ties contributes to this longevity. The state’s natural beauty and relaxed pace also reduce stress, promoting well-being. Residents often enjoy fresh seafood, tropical fruits, and outdoor activities year-round. Living in Hawaii seems to be a key to a long and healthy life.

12. Rainbows are a common sight in Hawaii.

Hawaii’s unique climate and topography create prime conditions for rainbows. The islands’ frequent rain showers and abundant sunshine result in vibrant rainbows, often visible across the sky. Double rainbows are also a regular occurrence, adding to the islands’ natural beauty. The state is also nicknamed the “Rainbow State” for this reason.

13. Hawaii has the most isolated population center on earth.

Hawaii lies over 2,000 miles from the nearest mainland, making it the most isolated population center on the planet. This remoteness creates a unique culture and lifestyle distinct from the rest of the U.S. Unfortunately, this isolation also affects the cost of living, as many goods must be imported. However, it also fosters a strong sense of community among residents.

14. Hawaii is home to the world’s most active volcano.

Kīlauea, located on the Big Island, is the world’s most active volcano. It has been erupting almost continuously since 1983, creating new land and reshaping the island’s landscape. The eruptions often draw visitors, eager to witness the molten lava flows. Despite the dangers, many people live nearby, drawn by the fertile land and stunning scenery.

15. Hawaii has a ban on billboards.

To preserve its natural beauty, Hawaii has banned billboards across the state. This law, enacted in 1927, ensures that the islands’ stunning landscapes remain unobstructed. Instead of advertisements, the scenery takes center stage as you travel through the islands. This absence of billboards contributes to the state’s peaceful, unspoiled atmosphere.

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Bilt has lost Hawaiian Airlines as a transfer partner, but is confident that the Alaska Airlines & Hawaiian merger will be approved (Bilt is a transfer partner of Alaska Airlines). Apparently this was the end of a three year deal that was signed and it didn’t make logistical sense to do a new deal.

That makes sense, although it’s slightly strange that no advanced notice was given.

Hat tip to @JTGenter/

Source: doctorofcredit.com

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Citi has filed a trademark for ‘Citi Strata Select’. Earlier this year Citi launched the Citi Strata Premier (rebrand of the Citi Premier) after filing trademarks for Citi Strata Premier & Citi Strata Elite. It’s unclear if the Citi Strata Select would be a completely new product or a rebrand of an existing card.


The most likely option would be that this is a rebrand of the Citi Rewards+ card. This is backed up by this reddit post from a month ago citing the Select name and stating that the Rewards+ needs to be refreshed before the launch (I would have thought they would do both at the same time). The rewards+ card offers the following:

  • Get 10% Points Back when you redeem, up to the first 100,000 points redeemed per year
  • No annual fee
  • Card earns ThankYou points:
    • Earn 2x points on grocery and gas, up to $6,000 per year, then 1x
    • Earn 1x points on everything else
  • Round up feature which rounds up the amount of points earned to the nearest 10.
  • Bonus ThankYou Points are not available if you have received a new account bonus for a Citi Rewards+ account in the past 48 months.
  • Low intro rate on purchases and balance transfers
  • 3% foreign transaction fee

Hat tip to Proud Money

Source: doctorofcredit.com

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Rising costs tighten margins for business owners. And to make up for that increased pressure, businesses usually have to raise prices — which, when it’s done month after month, can start to wear on customers.

Customers are facing “price increase fatigue,” says Kirk Jackisch, president of consulting firm Iris Pricing Solutions. “They’re done. They can’t take it anymore — just across-the-board price increases. So you have to look at more surgical solutions.”

Targeting price increases carefully and communicating them clearly can help ease the pain customers feel, Jackisch says. Here’s how you can go about it — and what you need to avoid as legislators across the U.S. focus on fees and surcharges.

Balance price increases with new deals

Matthew Heaggans is co-owner of Preston’s: A Burger Joint, a restaurant in Columbus, Ohio. When sambal, an ingredient they used in a signature sauce, more than doubled in price, Preston’s began buying chili peppers to make their own — but then those tripled in price, too.

In light of such rising costs, Heaggans says Preston’s raised prices by about 7% on average. But that doesn’t mean they’ve raised every price by 7%.

For example, while a burger might be more expensive than it used to be, sides are now cheaper when you buy them as part of a combo.

“People are driven very significantly in our market by price,” Heaggans says, so it’s essential that Preston’s keeps prices competitive.

If you’re concerned about the long-term impact of price increases, you can opt to adjust them temporarily to account for cost shocks. For example, as egg prices spiked in 2023, some restaurants temporarily increased the prices of dishes containing eggs. Shipping companies have long adjusted their fuel surcharges as gas prices rise and fall.

Fortunately, for all of the “agonizing” he put into price changes, Heaggans says customers didn’t mind.

“My constant plea to consumers is that if you really, really like a thing, you should support it or it’s going to go away,” Heaggans says.

Don’t inflate your fees to avoid raising sticker prices

Customers often feel duped by last-minute or opaque fees — and regulators are taking aim at them, too.

At the federal level, the Biden administration has announced plans to crack down on junk fees on everything from event ticketing to college textbooks. And as of July 1, California has banned “drip pricing,” or advertising a price that doesn’t include mandatory additional fees and surcharges.

California’s law is designed to target last-minute, high-cost service fees on products and services like concert tickets and hotel rooms, says David W. Wright, an attorney at Pillsbury Winthrop Shaw Pittman LLP in Los Angeles.

The law is “not necessarily preventing businesses from trying to recoup those costs, but instead trying to make it so that businesses disclose those costs up front so consumers know what they’re getting themselves into,” Wright says.

Under California’s rule, handling fees have to be listed as part of the advertised price. “Reasonable” shipping fees and taxes, however, do not.

“The safest way to protect yourself is to include all prices” within the sticker price, Wright says.

Other states limit pricing practices in additional ways. For instance, some companies pass credit card charges onto customers to offset their payment processing costs. But several states restrict the practice. For example, New York requires you to include these fees in the posted price but allows you to charge a lower price for customers paying cash. And Colorado caps credit card surcharges at 2%.

Offer customers fee-free alternatives when possible

Jackisch also recommends increasing prices in ways that focus on the customers who cost the most to serve — like those that request rush jobs or ask for last-minute changes.

For example, if your company typically delivers orders in four weeks and a customer requests a two-week turnaround, you might apply a rush charge. After all, your business will have to absorb the costs of disrupting your normal operations to meet that customer’s needs.

Most customers see fees tacked onto their bills as “punitive,” Jackisch says. The key is to make sure there’s a way to avoid those fees and explain what it is.

The fee-free alternative in this case? For the customer to wait the typical four weeks.

Salespeople should be able to explain that when it comes to customer requests, “we’re happy to do it. But just recognize that there’s a cost to us, and we’re passing some of that along to you,” Jackisch says. “That communicates the value and the fairness of the fee.”

Source: nerdwallet.com

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Oklahoma City, or OKC as the locals call it, is a city full of surprises. Known for its welcoming community, diverse job market, and rich cultural offerings, it’s no wonder the city has seen a surge in new residents. But moving here isn’t without its challenges. From unpredictable weather to a fast-paced housing market, there are a few things you need to know before making the move.  Not sure if The 405 is for you? Read on to find out what to expect if you’re considering a move to the Oklahoma City area in 2024.

You know it from: Thunderstruck, Twister, Musical Drama

Average 1 bedroom rent: $1,035 | OKC apartments for rent, OKC houses for rent

Average home price: $646,000 | OKC homes for sale

Average cost of full-service moving services: $147/hr for 2 movers

Average cost to rent a moving truck: $19 – $39/day

Top industries: Aviation, Biotechnology, Energy

Move here for: The people, low rent, and excellent BBQ

Be sure to bring: A raincoat and a good weather app

1. The weather is as unpredictable as it gets

Oklahoma City weather is a rollercoaster. Summers are scorching with temperatures often exceeding 100°F, while winters can surprise with sudden ice storms. Severe thunderstorms and tornadoes are part of life here, especially in the spring. Be prepared for seasons that sometimes seem to change within a single day.

Moving Tip: You’ll get accustomed to keeping a close eye on the weather but investing in a good weather app is a must. 

2. Cost of living is affordable, but housing moves fast

Oklahoma City is one of the more affordable metro areas in the U.S., with a cost of living nearly 15% below the national average. However, the housing market is hot. Homes and apartments often get snapped up quickly, especially in popular neighborhoods like Nichols Hills and Paseo. For renters and buyers alike, it’s crucial to act fast if you find something you love.

3. The job market is diverse and growing

The job market in OKC is booming, especially in sectors like energy, aerospace, and healthcare. Tinker Air Force Base is one of the largest employers, providing thousands of jobs. With a relatively low unemployment rate, the city offers plenty of opportunities for career growth. However, some industries are more competitive than others, so it’s essential to research before making the move.

4. Bricktown is the entertainment hub

Bricktown is the heart of Oklahoma City’s nightlife and entertainment. From catching a minor league baseball game at Chickasaw Bricktown Ballpark to enjoying live music along the canal, there’s always something happening. The area is also home to some of the city’s best restaurants and bars, making it a go-to spot for both locals and visitors. Just be ready for the crowds, especially on weekends.

5. Traffic is surprisingly manageable

For a city of its size, Oklahoma City’s traffic is relatively mild compared to other major metros. The city’s grid layout and wide streets help keep things moving. While rush hour can slow you down, it’s nothing compared to places like Dallas or Houston. Interstate 35 can get congested during peak times, but overall, getting around is a breeze.

6. Parks and outdoor spaces are everywhere

Oklahoma City is home to over 170 parks, offering plenty of green space for recreation. The 17-acre Myriad Botanical Gardens in downtown is a favorite for both relaxation and events. For those who enjoy water activities, Lake Hefner is a hotspot for sailing, fishing, and picnicking. The city’s commitment to expanding its park system is evident, making it a great place for outdoor enthusiasts.

7. A growing food scene with local flair

Oklahoma City’s food scene is on the rise, with an emphasis on local and farm-to-table options. Whether you’re craving barbecue, Tex-Mex, or something more eclectic, the city has you covered. The Plaza District and Midtown are popular dining destinations, offering a mix of trendy eateries and established favorites. Don’t leave without trying a fried onion burger, a local specialty.

8. Public transportation is improving but still car-dependent

While the city has made strides in public transportation with the EMBARK bus system and the downtown streetcar, OKC is still largely car-dependent. Most residents rely on their vehicles to get around, as public transit options are limited in coverage and frequency.

Moving Tip: If you plan to live here, having a car will make life much easier, especially outside of the downtown area.

9. The arts and culture scene is underrated

Oklahoma City’s arts and culture scene is diverse and growing. The Oklahoma City Museum of Art houses an impressive collection, including a stunning exhibit of Dale Chihuly glass. The Paseo Arts District is a vibrant community of galleries, studios, and festivals. The city’s Western heritage is celebrated at the National Cowboy & Western Heritage Museum, a must-visit for history buffs.

10. Sports are a big deal

Oklahomans are passionate about their sports, and Oklahoma City is no exception. The city is home to the NBA’s Oklahoma City Thunder, and game nights at the Paycom Center are electric. College football is another major draw, with fans loyally supporting the University of Oklahoma and Oklahoma State University. Whether you’re a die-hard fan or a casual observer, sports culture is hard to miss here.

11. Tornado preparedness is a way of life

Living in OKC means accepting the reality of tornadoes. The city is located in Tornado Alley, and severe weather is most common from April to June. Residents take tornado preparedness seriously, with many homes equipped with storm shelters. Local news stations provide excellent weather coverage, ensuring you’re informed and ready to take action if needed.

12. The city is spread out

Oklahoma City is one of the largest cities in the U.S. by land area, meaning it’s spread out and often feels suburban. While this gives residents plenty of space, it also means that getting from one part of the city to another can take time. Neighborhoods like Edmond and Yukon are technically part of the metro area but can feel like separate towns due to the distance.

13. A tight-knit community with a small-town feel

Despite its size, OKC has a close-knit community vibe. The city’s residents are known for their friendliness and hospitality. Whether you’re at a neighborhood event or grabbing a coffee at a local shop, you’re likely to strike up a conversation with a stranger. This sense of community makes the city feel more like a small town, which can be a refreshing change from larger urban centers.

14. Oklahoma City loves its festivals

From the Oklahoma State Fair to the Festival of the Arts, there’s no shortage of events in Oklahoma City. The city’s festival calendar is packed year-round, celebrating everything from food and music to arts and culture. The annual Red Earth Festival is a standout, showcasing Native American art and traditions. These events are a great way to experience the local culture and meet new people.

15. Rapid development and growth

Oklahoma City is growing rapidly, with new developments popping up all over the metro area. The downtown area has seen significant revitalization, with new apartments, offices, and attractions being built. This growth brings excitement but also challenges, such as increased traffic and rising housing costs. Staying informed about new projects and changes in the city will help you navigate the evolving landscape.

Methodology: Average rent prices sourced from Rent.com August 2024. Home prices sourced from Redfin August 2024. Average moving costs sourced from MoveBuddha. Employment data sourced from Greater Oklahoma City Chamber.

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Key insights 💡

  • There is no such thing as no-deposit car insurance. All insurers require payment before activating coverage.

  • You can lower your initial payment by taking advantage of discounts, only purchasing coverage you need and comparing rates to find the cheapest insurance company for you. 

  • Your first car insurance payment can be as low as $29, according to NerdWallet’s August 2024 analysis of minimum coverage rates from the country’s largest insurers.

  • A car insurance “deposit” counts toward your total premium. It’s not an additional fee.

Car insurance with no deposit doesn’t exist. Legitimate insurers require some money down before they’ll provide coverage. The good news is that an auto policy’s initial “deposit” isn’t a separate fee, but the first payment you’ll make towards buying and maintaining your coverage.

Most auto insurers will let you either pay in monthly increments or in full for the entire policy period, which is typically six months or a year. If you’re looking for the lowest possible payment to start your auto insurance coverage, the cheapest option will likely be to pay only your first month’s premium payment.

Even though you’ll have to put some money down to get car insurance, your initial payment doesn’t have to be astronomical. Read more to learn how to find cheap car insurance with a low initial payment.

How to find car insurance with a very cheap “deposit”

Just because a policy requires a payment upfront doesn’t necessarily mean you’re overpaying for your auto insurance coverage. Still, there are ways to make sure you are paying as little as possible in that first transaction.

Here’s how to lower your first car insurance payment.

Shop around. Your “deposit” will likely just be your first premium payment, so look for the lowest possible premium. The best way to do that is to compare car insurance quotes from at least three insurers. Not sure where to start? Take a look at NerdWallet’s list of the cheapest car insurance companies.

Ask about discounts. You may be surprised by the variety of discounts some insurers offer, so be sure to ask your insurer or agent for any discounts you might qualify for. You could get a lower price for making electronic payments, being a good student, insuring multiple vehicles or even driving a low amount of miles.

Only get the coverage you need. Look over your policy and drop any coverage you don’t really need. For example, if you drive an older car that’s not worth much, you likely don’t need comprehensive and collision coverage, which only cover your vehicle up to its current market value, minus your deductible.

Lower your deductible. If you have enough of a cushion in your emergency savings, you can choose a higher car insurance deductible. Although this would require you to pay more out-of-pocket before your insurance pays for a covered claim, your monthly premium would decrease.

Pay month-to-month. Most insurers give the option to pay for coverage in full or monthly installments. If you want to lower the initial cost for your coverage, pay month-to-month.

🤓Nerdy Tip

Keep in mind, paying for the full six or twelve months of coverage can end up being cheaper in the long run if your insurer offers a pay-in-full discount.

How much does a car insurance initial payment cost?

The initial payment for a car insurance policy can be as low as your monthly policy rate, and can vary based on the overall cost of your policy and the payment plan you agree upon with your insurer.

Cheapest car insurance “deposits” for minimum coverage

Below are the five cheapest large insurers for minimum coverage, according to NerdWallet’s August 2024 analysis, along with their median annual and monthly rates.

*USAA is only available to military, veterans and their families.

Cheapest car insurance “deposits” for full coverage

Below are the five cheapest large insurers for full coverage, according to NerdWallet’s August 2024 analysis, along with their median annual and monthly rates.

*USAA is only available to military, veterans and their families.

Cheap coverage could leave you underinsured

When you’re shopping for a policy with a very low monthly payment, keep in mind that it may offer very limited coverage.

The absolute cheapest policies will provide only the minimum-required coverage in your state, which typically only includes a limited amount of liability insurance. This pays for damage and injuries you may cause to others in an accident, up to your policy limits. But it won’t cover things like damage to your car or for your own injuries if you’re hit by an uninsured or underinsured driver. In most cases, your state’s minimum required limits are probably not enough to protect you financially in the event of a serious accident.

Before you buy the cheapest car insurance you can find, make sure you’re getting enough coverage to protect you financially. Unsure of what the different types of car insurance are? Use our tool below to learn about what each type pays for.

Source: nerdwallet.com