I have a friend who just immigrated to the USA and just got a driver's license for the first time (he's never had a driver's license before, either in his previous country or in the USA). Now that he's looking around for auto insurance, he's finding that all companies are asking him to pay some money up front. He is quite unfamiliar with insurance and obtaining it and there is a bit of a language barrier. He tells me that this up-front money is a registration fee that the insurance companies are requiring (except for one quote which he told me the up-front money was a down payment). I don't know whether he's misunderstanding what the money is actually for or if he is actually being required to pay a registration fee. A registration fee sounds like a scam to me.
- Are registration fees for first-time drivers common for auto insurance policies?
- If these are indeed down payments being required by the insurance companies, how does that work? Are down payments applied toward the remainder of payments for the policy term? (The amount of down payments he's being quoted are in excess of a single month's worth of premium.)
He's living in NJ, if that's important.