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Between rising gas and car-repair prices, its an expensive time to be a driver. And car insurance is no exception. But even though you can’t change things like a lack of workers or problems in the supply chain, you can lower your insurance bill.
Read on to learn what to do if your car insurance costs are too high and how to lower your costs.
Getting behind the wheel without car insurance is illegal in most states. But when money is tight, paying those monthly premiums can feel like an impossible expense.
If you’ve found yourself wondering “what if I can’t afford car insurance right now?”, know there are still smart options to stay legal on the road even on a limited budget.
I’ve been there myself when funds were low starting out By getting creative and maximizing discounts, you can keep driving insured. Here are 8 tips to make car insurance affordable when money is tight
1. Look for Discounts with Your Current Insurer
Most car insurance companies offer a range of discounts you may qualify for to lower your premiums. Reach out to your insurer and ask about available discounts – you could save a surprising amount each month!
Some common car insurance discounts to look for if eligible include:
- Multi-policy discount for bundling home or renters insurance
- Good student discount for young drivers with high GPAs
- Defensive driver discount for completing an approved course
- Low mileage discount for driving fewer than a set number of miles per year
Even if each discount slices only 5-10% off your bill, combining several can lead to significant savings. Every dollar counts when trying to afford car insurance.
2. Shop Around and Compare Quotes
Don’t just accept the quote from your current insurer – shop around and compare rates from at least 5 insurers. Rates can vary widely for the exact same coverage.
Using insurance comparison sites makes this easy to compare a range of quotes side-by-side in minutes. I found a 40% savings this way – it pays to shop around!
Look at both large national insurers and local insurance providers. Check if you qualify for any group, affinity or alumni discounts through organizations you belong to as well. Cast a wide net for the lowest car insurance rates possible.
3. Opt for Lower Coverage Limits
Dropping your coverage limits down to just the minimum legally required in your state is an option to cut costs substantially. For example:
- Lower property damage liability limits from $100,000 to $25,000
- Reduce collision and comprehensive deductibles from $500 to $1,000
- Raise uninsured motorist coverage limits from $50,000 per person to $15,000
Just bear in mind lower limits mean you pay more out-of-pocket for any claim damages that exceed them. But it can make an unaffordable policy suddenly within reach.
4. Drop Optional Coverages
Look at trimming any non-mandatory add-on coverages to pare back your premiums. For instance:
- Eliminate roadside assistance coverage
- Remove rental reimbursement coverage
- Drop Mechanical Breakdown Insurance add-ons
While nice-to-have, eliminating these optional policies can potentially chop 10-15% or more off your car insurance bill.
5. Pay Annually vs. Monthly
Many insurers charge extra fees and interest for paying monthly rather than annual lump sums. Paying the entire 6-month or 12-month premium upfront saves you money over time.
Even if that means temporarily carrying a bit of balance on a low-interest credit card, the interest is likely less than the insurer fees – and it lets you afford the lump payment.
6. Increase Your Deductible
Opting for higher deductibles like $750, $1,000 or even $2,500 can substantially reduce your base car insurance premiums. Just be prepared to pay that deductible amount out-of-pocket if you do file a claim.
For drivers who tend to go many years between claims, a higher deductible paired with lower premiums can make insurance much more affordable.
7. Limit Miles Driven
Insurers offer significant discounts for low mileage drivers because they present lower risk. Cutting your yearly mileage can not only trigger discounts but also reduce wear-and-tear and save on gas costs.
Telecommuting for work, carpooling, consolidating trips, and using public transportation when possible are all ways to slash miles driven and save money across the board.
8. See If You Qualify for State Programs
Many states offer special low-cost or even free auto insurance programs for qualifying lower-income households. These state-run plans act as an insurer of last resort if no coverage is available elsewhere.
California, New York, New Jersey and other states offer these programs with strict eligibility requirements. Check if your state has an option as a last resort if needed.
Don’t Risk It – Find Legal Minimum Coverage
Driving without insurance isn’t worth the huge legal risks. You’ll face hefty fines, license suspension and vehicle impoundment if caught uninsured. Not to mention you’re on the hook for potentially bankrupting accident costs.
Explore every discount, adjustment and state program possible to make some type of basic liability car insurance fit your tight budget. Even bare bones coverage with low limits and high deductibles is far better than nothing at all!
Prioritizing car insurance along with other essential expenses like food and housing is crucial – even just liability coverage provides vital protection for your finances and legal right to drive. With a mix of the strategies above, you can keep your car legally insured even when funds are low.
Additional Ways to Save Money Each Month
Finding room in your budget for car insurance premiums can be tough. Here are a few extra tips for reducing other costs so you can afford essential insurance:
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Cut the cable cord – Shift to cheaper streaming plans to save $75+ per month over cable.
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DIY repairs and maintenance – Change your own oil, swap a dead car battery yourself, etc. to save on mechanic charges.
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Renegotiate recurring bills – Call providers to ask about cheaper plans for cell phone service, gym memberships, subscriptions, etc.
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Stop eating out – Avoid takeout and limit restaurant meals to just special occasions. Home cooking saves a bundle.
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Buy generics – Opt for generic drug and grocery brands rather than pricier name brands.
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Live with roommates – Split costs on rent, utilities and Wi-Fi by adding roommates even if just temporarily.
With some sacrifice and creativity, you can find room for affordable car insurance in even the tightest budget. Don’t risk driving uninsured – be smart and maximize discounts, adjustments and savings on other costs as needed.
The Bottom Line
Paying for car insurance when money is extremely tight can seem impossible. But with the right discounts, policy tweaks, state programs and budgeting tactics, you can keep your vehicle insured even on a very limited income.
Prioritize finding the money, even if it means lifestyle sacrifices like added roommates, no cable, and cooking at home. It’s far less painful than uninsured driver fines and penalties down the road.
With some persistence and creativity, you can find a way to afford minimum legal auto insurance coverage no matter your financial situation. Drive safely and legally!
Contact your insurance company
Call your insurance company or agent right away if you know you can’t pay a bill that’s coming due. Ethan Warren, managing director at Goosehead Insurance Agency, wrote in an email, “You may be able to put it off or have it rolled into other payments.” “It is always better to be proactive than reactive,” Warren said.
If you forget to make a payment, most insurance companies give you a grace period where you can still pay without having to worry about having your policy canceled. You should call your insurance company right away to find out how much time you have. Grace periods are different for each state and company.
Try these options
While dropping your insurance shouldn’t be an option, there are other ways to save money on your car insurance. Here are some of the most effective.
DO THIS IF YOU CAN’T AFFORD YOUR CAR PAYMENTS ANYMORE! MARK UP VICTIMS ARE REPO’ING!
FAQ
What happens if you don t have enough money to pay car insurance?
What to do if nobody will insure your car?
Is it OK not to buy car insurance?
Is it bad to not pay car insurance?
What if I can’t afford car insurance?
If you can’t afford car insurance for the month, talk to your insurance company right away. Often, the insurer will give you a 30-day grace period before canceling your policy. If you have a lapse in coverage, insurance will be even more expensive.
What if I don’t need auto insurance?
Instead of going without auto insurance, if you don’t need to drive your car, consider putting your car in long-term storage and reducing your current coverage to just comprehensive coverage.
Can I get cheap car insurance if I can’t afford it?
A small handful of states also offer cheap auto insurance to residents who otherwise cannot afford a car insurance policy — you may qualify for one of those programs if your household is below a certain income level. In this article: What happens if I don’t pay my car insurance premiums?
Can you afford car insurance if rates are too high?
When you need car insurance but can’t afford it because rates are too high, there are ways to find more affordable options. MoneyGeek listed some key strategies below to help lower the cost of auto coverage. The first few measures — comparing quotes and changing coverage limits — are quick and easy to do.