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What to Do If You Can’t Afford Car Insurance

For most Americans, going carless is unthinkable. You need one to buy groceries, take kids to school, visit a doctor’s office and see friends and family from time to time. Unless you have a very good friend willing to serve as your chauffeur, living without a car doesn’t work.

A handful of cities defy the rule – New York, Washington, Chicago, Boston – because they have public transit that is plentiful and convenient. Ditching a car in those cities makes sense.

However, for everyone else, not having a car is a special kind of hell. Even folks who scrape together enough to buy one are grounded if they can’t afford the insurance bill.

There are, however, options for people who can’t afford their car insurance. Insurance providers offer a slew of discounts ranging from safe driver to low mileage deductions. Offers will vary, which is why it is important not to settle for the first provider you come across.

One thing that’s certain is that driving without auto insurance is illegal in every state (minus New Hampshire). There’s a reason for that: People are frequently injured in car crashes, sometimes seriously, and insurance is necessary to pay the bills and safeguard assets.

Most states require basic liability insurance to operate a vehicle. Many also call for uninsured motorists’ coverage to compensate for injuries when one of the drivers in a crash lacks insurance. Some demand personal injury protection, a form of no-fault accident insurance that covers medical costs and even time off work.

Auto insurance also can cover theft and non-collision damage, depending on a policy’s terms. Rates vary according to other factors including a driver’s age, driving history, how the insured vehicle is used and where the driver lives.

Once you have an insurance policy, it is important not to let it lapse. Always pay the premiums on time. You might consider keeping a separate savings account for vital expenses that include insurance. Only use the account to pay essential bills, and keep it funded.

What Happens If You Don’t Pay Your Car Insurance

If you’re thinking about driving without insurance, don’t. You’ll lose your license and face penalties if you’re pulled over, and the consequences of an accident while driving illegally could be devastating.

Nothing good comes from cruising the streets in an uninsured vehicle. About 6 million car accidents occur every year in the U.S, costing the country a total of $230.6 billion a year, or $820 a person.

The only reason people ditch their car insurance is to try and save money, but the consequences of driving uninsured will cost you more in the long run.

Auto Insurance Cancellation

Before insurance is cancelled, there is sometimes a grace period in which you can still make a payment without coverage lapsing. That isn’t always the case with auto insurance, and even if your insurer does have a grace period, it is often much shorter than other types of insurance. Despite the term “grace” period, you may need to pay late fees in addition to your regular payment to regain coverage.

If your insurance is cancelled for failure to pay, word gets around and your rates for a new policy might go up. If you are leasing, the lender may impose force-placed insurance. This is a policy meant to protect the lenders assets—not you, or any of your belongings. It is the most basic coverage at a premium rate. In other words, you will pay more for less coverage.

Driving Without Insurance Legal Penalties

If you’re caught driving without insurance, your license could be suspended, and you’ll be fined or jailed.

The severity of consequences varies by state. Fines are usually a few hundred dollars but grow larger after each offense. After the second or third offense, many states will strike you with thousands of dollars in fines.

Americans pay an average of $80 a month for car insurance, in 2019. Driving uninsured is literally not worth the risk.

Here are some other consequences of driving without insurance:

  • Anywhere from a few weeks up to a year in jail
  • Suspension of license plate and registration
  • Points on your license
  • Vehicle may be impounded
  • License Reinstatement fees

How to Get Cheaper Car Insurance

You can’t expect car insurance providers to automatically apply all of the discounts and adjustments you may be eligible for to your policy. They simply don’t have the time for all that. But you do, because it will save you money.

Here are a few methods you can implement to lower your car insurance bill.

1. Compare Rates

Call your insurance provider and prepare to haggle. Leverage the price of your policy against the prices of your provider’s competitors.

Never settle for the sticker price. Shop around and ask about safe-driver rates. Car insurance rates vary, so get several quotes before you decide on a policy.

2. Consider Collision Insurance

Collision coverage varies. If you have a brand-new car, you’ll probably want to protect your investment even if you bought it with your own cash. But what if you don’t have a car loan and your car is 15 years old? You should check its book value online. If the car is only worth a few hundred dollars, carrying collision insurance probably doesn’t make sense.

3. Deductibles

Ask about deductibles. The deductible is what you pay out of pocket for a repair before the insurance money kicks in. If you’re able to afford a $1,000 repair on your own, then consider a $1,000 deductible instead of a $500 one. It will lower your rates, sometimes considerably.

4. Discounts

Always ask about discounts. If you haven’t had an accident or even a ticket in years, you might get a better rate. If you are a student and have good grades, that is worth a discount. In some cases, taking a safe-drivers course can also lower what you pay.

Bundling your car insurance with other forms of insurance – home, health, life, etc. – can be a cost saving.

Here is a list of other possible car insurance discounts.

  • Low mileage
  • Multi-line coverage
  • Multiple vehicle coverage
  • Automated payments
  • Being claims free

Bottom Line

Car insurance policies are not set in stone. If you took under 20 minutes shopping for coverage, chances are you’re paying more than you need to. You may even be paying for stuff you don’t need. For instance, you may not need a comprehensive personal injury policy if you have medical insurance through work. You might be better off just buying the required minimum.

If a car is an essential where you live and you don’t have a large enough income for insurance, take a hard look at your spending and cut unnecessary expenses. Do you have cable TV? Could you do without it? Cable bills often run well over $100 a month. Consider cutting the cable. Look at other expenses. Could you save money by turning up the air conditioner in the summer or turning down the heat in the winter? Do you eat out or buy prepared food? You could save cooking from scratch at home.

Saving money from any of those – or some combination – could be enough to meet a monthly insurance premium.

Another way to pare expenses would be to come up with a monthly budget and stick to it. If you don’t have experience making a household budget, find a nonprofit credit counseling service online. They offer free advice on how to build a budget as well as tips for managing your money so you can afford needs like car insurance.

Bents Dulcio writes with a humble, field-level view on personal finance. He learned how to cut financial corners while acquiring a B.S. degree in Political Science at Florida State University. Bents has experience with student loans, affordable housing, budgeting to include an auto loan and other personal finance matters that greet all Millennials when they graduate. He has a prodigious appetite for reading, which he helps feed with writing from Scottish philosopher Adam Smith, the “Father of Capitalism.” Bents writing also has been published by JPMorgan Chase, TheSimpleDollar and

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