Auto Insurance for Low-Income Drivers

Posted July 6th, 2015 by Ashley Kane

There’s nothing cheap about owning a car. Between the upkeep of repairs, required maintenance like inspections and oil changes, the fluctuating cost of gas, and car insurance, it’s pretty incredible that there are 1.3 individuals for every vehicle in the United States, the highest vehicle-to-person ratio in the world.

While vehicles are often both a necessity and a want, they do eat up a big chunk of a paycheck.  So what about low-income drivers? How is one supposed to afford the rising cost of auto insurance on top of so many other car expenses?

Fast, Free Auto Insurance Quotes

First off, good for you for recognizing that you need car insurance. Just about all states require some degree of auto insurance but that doesn’t mean everyone finds coverage. In fact, it’s estimated that nearly 13% of drivers go uninsured, risking hefty fines and a whole mess of other consequences

Car insurance offers protection for drivers in many forms, insuring you not just for your own driving but also for all the other drivers on the road. Many individuals consider themselves great drivers and often ask, “Why should I pay for something that I don’t need when money is tight?” The bottom line is that everyone does need it because not only do accidents happen for a billion possible coincidental reasons, but it’s not just your driving at stake, it’s the thousands of other drivers on the road that may make errors. 


Low-Income Drivers Can Save:

Where Are You Living?

map of the united statesLocation has an influential role in determining auto insurance rates. Based on who lives around you, whether it's an affluent ZIP code or not, a city or suburb, risk-heavy or safe area – all determine your rates. You should also be keenly aware of price optimization as unfortunately, low-income drivers are sometimes specifically targeted.  

A few states have specific programs that offer auto insurance aid for low-income drivers. These include California’s Low Cost Automobile Insurance Program, New Jersey’s Special Automobile Insurance Policy, and Hawaii’s Low Cost Disability Auto Insurance Program. All three of these programs require applications and have eligibility requirements. Maryland offers a guaranteed coverage program that operates a bit differently, guaranteeing coverage for drivers who may have been denied at other insurance companies. Other states are also currently considering adding similar programs.


What’s Your Deductible At?

If necessary, you can always consider raising your deductible so that you can pay less monthly for car insurance. This carries inherent risk, as you’ll have to pay more upfront for accident damages before your insurance policy steps in. However, this can be a good last resort option if you’re a careful driver and need to lower your premium to make ends meet.

That said it’s also important to be sure you are budgeting correctly before you decide to change your deductible. If you think you can’t afford the insurance premium but are paying for all sorts of extras in your life, consider refinancing. Make a list of what you consider necessities and what you consider extras. Sometimes, getting a second opinion can be helpful. Forgoing cable and subscriptions or eating out less in exchange for car insurance is well worth it. Remember, raising your deductible means more money will have to come out of your pocket immediately. Also, look into minimum coverage options so that you aren’t paying for coverage that you don’t need.


Ask, and Ask Againpurple question mark

There are so many car insurance discounts out there and you likely qualify for at least some of them. Ask your agent about all possible discounts. Be sure to tell them some information about yourself because even organizations or alumni associations can help you save. If your car has an anti-theft device or you’re married, then there are even more premium reductions available to you.


Check Out Your Options

Shop around. Get multiple quotes from different auto insurance providers and compare. They can vary by hundreds of dollars so you might as well check them all to find the most affordable option for you.


Trade-In Your Car

Depending on how attached you are to your vehicle, you might want to consider selling or trading in your car. Of course, you should only do this after a bit of research. Some cars cost a lot more to insure than others, so it can save a lot to switch to a vehicle that is less costly to insure. Selling a car and buying another does require a bit of time and can be a hassle so be sure find out whether the payoff will be worth it. Get quotes for the vehicle you’d be switching to before purchasing.

Cars are necessities for many people commuting far distances to work and in daily life. Unfortunately, they are more often seen as a choice, resulting in little aid to help out with the costly expenses of obtaining auto insurance. There are useful programs out there for low-income drivers and many tips to utilize so that you aren’t paying more than you have to for car insurance. Remember to keep researching and to always keep your options open.

Photo credit (top image): GotCredit, FreeStockPhotos (2) (3), Pixabay

Photo credit (in-line): Wikimedia