Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Written by Rachael Brennan
Licensed Agent for 15 Years Rachael Brennan

Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Jun 21, 2022

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Key takeaways...

  • You must purchase a minimum amount of car insurance to drive legally in most states.
  • There are various steps you can take to reduce the cost of your insurance.
  • You may be able to set up a payment plan for your premium.

Car insurance premiums can be expensive, but you must maintain active coverage on your vehicle in order to comply with driving laws in most states. If money is tight and you have discovered that your premium is no longer affordable for your budget, you may be wondering what steps you can take to obtain inexpensive coverage that complies with insurance laws in your state.

While it can be stressful to be in a tight financial situation, there are a few options available to most drivers that can help you to pay for your coverage more easily. For the best results, combine several or all of these money-savings tips for maximum benefit.

Read on to learn more about low-income auto insurance and make sure to compare the best rates with our free insurance comparison tool above today! 

Look for Insurance for Low-Income Drivers

In a few states, drivers who have a low level of income may qualify for special insurance programs or benefits. For example, if you meet specific requirements in California, you may benefit from having a cap placed on your premium amount. New Jersey has a similar program, and Hawaii offers free liability and personal injury coverage to qualifying individuals.

If you live in other states or if you do not qualify for these programs, there are still affordable coverage options available.

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Get the Best Deal Possible on Your Coverage

Your current auto premium may have adjusted to an uncomfortably high amount, or you may be shopping for new coverage and not like the quote you received from one insurer. The good news is that all car insurance providers have a different method for calculating rates for their customers.

For example, some providers rely more heavily on credit scores, and others rely more heavily on your driving history. With this in mind, one of the best steps you can take to save money on car insurance is to shop around for savings.

Request multiple online quotes from reputable providers to determine who has the lowest rates for your unique factors.

While cost is understandably an important factor when buying insurance, you can also pay attention to the reputation and financial strength of the provider to make the best buying decision.

Take Advantage of Discounts

Once you get several auto insurance quotes in hand, you may want to contact each of the providers directly to inquire about discounts they offer. In some cases, you may qualify for discounts immediately. In other cases, you can take easy steps to qualify for savings, such as by taking a driver’s safety course. Some of the more common auto insurance discounts available include:

  • Low mileage discounts
  • Safe driver or driver’s safety course discounts
  • Multiple vehicles or multiple drivers discounts
  • Bundled policies discounts
  • Senior or student discounts
  • Discounts for safety or security features in the vehicle

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Adjust Your Deductible

While you are speaking to your top providers about discounts you may qualify for, it is also wise to request separate quotes for a higher deductible if you want to save money on your car insurance premium. The deductible is the amount you pay each time you file a claim, and a higher deductible can yield a lower premium.

This is a convenient way to save money, but you should not request a deductible that is more expensive than what you can afford to pay if you need to file a claim.

The standard auto insurance deductible is $500. However, you may be able to request quotes for a $750 to $1,000 deductible. This is a convenient way to enjoy immediate savings on your premium.

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Find a More Affordable Car to Insure

Some vehicles are more expensive to insure than others. For example, vehicles that are statistically stolen more often, that have a more powerful engine, or that have a higher repair or replacement cost are more expensive to insure.

If funds allow, it may be worthwhile to trade your current vehicle in for a model that is more affordable to insure. Your insurance agent can provide you with quotes on several models that you are interested in so that you can compare costs before making your buying decision. You can also use the Internet to research models that are more affordable to insure before you start shopping for a new car.

Set Up a Payment Plan

Some providers require you to prepay by the premium by six or 12 months. You may qualify for a discount by doing so with some providers. Paying the full premium amount in a lump sum can be unaffordable for many people’s budgets, and you may be looking for a better way to pay the premium for your coverage.

In most cases, you can request a monthly or quarterly payment plan from your car insurance provider. Some providers may charge a service or convenience fee if you opt for a payment plan. However, remember that setting up your monthly payments on an auto draft schedule may qualify you for a discount on your premium.

Opt for the Minimum Coverage Available

Another idea to consider if you need to dramatically reduce the cost of your premium is to purchase the minimum amount of coverage possible. Some drivers are in a tight financial situation, and they simply need coverage so that they can drive legally. Most states require a minimum amount of liability insurance, and purchasing this minimum level of coverage can create very affordable premiums in most cases.

However, remember that a liability insurance policy only pays for the expenses of another party if you cause an accident, such as another person’s vehicle repairs and medical bills. This type of coverage will not provide you with any compensation for repairs or a replacement of your own damaged vehicle. Therefore, many drivers prefer to purchase collision or comprehensive coverage as well.

You can adjust the coverage limits on each type of insurance as desired to have greater control over your premium amount. Your insurance agent may be able to provide you with several quotes for different coverage levels so that you can purchase the maximum amount of coverage available for a premium that is affordable for your budget.

Driving without insurance is illegal in most areas, and the penalties for doing so can be severe and expensive. A better idea is to follow these tips to set up an affordable insurance policy for your needs. It may be helpful to tell your agent or representative what your budget is so that he or she can help you to set up coverage that is affordable to you.

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