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When you live on a tight budget with limited income, you understandably keep a close eye on all of your expenses. Your goal may be to eliminate unnecessary expenses and to trim your budget down to a manageable level.
Car insurance is a necessity for most drivers, and you may be wondering if there are low-income car insurance options available or if you even need to buy coverage at all.
Save as much money as possible by finding the insurance company that offers you the lowest price on the coverage you need. Enter your zip code into our free quote tool above to begin comparing.
Why You Need to Buy Auto Insurance
If you are a safe driver who rarely gets in accidents or if you only drive your vehicle infrequently, you may have thought about canceling your coverage altogether to save money.
You may have also thought about canceling coverage if your vehicle is old and has a very low replacement value. While canceling your car insurance coverage is one option to consider, it is not advisable for several reasons.
– The Legal Requirement
Most states have financial responsibility laws that make drivers legally liable for any damages they cause to others while driving.
To ensure that drivers have the financial means to pay for the damages they cause, most states require drivers to purchase a minimum level of auto insurance coverage.
In many locations, the penalty for not being properly insured at all times may range from fines to the loss of your vehicle’s registration or your driver’s license.
– The Impact on Personal Finances
Drivers must pay a regular premium amount to keep their car insurance policy active, and this premium can be a stressful burden on your budget if you have a low level of income. However, the expenses associated with not being properly insured can be unbearable.
In addition to the possible legal fines and the liability expenses if you damage someone else’s property, you also may need to repair your own vehicle after an accident. Car insurance can also replace your vehicle if it is stolen.
Many low-income individuals rely heavily on their vehicle as a source of affordable transportation.
You may need a car to get to work each day, to pick the kids up from school, and to complete other important tasks.
You may have to pay for other forms of transportation to accomplish these goals if you do not have access to an insured vehicle at all times, and these transportation options can be expensive.
Drivers can save $859/yr* by comparing car insurance
*based on a survey of 1,000 car insurance customers
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How to Set Up an Affordable Car Insurance Policy
Now that you understand how important it is to have insurance on your vehicle at all times, you may be wondering what options are available to purchase coverage that is suitable for a low-income driver.
There are many money-saving ideas that you can follow to reduce the cost of your premium while still enjoying the benefits that coverage can provide.
– Choose Coverage Amounts Carefully
The most affordable coverage type available is liability insurance, and this is the coverage that is most commonly required by law. Some auto lenders require drivers to obtain collision or comprehensive insurance, and this can make your policy more expensive.
Choosing higher coverage limits can also increase insurance costs.
Learn more about the coverage types and minimum coverage levels that are required by your state and auto lender. Consider getting a quote for this minimum level of coverage. If your budget allows, you can add other coverage types to the policy for added benefit.
– Select a Higher Deductible
Drivers can opt for a higher or lower deductible amount at their discretion.
While a $500 deductible is common, a higher deductible up to $1,000 can create a more affordable premium. The deductible must be paid each time you file a claim against your policy, so always ensure that the deductible is affordable for your budget.
– Pay Your Premium in Full
You can save money on your premium with most insurance providers if you pay your premium in full. This payment can be challenging for individuals with low income, but remember that you can choose different term lengths.
Paying the premium on a three-month policy is much more affordable than paying the premium for a 12-month policy. If you must set up monthly payments, set up automated payments to qualify for a potential saving opportunity.
– Focus on Other Budget-Minded Ideas
These are excellent tips that can help you to set up a more affordable insurance policy, but they are not the only options available.
You can combine the above tips with other money-saving ideas to save even more money on your auto insurance policy. These additional tips to save money on car insurance include:
- Get a vehicle that is more affordable to insure
- Move to a zip code with more affordable insurance rates
- Improve your driving record
- Increase your credit score
How to Find Money-Saving Auto Insurance Discounts
Insurance companies understand that drivers want to set up an affordable policy, and they are aware that low-income drivers often need to set up affordable coverage as a necessity.
Some auto insurance companies offer numerous discounts to help you save money on your car insurance policy. The discounts as well as the requirements to qualify for the discounts vary, but these are among the more prevalent discounts available for car insurance today:
- A retiree or senior citizen discount
- A military or veteran discount
- A good student discount
- A good driver discount
- A safety equipment discount for features in your vehicle
- A low mileage discount
You can easily compare discounts online when you are shopping around for rates to find the providers who may offer the best combination of discounts to you.
Use the Internet to Search for the Lowest Car Insurance Rates Available
Low-income drivers understandably want to find the best deal on car insurance, and one of the easiest options available is to use the Internet to request and compare insurance quotes online.
Remember to request similar quotes from each provider so that you can easily locate the best deal possible.
While cost is important when buying a low-income car insurance policy, focus your attention on the financial strength and reputation of the providers to finalize your buying decision.
Enter your zip code into our free rate comparison tool below to get started finding car insurance that can save you money.