How to Get Help Paying Your Car Insurance

As the cost of living rises, it's tougher to stretch a budget these days. If you rely on a car to get to work, managing auto insurance premiums might be a growing concern. 

So, what can you do if you're struggling to pay your car insurance? 

Why you shouldn’t cancel your car insurance policy 

If you're struggling with your budget, canceling your car insurance might seem like a quick fix — but it’s important to keep your coverage active if you plan to drive. Letting your policy lapse or falling behind on payments can lead to serious consequences that affect your finances and future insurance options. 

Why is having no car insurance bad? 

Every state in the U.S. requires drivers to have auto insurance. Driving without it can lead to hefty fines, suspension of your license and registration, and even jail time in some states. Being caught as an uninsured driver can also result in higher, high-risk rates when you try to get a new policy. 

If you’re involved in an accident without insurance, the situation could get even worse. Even if you’re not at fault, you might be held personally responsible for damages, leaving you vulnerable to lawsuits and financial strain. 

Plus, future insurance providers may see you as a risk, making it harder to get affordable coverage. 

Is being late on payments a better alternative? 

Falling behind on premium payments isn’t a good option either. Late payments can lead to even higher rates, with some insurers doubling what you pay. Your provider may also report late payments to credit bureaus, which could hurt your credit score. 

In a worst-case scenario, your policy could lapse entirely, putting you at risk of losing your vehicle if you’re leasing or financing it. 

The best move is to explore ways to lower your premium or seek temporary assistance to keep your policy active — this will protect both your finances and peace of mind. 

5 ways to get help paying your car insurance 

Now that we’ve stressed the importance of keeping your auto coverage up to date, what do you do when making car insurance payments is a hardship? Here are some steps you can take: 

• Call your insurance company 
• Make cuts in your budget 
• Look for an emergency short-term loan 
• Use a credit card 
• Borrow from friends/family 

1. Call your insurance company 

Your car insurance policy provider can be a wealth of solutions to help you keep your car insurance current. They may be able to offer discounts or see if you qualify for a financial hardship program. They may even recommend something as simple as switching from bi-annual to monthly payments to spread out the premium cost in smaller amounts. 

Enlist the help of your insurance company as soon as you realize your budget is getting overwhelmed. 

2. Make cuts in your budget 

A good budget is flexible and can be adjusted when necessary. You should be able to quickly identify non-essential expenses you can reduce or cut entirely, like dining out, entertainment, coffee shops, hobbies, and online/streaming services. By eliminating extra “wants,” you’ll free up money to cover the “need” of paying for car insurance. 

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3. Look for an emergency short-term loan 

There are multiple options for borrowing money in a pinch: 

• Installment Loans can help cover bills, including your car insurance. Just be sure to have a repayment strategy built into your budget so you aren’t borrowing more than you can afford to repay. 
• A Cash Advance could give you the money you need between paychecks, allowing you to keep your auto coverage current. 
• Opening a Line of Credit could be another solution when you need help paying car insurance. Similar to a credit card, you borrow money as needed up to your credit limit and only pay interest on the amount you borrow. This flexible can come in handy if you experience a future financial hiccup that jeopardizes your insurance payments. 

At Advance America, we work with borrowers of all credit types to find an emergency loan option suited to your unique situation. Our loan application process is quick and easy — and you could receive your money the same day you’re approved. 

4. Use a credit card 

In a pinch, you could pay car insurance with a credit card to avoid losing coverage. Of course, this option does mean you have to make credit card payments along with all your other bills, and you’ll pay interest. But the interest amount is often far less than what you risk by making late payments or having no car insurance. 

5. Borrow from friends/family 

This is a situation to handle with careful consideration. Borrowing money from friends or family can complicate and even ruin relationships. But if both parties can draw up an agreement with clear terms that satisfy everyone involved, a loan from a friend or relative could help you keep your auto insurance current. 

MORE ON GETTING HELP PAYING BILLS 

• Get Help Paying Your Electric Bill
• Get Help Paying Your Utility Bill
• Get Help Paying Rent
• Emergency Money for Paying Bills

7 tips to lower your car insurance 

1. Raise your deductible 

One of the easiest ways to lower your car insurance payment is by raising the deductible you’ll pay if you get into an accident. But it still needs to be a reasonable deductible you’ll be able to pay, should you need to. An agent at your insurance company can help you determine the deductible amount that’s right for you. 

2. Reduce your coverage 

Another easy way to save on your auto insurance is to make smart decisions about your coverage. If your vehicle is older, dropping collision or comprehensive coverage might make sense based on your car’s actual value. 

Consider opting for the minimum liability coverage required by your state or dropping extras like windshield replacement, roadside assistance, and rental reimbursement. Again, speak with an agent to make sure you’re saving money, but still financially protected by your policy. 

3. Take a defensive driving course 

Taking a few hours to complete a defensive driving course could lower your car insurance premiums because it shows your insurance company that you’re committed to being a safe driver. 

4. Compare insurance companies 

Auto insurance is a competitive industry, and many companies offer discounts for bundling policies, good driving records, or low annual mileage. It's worth checking with multiple insurers to find the best rate. You don’t need to switch insurers to improve your rates; simply letting your current insurer know a competitor offers a lower rate may persuade them to lower yours. 

5. Explore state insurance programs 

Some states offer low-cost insurance programs for low-income individuals (like California’s Low-Cost Auto Insurance program). Check if your state has a similar program. 

6. Improve your credit score 

Your credit affects the rate you’ll receive from an insurance provider — the higher your score, the better rate the provider will offer. Take steps to improve your credit and ask your provider to review your policy and factor in your new, boosted credit score. 

7. Change your vehicle 

Did you know the kind of vehicle you insure affects how much you’ll pay for insurance? High repair and replacement costs, poor safety ratings, and high claim statistics drive up premiums. Alternative fuel systems, good safety ratings, and anti-theft technology can lower them. If you’re currently driving a make/model that typically has high insurance rates, consider trading it in for one that will get a lower rate.