Typically, your income is not a factor in determining your auto insurance rate. In fact, some states prohibit insurance companies from collecting income information. But in reality, low income individuals and families can have challenges paying steep car insurance rates and, therefore, staying out of trouble with the law.
But there are some things you can do to decrease the rate you pay for car insurance, regardless of your income. Let’s take a look at a few ways you might be able to save some money on car insurance.
State-Sponsored Car Insurance
A few states have taken to offering government-sponsored auto insurance to their citizens in order to help low-income people and families afford the state’s required car insurance. As of this writing, those states are:
- New Jersey
While these programs generally offer only the most minimal coverage, it is enough to keep you legal and also provide at least a little bit of protection in case something happens.
Other Ways to Save on Car Insurance
In addition, here are some other suggestions you can use to try to get those monthly premiums down.
Set higher deductibles
One way to bring down the amount of your monthly premium payment is to raise your deductibles. The deductible is the amount you have to pay before your insurance policy kicks in. Be careful though. If you choose to do this, make sure you can afford the amount of your deductible. If you can’t get your car fixed because you can’t afford the deductible, you could make things worse for yourself.
Reduce your coverage
Another way you can reduce your monthly premiums is by reducing the amounts on your optional coverages. If your vehicle is older, you might even think about dropping collision and comprehensive coverage and instead put the extra money into a new car fund. You could use the 10% rule: when the annual premium for your car insurance exceeds 10% of the car’s value, drop it. You’re never going to get that money back.
Choose your cars carefully
Some cars are more expensive to insure than others. Newer cars will cost more, so if you can drive an older model you will definitely see some savings. Also, if you own more than one car, see if you can reduce the number of vehicles you own to bring the premiums down.
The most important thing you can do to save money on car insurance is to shop around for the best rate. In fact, you should make it a yearly exercise. Every year you should do a quick online search and see if you can save a little money on your insurance rates.
When you’re ready to shop around, the InsuranceWins form is a great place to start. Simply fill out the form and you’ll be able to start comparing quotes from major carriers who are ready to help you afford car insurance.