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Those with a limited income sometimes need to make hard decisions about which bills to pay. To help make that choice, you need to know what happens when you don’t pay your car insurance.

The outcomes of missing your car insurance payments are not good. This article explains why you need auto insurance, what happens if you can’t afford your car insurance bill, and tips for reducing your premiums.

If you have trouble paying your car insurance bill, you should try everything you can to reduce premiums. The first step towards a lower premium is shopping around and comparing companies. We have reviewed the best car insurance companies and provide an easy-to-use quote comparison tool. You can also give us a call at (844) 246-8209 to get free, personalized quotes seven days a week.

Why You Can Trust Motor1 At Motor1, we are dedicated to supplying car owners with the well-researched, fact-checked information they need to make sound decisions about auto insurance. Our team analyzes provider offerings and customer insights so you can feel empowered to make the best choice.
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Why Do You Need Auto Insurance?

Most states have minimum basic car insurance requirements. Breaking these laws can result in major consequences. Only two states do not have insurance requirements: Virginia and New Hampshire. However, even in Virginia and New Hampshire, you can be sued for an accident that you cause.

In addition to the fact that it’s the law, there are other good reasons to have car insurance. If you are at fault in a collision, you are vulnerable to a legal suit to pay for damages to the other person’s car and physical health. If you have a liability insurance policy, this would cover damages up to your policy limits.

Finally, car insurance is a way to protect your vehicle if you are unable to afford costly repairs out of pocket. If you need your car to commute to work, no car is not an option. Insurance ensures you can afford to replace or repair your vehicle should it go out of commission. Full coverage auto insurance is required to fully protect your vehicle. This means collision and comprehensive coverage, which both pay to repair your own vehicle.

It is important to factor your annual or semi-annual premiums into your monthly expenses. You should certainly prioritize paying your auto insurance bill as the long-term consequences of failing to do so can be steep.

What Happens If You Don’t Pay Your Car Insurance?

The penalties for not carrying insurance are different in every state, but mostly likely you will face fines, a suspended license, and even possible jail time. And these aren’t the only bad things that can happen if you don’t pay your car insurance.

When you fail to make a car insurance payment, your insurer will probably contact you. It may be possible to make a late payment, but this will likely come with a penalty, possibly a premium increase. You will also not be covered while your policy is unpaid, so a missed payment could be used as an excuse to deny coverage.

If you miss your payment due date and your insurer cancels your account, it could be turned over to a collections agency.

If your car is leased, your loan terms likely stipulate the vehicle is protected by a certain amount of insurance coverage. If that coverage is dropped, your vehicle may be repossessed. Chances are that you have a certain number of days to find new coverage before this happens. Details would be described in your lease agreement.

After you are dropped from an auto insurance policy for failure to pay, it becomes harder to find coverage again. You may not be eligible for coverage with your original provider, and the lapse in coverage will be noted on your record. This can mean increased premiums wherever you shop for car insurance, making it even harder to afford your next car insurance bill.

What Should You Do If You Miss A Payment?

If you miss a payment, you may have a 10- to 20-day window before your policy is cancelled, though you will likely incur late payment fees. A grace period is not guaranteed. Reach out to your insurance carrier to learn what happens if you don’t pay your car insurance bill. In any case, you should make efforts to pay your bill as soon as possible.

If you simply do not have the money to make the payment, you are in a tough spot, but there are a couple options to consider.

Reach Out To Local Charities

Some areas have local charities designed to help low-income families pay their bills. Often these are affiliated with churches. Reach out to the people you know in your community and ask for help.

Sell Things

If you have any items you don’t strictly need, consider selling them. A lapse in coverage or getting caught driving without insurance can be an insurmountable financial setback. Especially if you have a leased vehicle, you do not want to have your coverage dropped. If there is anything you can sell now to pay for your policy, it will probably be worth it.

If there is nothing you can do to make your payment, at least try not to drive your car. You should consider yourself uninsured as soon as your payment is late, and the penalties for driving without insurance are steep. If you get into an accident without auto insurance, the consequences are even worse.

What Are Some Tips For Reducing Auto Premiums?

It can be hard to find cheap auto insurance, especially for those who can least afford to pay high auto insurance rates. Neighborhood and credit score are used to assess premiums, and these factors often work against the people who are most likely to require financial assistance.

If you can’t afford your car insurance bill, you’re certainly interested in lowering your premiums. Here are several tips that anyone can follow to get lower car insurance rates. Also try reading our article about finding cheap car insurance with no deposit.

Ask For A Higher Deductible

Policies with high deductibles are generally cheaper. However, keep in mind that you need to pay your deductible before your insurance company will pay for repairs. If you can’t afford your auto insurance bills however, a high deductible may be your only option.

Switch Providers

Look into insurance quotes from other providers. Some may be willing to cover you for a lower rate. The best time to shop for new rates is after major life events, such as after getting married or having a baby. After moving to a new state is also a good time to explore your provider options.

Ask About Discounts

Almost every insurer offers some type of discounts. Common discounts include:

Ask your provider which discounts it offers and see if you are eligible.

Defensive Driving

Check with your provider to see if you are eligible for a premium reduction if you complete a defensive driving course. Many states have online defensive driving courses that you can take at your own pace to suit your schedule.

Reduce Your Coverage

While it is a good idea to have full coverage auto insurance, it is not legally required in most states. If you can’t afford your car insurance bill, you can reduce your coverage to as low as the minimum state requirements.

Our Recommendations For Car Insurance

If your auto insurance is too expensive, consider switching providers. Different providers offer different rates and discounts, and you won’t know which is best for you until you compare quotes for auto insurance. Start by entering your zip code into our quote comparison tool or call (844) 246-8209 to get free, personalized quotes.

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Also consider learning more about two of our top recommended providers, Geico and Progressive.

#1 Geico: Best Overall

Geico is our highest-rated provider that is available to everyone. We give it 4.6 out of 5.0 stars because of high customer satisfaction scores and low average premiums. Geico is the second-largest insurance corporation in the U.S. It has an AM Best financial strength rating of A++ and a Better Business Bureau rating of A+.

Geico offers the following discounts:

  • Good student discount
  • Defensive driver discount
  • Discounts for airbags, anti-lock brakes, and anti-theft devices
  • Federal employee discount
  • Military discount
  • Good driver discount
  • Multiple policy discount
  • Multiple vehicle discount

Consider a Geico auto insurance policy if you think one or more discounts may apply to you. While prices will vary by customer and region, U.S. News & World Report found that the average Geico annual premium is $1,168.

To learn more, read our full Geico review.

#2 Progressive: Best For High-Risk Drivers

We also rate Progressive at 4.6 stars out of 5.0. While it scored a little lower than Geico in the J.D. Power 2021 U.S. Auto Claims Satisfaction StudySM, it still received relatively high marks and was rated sixth in the Northwest and North Central regions.

Depending on the discounts for which you are eligible, a Progressive policy may be less expensive. We think Progressive car insurance is a particularly good option for high-risk drivers, which is the company’s original specialization.

Discounts offered by Progressive include:

  • Good student discount
  • Multiple vehicle discount
  • Multiple policy discount
  • Anti-theft device discount
  • Homeowner discount
  • Continuous coverage discount

To learn more, read our full Progressive insurance review.

FAQ: Can’t Afford Auto Insurance


In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.

  • Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
  • Availability: We consider availability by state as well as exclusions for specific groups of drivers.
  • Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
  • Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
  • Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
  • Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.