Lenders require full coverage as a condition of the auto loan. Dropping to liability-only voids your loan agreement, and the lender may force-place coverage — called lender-placed or collateral protection insurance — on your behalf, typically at two to three times the cost of a standard policy. The options available for financed vehicles are: telematics enrollment, payment plans, shopping for competing quotes and raising the deductible within the lender's allowed range.
What to Do If You Can't Afford Car Insurance
Updated: March 26, 2026
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Key Takeaways
Liability-only car insurance costs as little as $522 per year with GEICO — switching to the minimum required coverage is the fastest way to reduce your premium.
Six options exist for drivers who can't afford standard coverage: state minimum coverage, payment plans, telematics discounts, state assistance programs, raising your deductible and removing optional coverages.
Driving without insurance carries fines of $150 to $5,000 depending on state, plus license suspension. Every option on this page costs less than getting caught uninsured.
How to Get Car Insurance if You Can't Afford It
If car insurance is stretching your budget, these six options can lower your premium: switching coverage levels, enrolling in telematics, setting up a payment plan, raising your deductible, shopping for competing quotes or applying to a state assistance program.
- 1Switch to Liability-Only Coverage
Drop comprehensive and collision and keep only the state-required minimum. This is the single fastest way to reduce your premium, making car insurance more affordable. The difference between full coverage and liability-only is typically $600 to $900 per year for adult drivers with good credit and a clean record. If your vehicle has a loan or lease, your lender requires full coverage; this isn't optional. See how much you can save when switching car insurance companies with our guide for the cheapest liability car insurance.
- 2Enroll in a Telematics Program
Snapshot (Progressive), Drive Safe & Save (State Farm) and Drivewise (Allstate) telematics programs can reduce premiums by 10% to 30% for safe drivers. Enrollment is free. The risk: poor driving scores can increase your rate rather than lower it. Drivers with consistent daytime driving and no hard-braking events benefit most.
- 3Ask Your Insurer About a Payment Plan
Most major insurers — State Farm, GEICO, Progressive — allow monthly payments instead of a lump sum due every six months or annually. Monthly plans often carry a small fee ($3 to $10) but prevent a high upfront cost from becoming a barrier. Ask your insurer whether spreading payments into monthly installments reduces your immediate out-of-pocket obligation.
- 4Raise Your Deductible
Increasing your deductible from $500 to $1,000 reduces your comprehensive and collision premiums. This only applies if you're keeping full coverage due to a loan or lease. The trade-off: you pay more out of pocket if you file a claim. Don't raise your deductible higher than you could comfortably pay in an emergency.
- 5Shop Competing Quotes Before Your Next Renewal
Rate differences between insurers for identical coverage can exceed $500 per year. GEICO and Travelers are consistently among the cheapest car insurance companies for most adults, but the lowest rate depends on your state and driver profile. Get at least three quotes before renewal. Use MoneyGeek to compare car insurance options side by side.
- 6Check Whether You Qualify for a State Assistance Program
California's Low Cost Automobile Insurance Program (CLCA) offers liability-only coverage to income-eligible drivers for as little as $244 per year. Eligibility is based on income, driving record and vehicle value. Most other states do not have a formal low-income auto insurance program — if you're outside California, focus on the other five options above.
If You Have a Loan or Lease, You Have Fewer Options
FORCE-PLACED INSURANCE COSTS MORE THAN YOUR CURRENT POLICY
If you drop coverage on a financed vehicle and the lender discovers it, they'll buy a policy on your behalf and add it to your loan balance at a higher rate than you'd pay directly. The lender's policy protects them, not you.
Cheapest State Minimum and Full Coverage Rates by Company
You can get cheap car insurance for state minimum coverage starting at $43 monthly from GEICO, and for full coverage if required by your lender, from Travelers ($97 monthly) and GEICO ($98 monthly). Find the cheapest car insurance for you below. We provided the lowest rates under $100 for liability-only, liability plus comprehensive and collision (full coverage).
Data filtered by:
State Minimum Liability Only
| Geico | $43 | $522 | 4.56 |
| Travelers | $50 | $601 | 4.68 |
| National General | $50 | $605 | 4.34 |
| State Farm | $51 | $616 | 4.45 |
| Amica | $56 | $670 | 4.57 |
| Chubb | $61 | $728 | 4.4 |
| Kemper | $62 | $744 | 3.95 |
| Progressive | $67 | $802 | 4.52 |
| AAA | $69 | $822 | 4.16 |
| Nationwide | $71 | $852 | 4.27 |
| Farmers | $78 | $938 | 4.31 |
| Allstate | $81 | $971 | 4.13 |
| AIG | $81 | $972 | 4 |
What You Give Up Dropping Full Coverage
State minimum liability-only coverage protects other drivers — it doesn't cover damage to your own vehicle. Before dropping to minimum coverage, understand what you're giving up.
Your Vehicle Damage Isn't Covered
Liability-only coverage pays for damage you cause to other vehicles and property. If your car is damaged in an accident — even one that isn't your fault and the other driver is uninsured — you pay for repairs yourself.
Theft and Weather Damage Aren't Covered
Comprehensive coverage pays for theft, hail, flood and fire. Without it, any non-collision event that damages your vehicle comes out of your pocket.
State Minimums Often Fall Short in Serious Accidents
Most state minimum liability limits are $25,000 per person for bodily injury, well below the cost of a serious injury claim. If you cause an accident that exceeds your limit, the difference is your personal liability.
What Happens If You Get Caught Driving Without Insurance?
Every option listed above costs less than getting caught driving uninsured. First-offense fines run $150 to $5,000 depending on state, and penalties don't stop there: expect license suspension, vehicle impoundment and SR-22 filing requirements that raise your insurance premiums for three years after reinstatement. If you cause an at-fault accident without insurance, you're personally liable for medical bills and property damage with no policy limit to protect you.
SR-22 ADDS COST EVEN AFTER REINSTATEMENT
Getting caught without insurance often requires filing an SR-22 certificate — proof of insurance filed with your state DMV. Most insurers charge $15 to $25 to file it, and the SR-22 requirement raises your premium for three years. The most cost-effective path through an SR-22 period is maintaining continuous coverage — any lapse restarts the clock.
Can't Afford Car Insurance: FAQ
What Is the Cheapest Legal Car Insurance?
The cheapest legal car insurance is liability-only coverage at state minimum limits. Based on current data, GEICO offers the lowest average annual premium at approximately $522 per year for an adult male driver with good credit and a clean record. Rates vary by state and individual profile, and some states have lower minimums than others. California residents with qualifying income may also be eligible for the state's Low Cost Automobile Insurance Program (CLCA), which can be cheaper still.
Can I Pause My Car Insurance if I Can't Afford It?
Some insurers allow a policy suspension if the vehicle is being stored and not driven — typically requiring proof that the car is off the road and not registered for active use. A full suspension still means you must reinstate before driving. Contact your insurer directly to ask; not all companies offer this option, and eligibility requirements vary.
What Happens if My Insurance Lapses Because I Can't Pay?
Most insurers provide a grace period of 10 to 30 days after a missed payment before cancellation. After cancellation, reinstating may require a new application — and any gap in coverage is typically treated as a higher risk factor, which can raise your next premium. Even a short lapse can make it harder to qualify for preferred rates.
Does California Have a Low-Income Car Insurance Program?
Yes. California's Low Cost Automobile Insurance Program (CLCA) provides liability-only coverage to income-eligible drivers. To qualify, drivers must meet income limits (currently up to 250% of the federal poverty level), hold a valid California driver's license, have a clean driving record and own a vehicle valued at $25,000 or less. Coverage starts as low as $244 per year. Most other states do not have an equivalent program.
Will a Telematics Program Always Lower My Rate?
No. Programs like Progressive's Snapshot monitor driving behaviors including speed, hard braking and the time of day you drive. Drivers who speed, brake aggressively or drive frequently late at night may see their rate increase rather than decrease. An initial participation discount at enrollment doesn't guarantee a lower renewal rate — the final adjustment depends on the data collected during the monitoring period.
If I Can't Afford Car Insurance, Can I Drive Someone Else's Insured Car?
In most cases, a vehicle owner's policy extends to permissive users — people the owner has given permission to drive the car. Relying on someone else's insurance as a long-term substitute for your own policy isn't advisable. If you're a regular or primary driver of the vehicle, you may not qualify as a permissive user under that policy's terms, and the owner's rates could be affected by any claims you generate.
MoneyGeek's cheapest liability-only floor figure is derived from our dataset of over 2.4 million auto insurance quotes, using the adult male, good credit, clean record, state minimum coverage baseline. State program figures (CLCA) are sourced from official program pages. For full details, see our rate comparison methodology.
Rate data is updated regularly from the most recent available data date in the database. State program eligibility thresholds are reviewed periodically against official program publications.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. He has analyzed the insurance market for over five years, conducting original research for insurance shoppers. His insights have been featured in CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.