Consequences of Not Having Car Insurance

One of the worst things you can do to save money is not pay for car insurance.  Whether you are a new college graduate with thousands of dollars in school loans to repay for your college education or just a frugal person who likes to avoid unnecessary expenses at all costs- having no car insurance is definitely not a good way to save money on your monthly budget.

Car Insurance After College

While it's important for drivers of all age to have car insurance, and in all 50 states, the law- there is a tendancy for college students and new graduates to try and skip paying for car insurance to help reduce their monthly expenses.  The reason for this is usually because of the excessive debt these young adults are coming into the "real" world with- from credit card debt to having to pay rent for the first time, as well as student loan payments, medical insurance and other living expenses- students believe that once they graduate they'll get a "real" job and be able to afford all of their expenses.  Unfortunately, students often forget to budget for things like car insurance and medical expenses, and so they try to cut corners by avoiding car insurance altogether.

Why are college students bogged down by so much debt?  It doesn't help that credit card companies are setting up kiosks on college campuses, and giving away items like free pizza and t-shirts if the students fill out credit card applications!  In addition to credit card debt, many students are graduating from college with $10,000 to $55,000 in student loans to deal with- is it any wonder they're trying to skimp on living expenses by having no car insurance?!

Consequences of Not Having Car Insurance

The Insurance Information institute informs that the cost of driving a car without car insurance (and getting caught) will vary from one state to the next, and depends mostly upon the estimated number of uninsured drivers in the state.  In Massachusetts, residents are charged between $500 and $5000 in fines and are put in jail for one-year when they're found to be driving without car insurance.  Some states, including Louisiana, New Jersey, Florida and Connecticut will impound vehicles from drivers who are driving a car without at least the state required minimum car insurance plans.  Getting a vehicle out from impoundment costs thousands of dollars!

Do you still think you can't afford to get car insurance?  You can't afford NOT to have car insurance!

Budgeting for Car Insurance

Now that you understand that it is far more expensive to NOT have car insurance than it is to find a way to pay for it, how can you budget for the expense of having car insurance?  When shopping around for car insurance, check to see if you can get either a 6 month or 12 month payment plan to make it easier to budget your car insurance payments.  Also ask what type of discounts the company offers- some will give discounts for students or alumni, some provide discounts for safety features on the car you drive, and others will give discounts for having multiple lines of insurance and great driving records.