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What do I do if I can't afford full coverage car insurance for my financed vehicle?

I got laid off recently, and I can't afford to make payments on my full-coverage insurance. What’s going to happen to my financed vehicle if I drop full coverage?

avatar
Carol Chung · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Unfortunately, if you can't afford the lender-required
car insurance
 for your financed vehicle, you’ll face one of two major consequences:
  • Mandatory coverage: Your lender will get
    force-placed insurance
     for your vehicle and add the payments to your total financing costs. You may find it more convenient to pay your car loan and insurance in a single monthly payment—but forced-place insurance is almost always more expensive than standard
    car insurance
    , so you'll save by maintaining your own policy.
  • Vehicle repossession: Your lender may declare that you’ve breached the terms of your
    car loan
     by failing to maintain
    full-coverage insurance
    . That would give them legal grounds to repossess your car.
Before you give up on your financed car's coverage requirements, consider
shopping around for a new car insurance company
 with more affordable rates. You can compare quotes on your own or use a comparison app like
Jerry
 to instantly find the best offers on the coverage you need.
MORE:
Do you need full coverage insurance for a financed car?
Car InsuranceFull Coverage InsuranceCar Financing
View full answer 
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