I Can’t Afford $1,800 Car Insurance – What Are My Options as a New Driver in NY?

Many cash-strapped Americans may be at risk of severely underestimating the costs associated with owning and maintaining a vehicle over time. Undoubtedly, owning a car grants you a degree of freedom that’s unmatched. However, Americans will be paying for that freedom, and its value, I believe, is questionable, especially in an era where it’s all too convenient to catch a ride on an Uber or Lyft.

Not to mention it’s also worry-free, given there’s no need to worry about parking, navigation, and, of course, that dreaded traffic too and from one’s destination. It’s not just more convenient to go down the path of a ride-hailing service, though.

In many instances, it’s also the more financially responsible choice, especially for young, new drivers who’ve already taken a hit to the chin with the car purchase (or financing), driving lessons, licensing fees, and all the sort. With limited experience also comes a hefty insurance bill that may make owning a car a move that sets one back significantly.

In this piece, we’ll check in on a posting I came across on Reddit, asking what one’s options were as a new driver in New York City. Indeed, that’s not only an expensive city, but one that can be pretty frustrating to drive in, given the bumper-to-bumper traffic. 

What’s one to do as a new driver in NYC?

Driving in the Big Apple is about as tough as it gets, especially for those with limited experience. Add the priciness of the city (which also applies to car insurance) into the equation, and the big question that someone in our Reddit user’s shoes, I think, should be whether or not it still makes sense to drive or if it’s a smarter move to take an Uber or even catch a cab. Indeed, there’s no shortage of taxis in New York City.

Indeed, a $1,800 per month sum for insurance, I think, just does not make sense, especially for a young urban professional who’s just getting started in their career. While owning a car is a must for some who desire a certain lifestyle, I do think that foregoing vehicle ownership is the financially wise decision for the long term, even if one can continue to afford the hefty parking fees and absurdly high car insurance rates. 

Personally, I’d sell the car as soon as possible and look into a ride-hailing subscription (think Uber One) to drive costs of getting around NYC even more affordable. Of course, ditching the vehicle isn’t going to be everyone’s cup of tea, especially for those who’ve inherited a vehicle. Additionally, New York City has some of the best public transit in the world. Catching a ride on the subway, walking, or even skateboarding may not align with everyone’s lifestyle. However, I do think that the considerable savings and added steps to one’s day make forgoing the car the strongest option.

What about for those who simply must drive?

For such folks who just have to drive (maybe there’s a baby who’s in need of a car seat), I’d suggest shopping around for car insurance rates because, to put it frankly, $1,800 per month doesn’t make much sense, in my view.

That’s not only expensive; it’s an obscene amount that I could amount to more than a car’s value in less than two years! If a young driver has a track record of incidents (I have no idea if this is the reason the rate is so high), perhaps there is no other way to trim that bill than to take the hit to the chin and build a track record of safe driving over the years. 

In any case, this young driver should re-evaluate the true costs of car ownership and ask themselves if it’s getting in the way of their long-term financial goals. NYC is a tough place to drive, and with such high insurance rates, I think the opportunity costs of owning the vehicle are just way too high.

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