Detroit residents have saved $54,922 in parking fines through a half-off discount program, but there’s a catch: to qualify, their vehicles have to be registered in the city.

The requirement, for some, highlights Detroiters’ long-running frustrations about unaffordable auto insurance rates that have prompted some to register vehicles in communities outside the city limits or forgo insurance altogether.

Arlyssa Heard, a community leader with education advocacy group 482Forward, said Detroit’s highest-in-the-country auto insurance rates force residents to either go without insurance or register their vehicles with an address outside the city. Heard told BridgeDetroit that she dropped her own auto insurance after paying $683 per month to cover her 2008 Lexus.

Related: New Michigan auto insurance: savings for most, but Detroit still pays more

“It’s pushing people to be criminals,” Heard said. “Let’s keep it real. You need a car. We don’t have transportation services that take everybody everywhere … Then you’ve got the impact of not having car insurance. You’re taking a chance and riding dirty and you’re crossing your fingers and praying to God every day that you don’t get stopped or pulled over.”

Heard said she’s in the process of obtaining insurance from a new nonprofit that doesn’t factor credit scores or other non-driving factors into its rates.

“It’s not that people want to drive without insurance, they can’t afford it,” she said.

BridgeDetroit heard similar stories from residents across the city who attended a series of summer town halls co-hosted with Detroit is Different. Gina Jennings, a resident of District 5, was among those who noted that the unaffordable costs continue to drive some residents to have their car insured using addresses outside of Detroit.

“The rates are still pretty high if you’re using the 48208 (ZIP code),” Jennings said in June. “We cannot use our addresses (for auto insurance) in this community. The rates are extremely high.”

Launched in 2019, the city’s parking ticket discount program was meant to help low-income families visit downtown Detroit to access city offices, meetings and services without fear of racking up expensive fines.

Before Detroit filed for bankruptcy, parking tickets were $20 and anyone cited could get a $10 discount if the fines were paid within 10 days. That discount however was eliminated and fines were increased to $45 in 2014 under the direction of former Emergency Manager, Kevyn Orr.

The resident discount program was created through an ordinance amendment co-sponsored by City Council President Mary Sheffield. Kayla Rice, manager of communications for Sheffield’s office, said that the registration requirement was requested by the city’s Municipal Parking Department to ensure those who opt into the program are actual Detroit residents. 

“From our vantage point, we’ve heard from residents that paying parking tickets is now more financially feasible and they are less likely to experience restrictions such as booting,” Rice said in an email. “Access to information is important and necessary for residents to know what city programs are available to them, especially low-income residents who are looking to lessen any financial restrictions and burdens upon them.”

There were 6,713 Detroit license plates registered in the Detroit Discount program at the start of September, according to data provided by the Municipal Parking Department. Detroiters saved $11,430 through the program this year. Those savings are about half of what residents saved in 2021 and lower than the $17,145 saved in 2020. Detroiters saved $3,667 in parking fines in the first year of the program. 

To receive the discount, residents must sign up with the city online and have their vehicles registered to a Detroit address with the Michigan Secretary of State. The reduced fine only applies if drivers have one unpaid ticket and if they pay the fine within five days. The ordinance allows a 50% discount on $45 parking fines for two types of citations – expired meters and no parking violations.

Auto insurance ‘not feasible’

Data consistently shows Detroit residents pay far more for auto insurance than people living in other parts of Michigan. 

The average cost of car insurance in Michigan in 2022 is $2,639 per year, according to a report from The Zebra, an insurance research group. Detroiters pay even more – an average of $5,102, according to the analysis, which found auto insurance rates for the city are the most expensive in America. 

Detroit Mayor Mike Duggan long pressed for auto insurance reforms and sued the state of Michigan in 2018, arguing mandatory insurance premiums “have a catastrophic impact for many Detroit residents.”

Auto insurance reform legislation approved by state lawmakers in 2019 was meant to give Michigan drivers access to more choices and lower costs. An analysis from the University of Michigan’s Poverty Solutions research group found Detroit costs have declined since then, but insurance still remains burdensome to residents.

The 2021 policy brief found the average auto insurance rate represents 18% of the median income for Detroiters – just under $32,500, according to the U.S. Census Bureau –  which is far more expensive than the 2% of income standard for affordability defined by the U.S. Department of Transportation. The cost of insurance is “unreasonably high” for Detroiters, the report states, which causes many low-income residents to drive without insurance. 

Driving without insurance is punishable by a misdemeanor in Michigan. False registration is a form of auto insurance fraud, which can carry steep legal penalties and financial risk. 

Michigan had the second-highest rate of uninsured drivers in 2019, according to the Insurance Research Council. The national research organization found one in four Michigan drivers didn’t have auto insurance. In Detroit, the estimate has been pegged closer to 60%, which is four times greater than the national average.

Detroit ZIP codes account for the top 30 highest average insurance premium, according to The Zebra. The highest was 48211, where residents pay, on average, $6,360 per year. Auto insurance premiums are based on a variety of demographic and geographic factors. Generally, neighborhoods that are considered high-risk for uninsured motorists, frequent crime, or common car thefts see higher rates.

The UM report notes that auto insurance costs are often correlated with race rather than geography. Majority-Black ZIP codes, on average, paid more than $2,400 more than the statewide average, the study found. 

Greg McKenzie, a musician and organizer with Alkebu-lan Village, said he knows Detroiters who only pay for auto insurance long enough to get their license plate renewed before canceling it.

“Insurance, in theory, is supposed to make people whole when they have a loss, but this is doing the opposite – (insurance) is creating the loss up front,” McKenzie said. “It’s not affordable. It’s not feasibile. It’s the epitome of discrimination. You force the vast majority of a community to do something that’s technically a criminal activity because of these prices.”

Michigan’s 2019 auto insurance law prohibits the use of non-driving factors to set rates – excluding consideration of things like ZIP code, sex, marital status, homeownership, education level and other factors that highly correlate with race and poverty. However, UM reserachers argue the new law “does not go far enough to protect non-white and low-income people from being discriminated against in the insurance market.”

BridgeDetroit reached out to the Michigan Secretary of State and Department of Insurance and Financial Services (DIFS) for details on uninsured drivers in Detroit. Laura Hall, director of communications for DIFS, said that data is not kept by the state agency. Officials with the Secretary of State’s office did not respond to multiple requests for comment. 

Erin McDonough, executive director of the Insurance Alliance of Michigan, said the legislative reforms are making it easier for people to purchase auto insurance. 

“The bipartisan auto no-fault reforms are saving drivers money across the state, with an estimated savings of $5 billion over the past three years,” McDonough said in a statement. “In fact, more Michigan residents are buying auto insurance than ever before, with over 202,000 new drivers purchasing car insurance since the reforms took effect. We’ve had more than 50 new insurance companies enter the Michigan market, which further drives down costs by creating competition – another win for consumers.”

The Insurance Alliance of Michigan was unable to say how many of the 202,000 drivers who newly purchased auto insurance are from Detroit. 

State Rep. Joe Tate, D-Detroit, said insurance affordability has long been a major “challenge” for Detroiters. A high rate of uninsured drivers can also impact how rates are calculated, he said. When the auto reforms were passed in 2019, Tate remarked that the legislation was a step in the right direction, but didn’t go far enough. 

Tate said he’s seeking data from DIFS about the impact of the recent reforms, but hopes it will “help support people to actually have their correct address if they’re living in the City of Detroit.”

John Myers, a resident in the Jefferson-Chalmers neighborhood, said auto insurance rates are an especially common headache for Detroiters in his area.

“I understand why a lot of my friends that live in Detroit have (vehicles registered to) addresses outside of Detroit,” he said. “I don’t agree with it. The insurance companies will investigate people, so I’m not going to go that route.”

Tate said he often hears from constituents about unaffordable insurance rates. Myers is among them. Myers said he contacted Tate’s office to share that Detroiters are seeing marginal savings from the reform.

“I wanted to let them know that this legislation really was not not doing any favors,” Myers said.

Detroit’s City Council stated “it is abundantly clear” that the city should do more to let Detroiters know about the parking discount program in its 2022-23 budget resolution. The council argued many residents are unaware of the discount program and frequently complain to council offices about the high cost of parking tickets.

Sheffield unsuccessfully sought to lower fines from $45 to $30 in 2019. Duggan contended at the time that the $45 fine was needed to balance the city’s budget. 

The City of Detroit collected $27.9 million in parking fine revenue from 2019 to 2021 and is projected to bring in $7 million during this fiscal year, which ended June 30.

Parking fine and fee revenue steadily declined from $16.7 million in 2020 to $9.5 million in 2021, in part due to the COVID-19 pandemic, according to budget documents. Data provided during the city’s revenue estimating conference this week suggested parking fees will increase as downtown traffic picks back up, but it will take several years to return to pre-pandemic levels. Estimates project a jump to $13.3 million in the 2022 fiscal year and $14.4 million the following year. 

Parking fees revenues go into the city’s General Fund. The Municipal Parking Department budget is $18.7 million for the 2023 fiscal year and is projected to remain at $19 million through 2026, according to the city’s four-year financial plan. 

Detroit’s parking department also maintains two garages; one downtown and the other in the Eastern Market District as well as city-owned lots. Two garages were sold off in 2020, netting the city $5.1 million in one-time revenues that were deposited into a fund for capital projects. 

Under the city’s fee schedule, unpaid parking tickets increase to $65 after 30 days. Individuals with vehicles registered in another state are subject to a $95 fine, if tickets are left unpaid after 30 days. Fines start at $150 for parking in handicapped spaces, which increases to $170 after a month. 

Parking tickets can be paid online or by visiting the Municipal Parking Department at 1600 W. Lafayette Boulevard. Detroiters can also contest tickets online.