There’s nothing magical about finding affordable insurance. Getting the right rate for your personal driving needs takes time, and navigating the auto insurance industry is no simple task.
Car insurance companies are common in the U.S., and most of them will claim to be the best. The trick is figuring out which ones can actually back up the claims they make—that’s where we come in.
We began our search for the cheapest car insurance companies by researching professional ratings organizations like J.D. Power and AM Best and seeing what they have to say about which providers are the best in the industry. Next, we scoured provider web sites to find the lowest rates based on a medium amount of coverage.
What we found is that the best cheap car insurance company will change from person to person. If you are only looking for low rates and big discounts, Geico is at the top of the list. For more specialized policies, however, Progressive’s Name Your Price system is hard to beat.
Regardless of your individual situation and needs, one the six auto insurers on this list should be up to the task.
Cheapest car insurance companies
|Company||Average cost of an annual policy without a claim||Average cost of an annual policy if you file a claim*||J.D.Power Rating|
|Geico||$901||$1,180||4 out of 5|
|Nationwide||$1,227||$1,607||2 out of 5|
|State Farm||$1,313||$1,720||4 out of 5|
|Farmers||$1,351||$1,770||3 out of 5|
|Progressive||$1,415||$1,854||3 out of 5|
|Allstate||$1,758||$2,303||3 out of 5|
*Calculated by an average post-claim increase of 31%.
Some of the cheapest auto insurance companies are also the largest ones. The best cheap car insurance companies usually have a variety of policy offers to meet your needs. Most offer auto insurance discounts that help you save even more money. Here’s a look at some of the top companies.
Geico has an AM Best rating of an A++ (Superior) insurer and a J.D. Power score of four out of five. The mobile app makes it easy to ask questions to a virtual assistant, call roadside assistance, pay bills and download documents. By going virtual and cutting out insurance agents and offices, Geico keeps its car insurance pricing competitively low.
Beyond that, Geico offers a variety of incentives that make it an excellent choice for car insurance. Geico is one of the few to offer rideshare insurance in select states, covering people who drive for Uber, Lyft, Grubhub and similar companies. Geico also offers accident forgiveness coverage, which keeps your rate from going up if you’ve had one at-fault accident.
On top of that, Geico has several discounts including for anti-theft devices, good drivers, good students, military, having multiple policies, prepayment and vehicle safety equipment.
Nationwide provides service in almost all states, excluding Louisiana, Alaska, Hawaii and Massachusetts. Nationwide scored a two out of five on the J.D. Power insurance study. Nationwide offers accident forgiveness, gap insurance and a vanishing deductible option, reducing your deductible by $100 for every year you stay accident-free (up to $500).
For discounts, Nationwide has multi-policy, a family plan, accident-free, paperless documents, good student, anti-theft and easy pay. This insurer also offers a unique feature called Vanishing Deductible®, which lowers the “comprehensive and/or collision deductible by $100 for every year safe driving. Up to $500 total.”
State Farm has an A++ (Superior) credit rating from AM Best and a four of five score with J.D. Power. State Farm focuses on value over lowest price. Customer service is excellent, and the company offers many insurance products as well as financial services like bank accounts, credit cards and home loans for one-stop shopping.
Like Geico, State Farm has rideshare insurance available in select states for Uber and Lyft drivers. Adding rideshare insurance generally increases the cost of a State Farm policy 15 to 20 percent, according to its website.
State Farm offers a few discounts, but not as many as Geico or Nationwide. Specifically, State Farm offers discounts for good drivers, good students, multiple policies and vehicle safety equipment.
On the J.D. Power auto insurance study, Farmers received a score of three out of five. The company is known for having excellent customer service and making filing claims easy. Farmers car insurance provides customers with 24/7 support, online policy management, new car replacement coverage and accident forgiveness.
Farmers also has a multitude of discounts, including multiple vehicle, business and professional, mobile glass, good student, safe driver and alternative fuel. This provider also offers insurance for homes, condos, renters, business, and life.
Progressive has earned an AM Best credit rating of A+ (Superior) and received a three out of five on the J.D. Power auto insurance study. It is also one of the few insurers to offer gap insurance to cover a new car’s depreciation.
The company focuses on having the cheapest auto insurance it can and has many coverage options, even for drivers with a low credit score or previous accidents and traffic violations. Drivers with SR-22 requirements might be able to find reliable car insurance through Progressive.
Progressive is also known for its Name Your Price tool where you can build a custom policy designed to meet your coverage needs and budget. If you have collision coverage, Progressive will even cover veterinary expenses if your pet is injured in a car crash. Customers can get good driver, multiple policy and prepayment discounts.
Allstate has an AM Best credit rating of A+ (Superior) and scored a three out of five on the J.D. Power auto insurance study. Allstate’s policies are available in all U.S. states through the easy-to-navigate website, mobile app or authorized agents.
Signing up for Allstate’s Safe Driving Bonus program and staying accident-free means you’ll get a check every six months without an accident. You also get $100 off your collision insurance deductible when you sign up, plus $100 every year you drive without an accident, up to $500.
Allstate provides many discounts, including for anti-theft devices, good drivers, good students, multiple policies, prepayment and vehicle safety equipment.
How to find cheap car insurance
If you’re searching for “who has the cheapest auto insurance near me,” you’ll still have to do your research. Many companies claim they have the cheapest car insurance, but which ones deliver on their promise?
Car insurance rates depend on many factors:
- Credit history
- Driver age
- Driving record
- Vehicle value and type
So many factors go into determining rates that the company that provides the cheapest auto insurance for you might not be the same for someone else.
Once you’ve identified your individual needs for insurance, you can figure out how to save money and still get the right amount of coverage. Here are some ways you can save money on car insurance.
- Ask if your employer has any group insurance discount. Some larger companies offer employees a reduced rate with a particular insurance company, so it pays to ask.
- Consider what car you drive. Different models have different safety records, and some are more prone to theft than others. These things can increase your rates.
- Shop around. Companies offer rates depending on variables such as state, gender and driving record. Get at least three quotes and find all the discounts you qualify for.
- Increase the deductible. A higher deductible will reduce your premium. Have enough money set aside in case you need to meet the new deductible.
- Ask about discounts. Many companies offer discounts based on how you drive, safety features and lower mileage.
Discounts can be a huge help in lowering the cost of coverage. Here are a few other things insurers commonly offer discounts for:
- Bundling your homeowners and auto insurance: If you have more than one kind of insurance with the same company, you can get multi-policy discounts.
- Having a good credit history: Research shows that those who have a good credit history make fewer claims and are therefore awarded lower rates.
Choosing the minimum insurance requirement
Most states require a minimum of liability insurance, but you’ll want full coverage to make sure you’re completely covered if you need to make an insurance claim. Minimum insurance coverage typically includes:
- Bodily injury liability: This covers medical bills for anyone injured in an accident including your passengers, bystanders or other drivers.
- Property damage liability: This covers damage to property that happens in an accident.
Full coverage includes damage to your vehicle in case of accident, theft or weather. It also provides roadside assistance and covers the cost of renting a vehicle while yours is being repaired. In addition to the minimum coverages mentioned above, here are the coverages commonly included in a full coverage policy:
- Collision: This covers damage to your car from a wreck with another car or other object while you are driving the car.
- Comprehensive: This covers damage from something other than a wreck, such as theft, vandalism, or natural disasters and hazards.
- Uninsured or underinsured motorist coverage: This coverage is to protect you financially in case you are involved in an accident with an uninsured motorist.
- Medical payments: This covers medical payments for you and your passengers no matter who is at fault for the collision.
- Personal injury protection (PIP): Similar to medical payments, this covers you and your passengers regardless of fault up to the policy limit.
The minimum requirements for auto insurance changes from state to state. Head over to our page on car insurance rates by state to find out what the minimum is in your region.
Low income car insurance
Insurance companies don’t base rates on income; however, they do use factors that are correlated with income. Homeownership, credit score, education and where you live all play into your rate.
A few states offer government-sponsored programs for low-income drivers. For most people, though, when it comes to obtaining car insurance on a low income, policy premiums and available discounts can make all the difference.
While some states do offer aid programs, for most, the path to affordable car insurance is going to involve following the steps outlined above in the How to Find Cheap Car Insurance section.
If you live in one of the four states that aids with low-income car insurance costs, read below for an outline of each state’s program.
- California: California has a program called California’s Low-cost Automobile Insurance program that offers lower rates for low-income drivers. To qualify, you must have a valid California driver’s license, own a vehicle that is valued at $25,000 or less, meet income eligibility requirements, be at least 16 years of age.
- New Jersey: New Jersey has the Special Automobile Insurance Policy (SAIP) that covers the medical portion of your expenses after an accident. You must be qualified for Federal Medicaid with hospitalization to qualify.
- Hawaii: Hawaii offers some benefits through its Aid to Aged, Blind and Disabled program (AABD). To be eligible, you must be 65 years of age or older, legally blind or totally and permanently disabled.
- Maryland: The Maryland Automobile Insurance Fund provides liability coverage to those who have poor credit, lapses in insurance or a poor driving record. According to their site, “To be eligible for insurance from the Fund, a driver must have been rejected by at least two private insurers or have had automobile insurance canceled or not renewed for any reason other than nonpayment of premiums.”
Other affordable car insurance programs
Cure is available in New Jersey and Pennsylvania and uses only your driving record to calculate your rate. According to their mission statement, the Cure program wants to level the playing field and make cheap auto insurance available to all. While this won’t help you if you live outside of New Jersey or Pennsylvania, it can save you up to 50% on auto insurance if you do live in either state.
Usage-based car insurance companies
Another option is to find a usage-based auto insurance company. Usage-based insurance programs calculate your insurance rate by only considering your driving record and can lead to cheap auto insurance. Some of these are offered through larger insurance companies, so there are some low-income car insurance options that could work for you.
All of the six companies ranked for cheapest car insurance in this article offer some form of usage-based auto insurance:
- Progressive offers a usage-based program called Snapshot.
- Allstate offers Drivewise in the states of Colorado, Arizona, New York, New Jersey, Illinois, Michigan and Ohio.
- Nationwide provides a program called SmartRide.
- Geico has begun a program that uses the DriveEasy app, but it is currently limited to Pennsylvania and Connecticut.
- State Farm offers a similar program called Drive Safe & Save.
Is the cheapest car insurance the best?
Although price is an important factor, what you get for the premium is just as important.
Sometimes, cheap insurance may come with limitations or conditions that may cost you in the long run, like liability coverage with a high deductible ($1,500 for example). If you get into an accident, you’ll have to pay the first $1,500 of damages before your insurance kicks in.
Another pitfall to look for when searching for cheap auto insurance is coverage with low limits. For example, property damage liability insurance with a $10,000 deductible is probably cheap, but if you’re in an accident with moderate damages to another vehicle, you would be responsible for repairs over the $10,000 coverage, out-of-pocket.
Frequently asked questions
How can I save on car insurance?
To save on your car insurance, get quotes from several insurers to compare. Take advantage of discounts like automatic payments, or vehicle safety equipment discounts. Choose a higher deductible to drop your premium price down.
Is the minimum required insurance in my state enough coverage?
In many cases, having the minimum required by your state may be legal but would not cover you completely in a serious accident. The minimum limit for damages could leave you personally responsible for any expenses above the insurance limit. If you own your home or have investments or other assets, protect them by raising your auto insurance coverage limits.
Which cars are the cheapest to insure?
Although it could depend on the insurance provider and the location, Honda, Jeep and Subaru are three brands that are usually cheap to insure compared to other car brands.