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.
When looking for cheap car insurance, the process is essential. To find out who has the cheapest auto insurance, we have compared multiple cheap insurance companies across a few metrics. We used ratings from J.D. Power and AM Best to help evaluate and discover the best cheap auto insurance. After using these metrics to see which companies were able to deliver on affordable car insurance while maintaining decent customer satisfaction, we looked into which of these companies offered usage-based policies and significant discounts.
We came away with six companies that compete for the rank of best cheapest auto insurance. Which company is best and most affordable for you will depend in part on what kind of policy you are interested in, what type of vehicle and driving record you have and more. As a baseline, these six auto insurers offer quality car insurance at an affordable price.
For those interested in traditional auto insurance with low rates, Erie came out on top. For those who would prefer to save money by carefully customizing their car insurance policy, Progressive’s Name Your Price program is an excellent option. Each of the insurers reviewed has options that place them among the best cheap car insurance.
Best cheap car insurance
|Insurance company||Yearly premium for minimum coverage||JD Power Rating (out of 1,000 points)|
|Erie||$372||846 (North Central)
|Auto-Owners||$398||845 (North Central)
851 (North Central)
|Amica||$460||863 (New England)|
897 (North Central)
|American Family||$542||827 (North Central)
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.
Erie Insurance is the cheapest car insurance on the list at only $372 for the year. It rates better than average in the J.D. Power Customer Satisfaction studies for the states it serves.
Erie car insurance offers rideshare insurance, accident forgiveness and pet coverage. If your pet is injured in a car accident, Erie will cover up to $500 in vet bills per pet, with a total limit of $1,000 per accident.
To save further on the company’s already low rates, take advantage of discounts by bundling your insurance, adding other cars and paying your premiums in full.
The second most affordable car insurance company is Auto-Owners. The provider is limited to half the country, primarily the Southeast and Central areas of the U.S. but provides cheap insurance with better-than-average customer reviews.
Auto-Owners offers many coverage and car insurance options for drivers of all ages and driving experiences. Some extras include GAP, cellphone and rental car insurance.
This carrier also offers property, life and business insurance. Bundle multiple policies to save money. And if you pay your premiums on time for three years, you’ll automatically earn an additional discount.
Geico has an AM Best rating of an A++ (Superior) and ranked highest within the 2020 J.D. Power report for auto insurers in the north-central and northwest regions of the United States. 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.
Amica offers cheap car insurance for New England residents. The insurer is highly-related in the small area it serves for good and speedy claims resolutions and free additions to coverage, such as free lock replacement service if you lose your keys.
Each year you go without an accident or claim, you earn points. These points can be used to discount the amount of money you have to pay for your deductible or to prevent your rates from increasing after filing a claim.
Amica rewards loyalty like no other car insurance company. Besides the points you earn for every year without a claim, you can qualify for a loyalty discount after two years. Additionally, drivers under 30 can get a legacy discount on their car insurance if their parents had Amica for at least five consecutive years.
USAA ranks #1 in customer satisfaction from J.D. Power for all regions nationwide. The insurance company provides lots of value for a low price to customers across the country.
Unfortunately, USAA is only available to active and retired military and their family members. If you or someone you love served in the military, you can sign up for USAA membership to access the company’s cheap car insurance.
Some of USAA’s discounts include safe driver and good student discounts. If you’re active military, you will appreciate the reduction in premiums for low mileage or keeping your vehicle stored while you’re deployed.
American Family makes the list of providers offering cheap car insurance in the U.S. The company saves customers money and ranks well in customer satisfaction, with policyholders in the Southwest being the happiest.
American Family is a great option for anyone who uses their car to earn a little extra cash. If you drive for Uber, Lyft or other ridesharing services, you can add rideshare coverage. You can also buy GAP coverage to make sure you’re reimbursed the full amount you owe on a financed vehicle if it’s totaled.
Take advantage of the standard discounts this provider offers, such as multi-policy, safe driver, automatic payments and good student discounts. Younger drivers can qualify for discounts if their parents are American Family customers or if they complete 40 hours per year of volunteer work.
How to find cheap car insurance
If you’re searching for “who has the cheapest auto insurance near me,” you’ll still have a few questions left to answer. Many companies claim they have the cheapest car insurance, but which ones deliver on their promise? Insurance expert Laura Adams reminds us that “Since you can’t control many elements that determine how much you must pay for car insurance, focus on what is in your control. For instance, insurers evaluate you differently, and they typically offer different types and amounts of discounts.”
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. So, what is the cheapest car insurance? Laura Adams says, “There are many variables that auto insurers use to evaluate the potential risk of a policyholder. The type of vehicle you drive, the types and amounts of coverage you select, the deductible you choose, your age, driving history, annual miles driven, location, and credit (in most states) are significant factors in your auto rates.”
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. Our insurance expert encourages you to, “Make sure you’re getting every car insurance discount that you’re entitled to, and compare rates from several insurers regularly. Another tip is to shop and compare auto rates after any significant changes, such as getting into a car accident, buying a new car, getting married, improving your credit, or changing careers.”
- 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.
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 its 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 percent 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 companies ranked for cheapest car insurance in this article, except for Farmers, offer some form of usage-based auto insurance. While these companies carried the spotlight of our review, many others also provide usage-based auto insurance plans.
- 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, along with its Steer Clear program, which is designed for new and learning drivers.
- MetroMile provides a pay per mile driven insurance option.
- Esurance offers a telematic plan called DriveSense.
- Safeco offers its RightTrack program for usage-based auto insurance.
- Travelers offers IntelliDrive as their usage-base policy.
Is the cheapest car insurance the best?
Although the price is an important factor, what you get for that premium is just as important.
Sometimes, affordable 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.
Who has the cheapest car insurance?
We found that Erie Insurance has the cheapest auto insurance at $372 per year, followed by Auto-Owners Insurance. Shop around and compare quotes to find the most affordable car insurance for you.