Best Cheap Car Insurance Companies for 2020

Fact-checked with HomeInsurance.com

It’s no secret that car insurance can be costly, but it’s a necessary expense. If you’re on a budget, finding the cheapest car insurance might sound like the best way to save, but in reality, you still need a policy that’s going to give you a good return on your investment.

Compare Affordable Car Insurance Rates

Save money on auto coverage with our simple comparison tool.

To determine auto insurance rates, providers use an algorithm that changes every year. That equation factors in new statistics on driving behaviors and customer requirements that could lower or increase rates. Because rates are constantly changing, it can be difficult to determine which insurance provider will give you the best price.

To find the cheapest car insurance near you, get multiple car insurance quotes from different providers to determine how much you can expect to pay. You can also look at discounts that companies offer, which could help you save even more money on your monthly premiums.

To simplify your insurance shopping journey, we’ve put together a comprehensive guide to compare some of the cheapest car insurance plans of 2020. Out of 337 licensed companies and 15,000 different quotes we studied, these are the five auto insurance companies that offer some of the most cost-friendly options.

The best cheap car insurance providers of 2020

  • USAA – Best for customer service
  • Geico – Best for affordable premiums
  • State Farm – Best for mobile tools and resources
  • Progressive – Best for insurance discounts
  • Allstate – Best for add-on coverages

Best for customer service – USAA

USAA offers exceptional customer service and comprehensive coverage to active military members and their families.

J.D. Power Score AM Best Rating BBB Rating SimpleScore
5 out of 5 A++ B+ 4.6

USAA is a highly ranked insurance company that provides some of the best auto insurance in the country. The company is known for its top-notch customer service, which can be hard to find in the insurance industry. In addition to great service, USAA also offers extensive coverage and good discounts for drivers who want to save money. The only downside to USAA is that its membership is only available to members of the military and their families. Because of that, this provider isn’t an option for every driver.

Our Two Cents – We highly recommend USAA auto insurance to any driver who is an active or retired service member, or is a family member of a USAA customer.

Best for affordable premiums – Geico

Geico offers some of the most affordable auto insurance in the country.

J.D. Power Score AM Best Rating BBB Rating SimpleScore
4 out of 5 A++ A+ 4.0

Geico’s “15 minutes could often save you 15 percent or more” promise holds true. Based on our research, Geico offers the most affordable rates of almost any insurance company on the market. In addition to its low premiums, Geico also offers a wide range of discounts that drivers can use to save even more money. Keep in mind that Geico doesn’t have the greatest customer service or the fastest claims handling process. If you’re looking for cheap, bare bones coverage, Geico is a good option to consider.

Our Two Cents – Geico is a standout insurance provider that sells affordable premiums to all drivers.

Best for mobile tools and resources – State Farm

State Farm’s mobile and online tools are ideal for drivers who want to manage their policy online and save money.

J.D. Power Score AM Best Rating BBB Rating SimpleScore
4 out of 5 A++ A 4.4

State Farm is a strong insurance company overall. The company is consistently ranked highly and has impressive financial strength ratings. Of the providers we evaluated, we felt that State Farm offered the best mobile and online tools. Its highly rated mobile app allows drivers to manage their policy, report a claim, make a payment, and more. Mobile-driven programs like Drive Safe and Save and Steer Clear can help drivers save money on their car insurance by demonstrating safe driving habits. State Farm’s insurance premiums tend to be more expensive than competitors, but taking advantage of cost savings tools could lower your rate.

Our Two Cents – State Farm’s mobile tools make it easy for drivers to manage their policy on the go, and the Drive Safe and Save and Steer Clear programs are great for drivers who want to save money.

Best for insurance discounts – Progressive

Progressive offers impressive discounts that can help drivers save money on their car insurance.

J.D. Power Score AM Best Rating BBB Rating SimpleScore
3 out of 5 A+ A+ 4.2

Progressive stands out for its extensive lineup of insurance discounts. In addition to basic discounts, like policy bundling and multi-vehicle discounts, Progressive offers many unique discounts, like continuous insurance, students away at school, getting a quote online, signing a policy online and signing up for auto pay. Unlike some companies, Progressive offers discounts that many drivers are able to take advantage of. Overall, Progressive’s premiums tend to be affordable. However, the company’s customer service ratings are typically low.

Our Two Cents – Progressive already has affordable premiums, but they also offer great discounts to help drivers save even more money on their car insurance.

Best for add-on coverages – Allstate

Allstate offers a number of add-on coverages and endorsements that allow drivers to customize their policy.

J.D. Power Score AM Best Rating BBB Rating SimpleScore
3 out of 5 A+ A+ 4.2

Drivers who are looking to customize a policy based on their needs and budget should look into Allstate. Of the providers we evaluated, Allstate offered the best add-on policies and endorsement coverage. Some examples include soundsystem insurance, personal injury protection, classic car insurance, personal umbrella insurance and drive to Mexico insurance. Additionally, drivers can easily choose to increase or decrease their coverage limits for the protection they need. Allstate also offers 24/7 roadside assistance if your car breaks down away from home. The only downside to Allstate is that it doesn’t have the best customer service or claims reviews.

Our Two Cents – We like Allstate because of the affordable and comprehensive add-on coverage it offers.

Car insurance average premiums

Average
Annual Premium
Overall rating Affordability Tools and features Customer satisfaction Discounts
USAA $821 5 out of 5 5 out of 5 4.5 out of 5 5 out of 5 4.5 out of 5
Geico $1,022 4.5 out of 5 5 out of 5 4 out of 5 3 out of 5 5 out of 5
State Farm $1,173 4 out of 5 4 out of 5 5 out of 5 4 out of 5 4 out of 5
Progressive $1,455 3.5 out of 5 3 out of 5 4 out of 5 4 out of 5 3.5 out of 5
Allstate $1,687 3 out of 5 3.5 out of 5 3 out of 5 3 out of 5 5 out of 5

Car Insurance Rate Data. Average annual premium is based on a 12-month term. Rate is based on 30-year-old with a clean driving record and good credit driving a 2017 Honda Civic. Rate data includes all 50 states with a range from state required to full coverage policies.

There’s no guarantee that any company will offer the cheapest car insurance for your situation, so it always pays to get a few quotes and compare prices and each insurer’s strengths and weaknesses.

Annual cost Monthly cost Weekly cost Daily cost
USAA $821 $68.42 $15.79 $2.25
Geico $1,022 $85.17 $21.29 $3.04
State Farm $1,173 $97.75 $24.44 $3.49
Progressive $1,455 $121.25 $30.31 $4.33
Allstate $1,687 $140.58 $35.15 $5.02

Consider smaller insurance companies

Smaller insurance companies are not listed in our top picks due to limited regional availability, but these companies can provide a lower cost versus national companies. It’s important to shop around within companies licensed in your state or region to find the best rate. We found that drivers paid $1043 as an average annual premium with Erie Insurance. This stacks up with providers such as USAA and Geico. Below are examples of a full coverage annual premium for a sample of regional companies.

Smaller regional carrier Average full
coverage premium

Erie $1043
Main St. American Company $658
American National $716
Virgina Farm Bureau $968
Oregon Mutual Insurance $1,054
Home-Owners $938
Integrity $989
Countryway $1,170
Grange $962
Westfield National $1,114

Car Insurance Rate Data. Premiums are assuming a 30-year-old with good credit who drives a 2017 Honda Civic.

How to find the cheapest car insurance

Certain factors that affect your car insurance rates are beyond your control. These include basic demographics such as your age, gender, marital status, location and job.

Other factors, including how you manage your credit, what car and how you drive it, are within your control. So make choices considering those factors, comparison shop, use discounts and consider bundling policies to find the cheapest car insurance companies.

Shop around

Save time by using an online quote tool to get a quick snapshot of potential rates from several auto-insurance companies at once. It also helps you avoid price optimization, where rates are established not just on how risky a driver is to insure but also on how much insurance companies think they’re comfortable paying. Getting new quotes regularly is the best way to avoid price optimization because insurers can see how often you shop around and therefore how likely they are to lose you as a customer.

Bundle policies

Many car insurance companies will give you a discount if you have other policies with them. The most common policies for bundling are home and auto insurance. However, you may get a break on low-cost insurance if you use the same provider for life, home, auto or renters insurance policies. Bundled policies are convenient too; you’ll be dealing with only one bill and one company. Keep in mind that every insurance company offers a different amount of savings for policy bundling.

Boost your deductible

Raising your deductible is a good move if you have cash stashed away to pay a higher deductible in case of a crash. Factors such as your age and driving record will also affect how much raising your deductible will actually save you.

Drive a low-risk car

Luxury cars are always the most expensive to insure. These cars also cost a lot more to fix and are attractive targets for thieves. Family-friendly vehicles including minivans, sedans and smaller SUVs cost the least to insure. Their drivers tend to be more careful and are simpler to fix, ultimately creating fewer claims.

Change your driving habits

If you get a speeding ticket every month, your bill will skyrocket. If you’ve had a clean driving record for years, you will have cheaper car insurance. Driving less is the simplest, easiest way to change your driving habits. Many states have already outlawed texting and driving. Another good tip is to exercise patience and come to complete stops when necessary. Tell your insurer about your new habits to receive the best insurance rates. Some insurance providers offer in-car technology that identifies safe driving habits, like Allstates’ Drivewise, State Farm’s Drive Safe and Save and Progressive’s Snapshot.

Maintain good credit

Most car insurance companies look at your credit score to help determine your rate. According to consumer advocacy group United Policyholders, a rock-bottom credit score could mean you’ll pay double, triple or even quadruple over someone with a perfect credit score. This controversial practice is illegal in four states: California, Hawaii, Maryland and Massachusetts. If you don’t live in one of those states, working to raise your credit score can help you get cheap auto insurance.

Cheapest Car Insurance Rates for Bad Credit

Cheap Insurance Companies Good Drivers with Credit Tier “Good” Good Drivers with Credit Tier “Poor” Difference in cost
USAA $820 $2133 +$1313
Geico $1022 $2166 +$1144
State Farm $1173 $3373 +$2200
Progressive $1455 $3234 +$1779
AllState $1687 $3618 +$1931

Car Insurance Rate Data. Premiums are assuming a full coverage policy of a 30-year-old who drives a 2017 Honda Civic.

What types of car insurance do I really need?

When you purchase car insurance, you’ll have to decide whether you want to opt for liability coverage or full coverage car insurance. Full coverage insurance, which includes comprehensive and collision coverage, comes with a much heftier price tag than liability-only insurance. If you took out a loan to pay for your car, you probably don’t have a choice — your lender will require proof of comprehensive and collision coverage. Dropping this coverage usually isn’t a good idea if your car is worth a decent amount of money.

There are situations when opting only for liability makes sense. For instance, if you drive an older, paid-off vehicle that doesn’t have much value to anyone but you, keeping only liability coverage can mean significant savings. Comprehensive and collision coverage may also be overkill on an older car you drive sparingly.

Would I personally drop my comprehensive and collision policies? No, because my 2013 Jeep Patriot is still relatively new and would cost a significant sum to repair or replace. My brother, however, drives a 1984 Ford F150. At best, it’s worth around $2,500 — and his policy is only $19 a month! For him, dropping comprehensive and collision coverage made a lot more sense.

Our Two Cents: Liability coverage is your cheapest option and meets the legal requirement, but dropping collision and comprehensive coverage would be a risky move if it would be a major financial hardship to fix or replace your car after an accident.

State-required liability insurance

Almost every state requires drivers to carry car insurance and each state has different requirements when it comes to the amount of insurance you must have. Many simply require liability insurance — both bodily injury and property damage — which covers damage to another person’s car or their injuries if you cause an accident. Others go a step or two further, requiring add-ons such as personal injury protection and uninsured or underinsured motorist coverage. Typically, the minimum amount of insurance required is the cheapest and lowest amount of coverage you can get.

According to the Insurance Information Institute, here are the kinds of insurance each state requires as of January 2019 and the minimum required amounts of liability insurance. The only state that does not require liability insurance is New Hampshire; however, you’re still required to show that you have sufficient funds to meet state requirements if you’re at fault in a crash.

Types of insurance required Minimum required liability insurance Average Annual Premium
Alabama Bodily injury liability, property damage liability 25/50/25 $641
Alaska Bodily injury liability, property damage liability 50/100/25 $595
Arizona Bodily injury liability, property damage liability 15/30/10 $864
Arkansas Bodily injury liability, property damage liability, personal injury protection 25/50/25 $591
California Bodily injury liability, property damage liability 15/30/5 $786
Colorado Bodily injury liability, property damage liability 25/50/15 $634
Connecticut Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/20 $1309
Delaware Bodily injury liability, property damage liability, personal injury protection 25/50/10 $1017
Florida Property damage liability, personal injury protection 10/20/10 $1544
Georgia Bodily injury liability, property damage liability 25/50/25 $941
Hawaii Bodily injury liability, property damage liability, personal injury protection 20/40/10 $439
Idaho Bodily injury liability, property damage liability 25/50/15 $429
Illinois Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/20 $688
Indiana Bodily injury liability, property damage liability 25/50/25 $486
Iowa Bodily injury liability, property damage liability 20/40/15 $306
Kansas Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist, personal injury protection 25/50/25 $559
Kentucky Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 25/50/25 $701
Louisiana Bodily injury liability, property damage liability 15/30/25 $1,488
Maine Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist, medical payments 50/100/25 $579
Maryland Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 30/60/15 $1489
Massachusetts Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 20/40/5 $486
Michigan Bodily injury liability, property damage liability, personal injury protection 20/40/10 $1,525
Minnesota Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 30/60/10 $938
Mississippi Bodily injury liability, property damage liability 25/50/25 $644
Missouri Bodily injury liability, property damage liability, uninsured motorist 25/50/25 $598
Montana Bodily injury liability, property damage liability 25/50/20 $441
Nebraska Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/25 $412
Nevada Bodily injury liability, property damage liability 25/50/20 $989
New Hampshire Uninsured motorist, underinsured motorist, medical payments (financial responsibility only — insurance not compulsory) 25/50/25 (minimum available in NH, but not required by state law if you show sufficient funds) $803
New Jersey Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 15/30/5 $1,162
New Mexico Bodily injury liability, property damage liability 25/50/10 $521
New York Bodily injury liability, property damage liability, personal injury protection, uninsured motorist,wrongful death 25/50/10 $1,245
North Carolina Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 30/60/25 $482
North Dakota Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 25/50/25 $390
Ohio Bodily injury liability, property damage liability 25/50/25 $462
Oklahoma Bodily injury liability, property damage liability 25/50/25 $639
Oregon Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 25/50/20 $765
Pennsylvania Bodily injury liability, property damage liability, personal injury protection 15/30/5 $688
Rhode Island Bodily injury liability, property damage liability 25/50/25 $1,445
South Carolina Bodily injury liability, property damage liability, uninsured motorist 25/50/25 $724
South Dakota Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/25 $382
Tennessee Bodily injury liability, property damage liability 25/50/15 $522
Texas Bodily injury liability, property damage liability, personal injury protection 30/60/25 $775
Utah Bodily injury liability, property damage liability, personal injury protection 25/65/15 $691
Vermont Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/10 $862
Virginia Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/20 $588
Washington Bodily injury liability, property damage liability 25/50/10 $671
West Virginia Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/25 $513
Wisconsin Bodily injury liability, property damage liability, uninsured motorist, medical payments 25/50/10 $493
Wyoming Bodily injury liability, property damage liability 25/50/20 $393

Car Insurance Rate Data. State minimum liability premiums are assuming a 30-year-old with good credit who drives a 2017 Honda Civic.

Add-ons and other types of coverages

There are a number of other coverage types and add-ons, some of which may be required in certain states.

Collision coverage pays to repair or replace your car if it’s damaged or totaled in an accident. You might also want to purchase comprehensive coverage, which protects your vehicle from almost anything except damage sustained in an accident. Common situations covered under comprehensive insurance are theft or damage from severe weather.

Another common add-on to a car insurance policy is personal injury protection, which pays your medical expenses after a crash. If you’re trying to keep your bill low, personal injury coverage probably isn’t a smart buy as long as you have a good health insurance plan — there would be too much overlap between the two policies.

There are also uninsured and underinsured motorist coverages, which get you off the hook after a crash where the other driver is at fault but doesn’t carry enough (or any) insurance and can’t afford to pay. Other add-ons pay for rental cars while your car is being fixed and for roadside assistance.

As for other little add-ons, consider skipping them. If you can cover the cost of a rental (or borrow a car from a friend while you’re in a jam), rental-car riders are unnecessary and an AAA membership is often a better deal than roadside assistance coverage if you have an older vehicle.

Budgeting my car insurance

Car insurance usually isn’t cheap, even for the minimum amount of coverage that your state requires. If you’re searching for affordable insurance, you’re probably living on a budget. The good news is, there are a handful of ways that you can lower your rate so it fits within your means.

When you’re shopping for car insurance, it’s best to purchase a policy for one year, rather than six months. Getting an annual policy means your rate will be locked in for that period of time. With a six month policy, your rate could potentially increase more often.

Additionally, many insurance companies offer discounts for drivers who pay their premium in full, rather than monthly. If you can afford to pay all at once, you’ll end up saving money overtime.

Simplified

  • Based on our research, USAA, Geico, State Farm, Progressive and Allstate are the cheapest car insurance providers
  • Regional car insurance providers can also be a good option, especially if you’re willing to pay slightly more for good customer service
  • Before purchasing insurance, it’s important to know your state’s minimum coverage requirements
  • There are many ways to save money on your car insurance, like shopping around for quotes, bundling your policies, raising your deductible and improving your driving skills

Frequently asked questions

How can I get cheaper car insurance?

There are several ways you can lower your monthly premium for more affordable insurance. Start by shopping around for quotes to find a provider who can offer you the best insurance rates. You can also opt for a higher deductible, which will lower your monthly premium. Take advantage of discounts, like bundling your policies or insuring multiple vehicles. And don’t forget about your credit score — paying your bills on time and keeping credit card balances low will boost your score, which will translate into cheaper insurance rates. These factors can combine to help you get low cost insurance.

Do I need full-coverage car insurance?

The type of car insurance you choose depends on your needs and the amount of risk you’re willing to take. You aren’t required to have full-coverage car insurance, but it does offer the most protection if you’re in an accident.

If you’re able to pay the higher premiums associated with full-coverage insurance, it’s probably worth the additional money. For example, if you don’t have full-coverage insurance and you’re found at-fault for an accident that caused injury to someone else, you could be responsible for paying their medical expenses out-of-pocket.

Which auto insurance provider is the cheapest?

There is no single auto insurance provider that offers the cheapest car insurance rates for all drivers across the board. The most affordable insurance provider will vary from person to person. Remember that insurance companies look at a variety of factors when determining your rate, such as your age, the car you drive, your zip code and your credit score.

How much car insurance coverage do I need?

Every state has a minimum coverage requirement that drivers must have before putting their car on the road. However, many people choose to purchase additional coverage on top of what is required for even more protection. How much coverage you purchase depends on your budget, and how much risk you are willing to take.

Compare Affordable Car Insurance Rates

Save money on auto coverage with our simple comparison tool.

Methodology

Why should you trust us

We have one goal: Help you make smarter financial decisions without putting you to sleep. Since 2006, we’ve been publishing content to help our readers find the right Insurance coverage, carrier and policy to meet their needs and their budget. We encourage you to read our guide before starting your buying process, shop around to find the best rates and visit carrier sites for additional information. We take a look at our content regularly to make sure it’s up to date and provides the latest industry changes.

To find the best insurance rates from the cheapest car insurance companies, we started with the top ten providers in each state — those with above-average customer satisfaction ratings from J.D. Power & Associates and high financial strength marks from AM Best. We did this because affordable auto insurance quotes are great, but purchasing them from unreliable or fickle insurers could wind up being far more expensive down the road.

Next, we tallied and compared how many times each company had the first, second or third cheapest yearly premium after looking at several quotes, awarding five points for first place, three points for second place and one point for third place.

Car Insurance Rates

We used insurance rates from Quadrant Information Services. This includes analyzing thousands of rates from all 50 states that were publicly sourced from 2019 insurer filings. Rates are based on a 30-year-old male or female that had a clean driving record. Full Coverage premiums assumed a $500 collision and comprehensive deductible, and we looked at those who had both good and poor credit. These rates should be used to inform your car insurance shopping process, but your own quote may differ.