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Best Cheap Car Insurance Companies for 2020
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
Compare the cheapest car insurance companies
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|
|Main St. American Company||$658|
|Virgina Farm Bureau||$968|
|Oregon Mutual Insurance||$1,054|
Car Insurance Rate Data. Premiums are assuming a 30-year-old with good credit who drives a 2017 Honda Civic.
Car insurance average premiums
|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.
Cheapest Car Insurance Rates for Bad Credit
|Carrier||Good Drivers with Credit Tier “Good”||Good Drivers with Credit Tier “Poor”||Difference in cost|
Car Insurance Rate Data. Premiums are assuming a full coverage policy of a 30-year-old who drives a 2017 Honda Civic.
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.
|Carrier||Annual cost||Monthly cost||Weekly cost||Daily cost|
The cheapest insurance coverage you can get
Car insurance isn’t optional. If you’re planning on getting behind the wheel, you’ll need to have vehicle insurance before you do. Each state’s requirements for car insurance vary, so the amount of insurance you need depends on where you live. The state requirements are the minimum amount you’ll need and often the cheapest car insurance you may find.
[Read: The Best Auto Insurance of 2020]
When shopping for the best car insurance for cheap, keep in mind that the state-required minimum doesn’t protect your own car and property. States require you to have coverage to protect others if you’re involved in a car accident. If you go with the cheap car insurance and get into an accident, any damages or losses to your car aren’t covered by the lowest-cost basic policy.
It’s important to look beyond the lowest price tag to find coverage that protects you in a variety of situations. For example, some people operate beyond the fringes of the law. If you’re in an accident through no fault of your own and the other driver doesn’t have the legal auto insurance minimum, you’ll have to foot the bill yourself. It’s unfair, but it happens. Having uninsured or underinsured motorist coverage will cover you in such cases.
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.
Discounts for cheap car insurance
Sometimes, you can’t control where you live, which could be a big cost factor when looking for cheap car insurance. But you can control taking advantage of car insurance discounts — and there are many. When shopping for car insurance, look for what car insurance discounts the company lists on its website. If you don’t see a discount that applies to you, don’t be afraid to ask. Most insurers are willing to work with you to earn your business.
Car insurance discounts come in a variety of types. There may be car insurance discounts for your age, work field, type of car or your driving habits. Some of the car insurance discounts you can expect when you’re looking for the best car insurance for cheap include:
- Bundled insurance or multiple policies
- Pay in advance
- Paperless statements
- Low mileage
- Good student
- Hybrid or electric vehicle
- Defensive driver course completed
- Anti-theft system
- Garage parking
- Anti-lock brakes
- Safety equipment
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.
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.
What types of car insurance coverage 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 minimum car insurance
As mentioned, the state’s minimum coverage requirement is usually the cheapest car insurance available, but state minimum coverage varies. For example, Alaska requires drivers to have a policy of 50/100/25 as a minimum legal amount, meaning $50,000 for bodily injury per person in an accident, $100,000 for bodily injury total per accident and $25,000 for property damage. In contrast, California’s minimum is lower than Alaska’s at 15/30/5.
When shopping for cheap car insurance, the bare minimum state requirement is usually your best bet, but there are other factors that affect the cost of vehicle insurance. You’d think that California’s lower amount of car insurance required will be less expensive than getting insured in Alaska. Surprisingly, Alaska’s average cost for car insurance is $595, cheaper than California’s average of $786 per year. Considering you’re getting more coverage in Alaska, you’d think it would be more expensive, but it’s not. That’s why it’s important to shop around, consider the car you’ll be driving and find other ways to save on your car insurance.
Take a closer look at what minimum car insurance requirements are by state and what the average annual premium is.
|State||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|
|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 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|
|Ohio||Bodily injury liability, property damage liability||25/50/25||$462|
|Oklahoma||Bodily injury liability, property damage liability||25/50/25||$639|
|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 state required 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.
How to budget 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.
- 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