If you have car insurance, it can sometimes seem like your money is going nowhere — that is, until you get into an accident. 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
To determine auto insurance rates, providers use an algorithm that changes every year. That equations 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 28 companies and 250 different quotes, these are the three auto insurance companies that offer some of the most cost-friendly options.
Best Cheap Car Insurance Companies
To find the best cheap car insurance companies, we started with the top five to seven insurance providers in each state — those with above-average customer satisfaction ratings from J.D. Power & Associates and high financial strength marks from AM Best. Why? Because cheap auto insurance policies are great, but purchasing them from unreliable or fickle insurers could wind up being far more expensive down the road.
Then, we applied for over 250 quotes, both online and over the phone, from that nationwide pool of auto insurance companies. Each member of the team used personal information during the quote process to ensure that we could see who was consistently cheapest across the country with a handful of scenarios. In every instance, we applied only for each state’s minimum coverage.
Next, we tallied and compared how many times each company had the first, second or third cheapest yearly premium, awarding five points for first place, three points for second place and one point for third place.
As it turns out, the cheap car insurance market is dominated by three main providers: Geico, State Farm, and Progressive. As you can see below, Geico was the overwhelming victor when it came to low prices in car insurance quotes.
|Insurer||# of 1st place awards||Average annual rate|
There’s no guarantee that Geico will offer the cheapest car insurance in your state or for your particular situation, so it always pays to get a few different quotes and compare them. What’s more, each insurer has its own strengths and weaknesses. Here are some more details about our top three picks for the best cheap car insurance.
Compare Affordable Car Insurance Rates
|Geico at a Glance|
4.5 out of 5 stars
|Affordability||5 out of 5 stars|
|Tools and Features (e.g., mobile bill pay)||4 out of 5 stars|
|Customer Satisfaction||3 out of 5 stars|
|Discounts (e.g., good driving)||5 out of 5 stars|
Geico had the cheapest car insurance available in 19 of the 50 states. It was also one of the three most affordable options 75 percent of the time, and its best offer was often hundreds of dollars cheaper than the next-best competitor. Geico is also cheaper, usually, even when you drill down to specific circumstances.
For instance, when it comes to the good driver’s discount, Geico easily beat out almost every other insurer, with an average annual rate of $2,146. With State Farm, it’s $2,821, and Progressive charges $3,393. (Yes, we said almost. USAA, which is limited to members of the military and their families, offers an average annual rate of $1,934.)
Geico also is one of the cheapest options for drivers with good driving records but poor credit, with an annual average rate of $4,259. At Progressive, it’s $4,738; at State Farm, $4,951. And if you have a speeding ticket in your recent past, slow down for Geico. The annual average rate you’d pay is $2,645, compared to $3,186 at State Farm and $4,002 with Progressive.
That said, if you have a DUI on your record, Geico may no longer be an affordable option. Annually, on average, you can expect to pay $4,876. State Farm would save you more than a thousand dollars in that case, with an average annual premium of $3,637, and Progressive clocks in at $3,970.
[Note: Occasionally, the reason Geico was able to beat its competition by such a large margin was because the other insurers required slightly more coverage than the state mandated.]
The gecko-loving company is without a doubt the most consistently affordable option out there, so it deserves a shopper’s consideration. And the gecko is right: According to our research, it’s safe to say that 15 minutes could often save you “15 percent or more” on a state-minimum policy.
However, Geico’s range of coverages and discounts don’t particularly shine when compared to a competitor like Allstate. Allstate customers enjoy prepay discounts, low-mileage discounts, interior vehicle coverage, and new car replacement — all of which are not offered at Geico.
When it comes to customer service ratings, Geico doesn’t have much to write home about. Its customer service ratings vary by region, and it placed just under the industry average in claims satisfaction, according to JD Power. But if you’re dead-set on purchasing the least amount of insurance that you possibly need at the lowest price available, Geico is probably your best bet.
|State Farm at a Glance|
4 out of 5 stars
|Affordability||4 out of 5 stars|
|Tools and Features (e.g., mobile bill pay)||5 out of 5 stars|
|Customer Satisfaction||4 out of 5 stars|
|Discounts (e.g., good driving)||4 out of 5 stars|
State Farm had a lower overall score than Geico but wound up in the top three a total of 38 times (Geico only placed 37 times). When State Farm placed, it usually fell between $30 and $50 dollars of the competition. However, it occasionally surprised with a Geico-like rate: In Minnesota, State Farm was $120 cheaper than American Family, and in South Carolina it beat Geico by a whopping $223 a year.
Quotes aside, State Farm is the nation’s largest auto insurer. It ranks consistently well for customer satisfaction in most of the regions J.D. Power surveys. It also earns A.M. Best’s top marks (A++) for financial strength. Plus, it has the best tools of any auto insurance provider out there, including mobile bill pay, mobile claim filing and a pay-by-bank account option. All that is to say it’s a great choice if you can spare a few extra dollars each month.
|Progressive at a Glance|
3.5 out of 5 stars
|Affordability||3 out of 5 stars|
|Tools and Features (e.g., mobile bill pay)||4 out of 5 stars|
|Customer Satisfaction||4 out of 5 stars|
|Discounts (e.g., good driving)||3.5 out of 5 stars|
Progressive was the cheapest option in only seven states, and even when it was, it was usually less than $20 ahead of the runner-up (usually Geico). That doesn’t mean Progressive is never a viable option, though.
Consider the state of Montana, where Progressive came in just $22 more for the year. For less than $2 more each month, a Montana driver could take advantage of mobile claims filing, loyalty discounts, prepay discounts and low-mileage discounts that Geico doesn’t offer.
How to find cheap car insurance
Certain factors that affect your car insurance rates are largely beyond your control. These include basic demographics such as your age, gender, marital status, location and job.
But other factors, including how you manage your credit and what and how you drive, are easier to change. So, comparison shop, exploit discounts and consider bundling policies to find the cheapest car insurance companies.
It always pays to shop around for cheaper car insurance. Instead of wasting time making endless phone calls or filling out the same information on dozens of websites, save time by using an online quote tool. Online quote tools help you get a quick snapshot of potential rates from several auto-insurance companies at once.
More importantly, getting multiple auto insurance quotes helps you avoid becoming a victim to price optimization. Price optimization is the somewhat devious practice of establishing rates based not just on how risky a driver is to insure, but on how much insurance companies think they’re comfortable paying.
Earnix, a pricing analytics platform, found that 45% of larger insurance companies use this tactic to maximize their profits. According to the Insurance Information Institute, price optimization is rare, but 12% of insurers use it on auto insurance. These insurers mine and analyze a ton of personal data, like credit scores and web shopping habits, to determine how likely you are to leave them for another auto insurance company.
Getting new quotes regularly is the best way to avoid price optimization because, just like other personal data, insurers can see how often you shop around. The more you do it, the less likely they are to risk upping your premium and lose you as a customer.
Compare Affordable Car Insurance Rates
Many car insurance companies will give you a discount if you have other policies with them. For instance, you may get a break on car insurance if you use the same provider for life, home or renters insurance policies. Bundled policies are convenient too; you’ll be dealing with only one bill and one company.
A note of caution: Don’t automatically assume bundles will save you money. Companies that offer only auto insurance may offer compelling discounts to keep your business.
Boost your deductible
Your deductible is what you pay out of pocket before your insurance covers the rest of the cost to fix or replace your car. For example, if your deductible is $500 and a fender bender causes $2,000 in damage to your car, you’ll have to pay the first $500 and insurance will only cover the remaining $1,500. A plan with a $250 deductible will generally cost more than one with a $1,000 deductible because the insurance kicks in sooner.
However, raising your deductible is only a good move if you have cash stashed away to pay the higher deductible in case of a crash or other calamity. Also keep in mind that factors such as your age and driving record will 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 have the power to go extremely fast, and insurance companies know their drivers are more likely to get into trouble. These cars also cost a lot more to fix and are attractive targets for thieves — all situations your insurance company wants to avoid.
If you don’t have six figures to drop on a car, here’s some good news: Family-friendly vehicles including minivans, sedans and smaller SUVs cost the least to insure. Their drivers tend to be more careful, ultimately filing fewer claims. These vehicles are simpler to fix, and they aren’t as tempting for thieves.
Ultimately, the choice is yours, but a less-glamorous ride can help you nab cheap auto insurance.
Change Your Driving Habits
Insurance is all about risk. 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. Unfortunately, cleaning up a spotty driving record can take time.
Driving less is the simplest, easiest way to change your driving habits. Consider your options carefully. Can you carpool? Work from home? Use mass transit or even move closer to your job?
If using your car less is an unrealistic option for where you live, there are some simple safety techniques you can easily implement whenever you get into the car. First, eliminate all distractions. Many states have already outlawed texting and driving, but it can be so tempting to even look down at your phone when you receive a text or call. Apple recently included a driving mode in one of their latest software updates, and this feature is available in most phones either through the software or apps that you can download. This will eliminate the urge to look at your phone by turning off all notifications during your drive time.
Another good tip is to exercise patience and come to complete stops when necessary. A rolling stop is more likely to throw a wrench in your day if you’re going too fast and collide with an oncoming car. When you’re driving, try to relax and know that you’ll get to your point B much faster if you avoid any accidents.
All of these options can help you save money because less time behind the wheel means less chance of a claim. Tell your insurer about your new habits.
Maintain Good Credit
It may seem unfair, but the vast majority of car insurance companies look at your credit score to help determine your rate. If you have good credit, your insurer assumes you’ll be more responsible behind the wheel. Bad credit means you’re statistically more likely to file a claim, insurers say.
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 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.
The bottom line: 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
Each state has different requirements when it comes to car insurance. 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.
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|
|Alabama||Bodily injury liability, property damage liability||25/50/25|
|Alaska||Bodily injury liability, property damage liability||50/100/25|
|Arizona||Bodily injury liability, property damage liability||15/30/10|
|Arkansas||Bodily injury liability, property damage liability, personal injury protection||25/50/25|
|California||Bodily injury liability, property damage liability||15/30/5|
|Colorado||Bodily injury liability, property damage liability||25/50/15|
|Connecticut||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/20|
|Delaware||Bodily injury liability, property damage liability, personal injury protection||25/50/10|
|District of Columbia||Bodily injury liability, property damage liability, personal injury protection, uninsured motorist||25/50/10|
|Florida||Property damage liability, personal injury protection||10/20/10|
|Georgia||Bodily injury liability, property damage liability||25/50/25|
|Hawaii||Bodily injury liability, property damage liability, personal injury protection||20/40/10|
|Idaho||Bodily injury liability, property damage liability||25/50/15|
|Illinois||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/20|
|Indiana||Bodily injury liability, property damage liability||25/50/25|
|Iowa||Bodily injury liability, property damage liability||20/40/15|
|Kansas||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist, personal injury protection||25/50/25|
|Kentucky||Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist||25/50/25|
|Louisiana||Bodily injury liability, property damage liability||15/30/25|
|Maine||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist, medical payments||50/100/25|
|Maryland||Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist||30/60/15|
|Massachusetts||Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist||20/40/5|
|Michigan||Bodily injury liability, property damage liability, personal injury protection||20/40/10|
|Mississippi||Bodily injury liability, property damage liability||25/50/25|
|Missouri||Bodily injury liability, property damage liability, uninsured motorist||25/50/25|
|Montana||Bodily injury liability, property damage liability||25/50/20|
|Nebraska||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/25|
|Nevada||Bodily injury liability, property damage liability||25/50/20|
|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)|
|New Mexico||Bodily injury liability, property damage liability||25/50/10|
|New York||Bodily injury liability, property damage liability, personal injury protection, uninsured motorist,wrongful death||25/50/10|
|North Carolina||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||30/60/25|
|Ohio||Bodily injury liability, property damage liability||25/50/25|
|Oklahoma||Bodily injury liability, property damage liability||25/50/25|
|Pennsylvania||Bodily injury liability, property damage liability, personal injury protection||15/30/5|
|Rhode Island||Bodily injury liability, property damage liability||25/50/25|
|South Carolina||Bodily injury liability, property damage liability, uninsured motorist||25/50/25|
|South Dakota||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/25|
|Tennessee||Bodily injury liability, property damage liability||25/50/15|
|Texas||Bodily injury liability, property damage liability, personal injury protection||30/60/25|
|Utah||Bodily injury liability, property damage liability, personal injury protection||25/65/15|
|Vermont||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/10|
|Virginia||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/20|
|Washington||Bodily injury liability, property damage liability||25/50/10|
|West Virginia||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/25|
|Wisconsin||Bodily injury liability, property damage liability, uninsured motorist, medical payments||25/50/10|
|Wyoming||Bodily injury liability, property damage liability||25/50/20|
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.
Frequently asked questions
How can I get cheaper car insurance?
There are several ways that you can lower your monthly car insurance premiums. Start by shopping around for quotes to find a provider who can offer you the best price. You can also opt for a higher deductible, which will lower your monthly rates. 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.
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 rates for all drivers across the board. The most affordable insurer 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.