Updated: October 3, 2024
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State Farm is MoneyGeek's top choice for low-income car insurance. For individuals with lower credit scores, Nationwide might offer the best rates. In the majority of states, State Farm stands out as the top insurer for low-income drivers.
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State Farm emerges as the leading choice for low-cost car insurance overall, with a MoneyGeek Best Score of 88 (out of 100) at $409 per year.
For drivers who aren't on the road often, pay-per-mile insurance emerges as a modern solution, offering cheap car insurance by charging based on actual miles driven.
Several states offer government-funded car insurance assistance programs for low-income drivers, ensuring they get the coverage they need without overspending.
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MoneyGeek found that, on a national level, State Farm offers the best liability-only car insurance for low-income drivers:
State Farm offers a variety of discounts to low-income drivers, including discounts for good student drivers, drivers with multiple vehicles, and drivers who have taken a defensive driving course. State Farm also offers a low-mileage discount for drivers who don't drive very much.
State Farm stands out as a preferred choice for low-income drivers, offering diverse discount opportunities. The company offers a range of tailored discounts, including rewards for academic achievements through their good student discounts. Households with multiple vehicles can benefit from multi-vehicle discounts, and those who take the initiative to enhance their driving skills can benefit from defensive driving course discounts.
State Farm offers flexible payment options, ensuring that everyone can find a plan that aligns with their budget. For a minimal fee, roadside assistance can be added, offering peace of mind for scenarios like flat tires or dead batteries. State Farm also offers a low-mileage discount for drivers who don't drive much.
GEICO is another great choice for low-income drivers with its extensive range of discounts and competitive rates. They offer savings for good students, those with multiple policies, and drivers who pay their premiums in full. Additional discounts are available for those who've taken defensive driving courses, installed anti-theft devices, maintained a clean driving record, or bundled their car insurance with other GEICO policies like homeowners or renters insurance. Often cited as one of the most affordable car insurance providers, GEICO is a prime option for those aiming to maximize savings on their premiums.
| State Farm | 88 | $409 | $34 |
| Travelers | 88 | $504 | $42 |
| GEICO | 88 | $424 | $35 |
| Progressive | 86 | $514 | $43 |
| Nationwide | 86 | $462 | $38 |
| Farmers | 85 | $572 | $48 |
| Allstate | 84 | $604 | $50 |
When searching for low-cost car insurance, be wary of providers that offer cheap rates at the expense of service quality. The best insurance provider for you will depend on factors like your driving profile, habits, and location. Each insurer has its method for setting premiums, so you might get different quotes from various agents.
MoneyGeek evaluated car insurance options by considering customer satisfaction, affordability, coverage depth, claims processing, and company stability. Based on our research, we've identified companies that offer both affordability and quality service.
MoneyGeek found that Travelers and GEICO offer the best car insurance for low-income drivers with poor credit:
Travelers is a great option for low-income drivers with poor credit. They provide competitive rates gap insurance, offer accident forgiveness, minor violation forgiveness, and the IntelliDrive usage-based insurance program, which rewards safe drivers with discounts.
Travelers includes popular auto insurance add-ons like roadside assistance, new car replacement, gap insurance, and rental car or travel reimbursement. However, they don't provide deductible modification or better car replacement, unlike many other insurers.
GEICO is a cost-effective insurance provider for drivers with poor credit seeking liability-only car insurance due to its competitive rates and understanding approach to credit challenges.
According to the GEICO website, they assure customers that they will never deny insurance based on a credit-based insurance score. If a major life event heavily impacts your score, GEICO claims they will take that into consideration, ensuring it doesn't adversely affect your premiums.
With these customer-centric policies, combined with their extensive discounts and flexible payment plans, GEICO emerges as a top choice for many seeking affordable liability-only coverage.
| Travelers | 91 | $908 | $76 |
| State Farm | 90 | $1,114 | $93 |
| GEICO | 90 | $696 | $58 |
| Progressive | 89 | $905 | $75 |
| Farmers | 89 | $889 | $74 |
| Nationwide | 89 | $621 | $52 |
| Allstate | 88 | $897 | $75 |
Your income doesn't determine your insurance score. However, your credit score does. Where you reside, which can sometimes correlate with your income level, also influences your insurance costs.
But here's some good news for those with poor credit: There are proactive steps you can take to manage costs. By maintaining a clean driving record and taking advantage of available discounts, you can make a positive impact on your premiums. And with sound financial decisions and time, your credit score has the potential to improve, which could lead to more favorable insurance rates.
MoneyGeek found that State Farm offers the best low-income car insurance across 16 states. Auto-Owners Insurance ranks second with the best offering across eight states.
| Alabama | Cincinnati Insurance | $201 | $17 |
| Alaska | State Farm | $322 | $27 |
| Arizona | Auto-Owners Insurance Co | $346 | $29 |
| Arkansas | State Farm | $232 | $19 |
| California | AAA California | $355 | $30 |
| Colorado | American National P&C | $216 | $18 |
| Connecticut | Amica Mutual | $442 | $37 |
| Delaware | Travelers | $464 | $39 |
| District of Columbia | Chubb | $372 | $31 |
| Florida | GEICO | $485 | $40 |
| Georgia | Auto-Owners Insurance Co | $311 | $26 |
| Hawaii | GEICO | $217 | $18 |
| Idaho | American National P&C | $127 | $11 |
| Illinois | Country Financial | $247 | $21 |
| Indiana | Westfield | $258 | $22 |
| Iowa | Westfield | $184 | $15 |
| Kansas | Auto-Owners Insurance Co | $291 | $24 |
| Kentucky | Cincinnati Insurance | $258 | $22 |
| Louisiana | State Farm | $498 | $41 |
| Maine | State Farm | $245 | $20 |
| Maryland | Erie | $599 | $50 |
| Massachusetts | Chubb | $337 | $28 |
| Michigan | Chubb | $375 | $31 |
| Minnesota | Westfield | $320 | $27 |
| Mississippi | State Farm | $297 | $25 |
| Missouri | State Farm | $394 | $33 |
| Montana | State Farm | $168 | $14 |
| Nebraska | American National P&C | $138 | $12 |
| Nevada | Capital Insurance Group | $484 | $40 |
| New Hampshire | State Farm | $247 | $21 |
| New Jersey | Amica Mutual | $418 | $35 |
| New Mexico | State Farm | $254 | $21 |
| New York | Erie | $819 | $68 |
| North Carolina | Erie | $300 | $25 |
| North Dakota | Auto-Owners Insurance Co | $289 | $24 |
| Ohio | Erie | $175 | $15 |
| Oklahoma | State Farm | $214 | $18 |
| Oregon | Country Financial | $395 | $33 |
| Pennsylvania | Erie | $237 | $20 |
| Rhode Island | State Farm | $344 | $29 |
| South Carolina | Auto-Owners Insurance Co | $396 | $33 |
| South Dakota | Auto-Owners Insurance Co | $226 | $19 |
| Tennessee | Auto-Owners Insurance Co | $207 | $17 |
| Texas | Texas Farm Bureau | $339 | $28 |
| Utah | Auto-Owners Insurance Co | $399 | $33 |
| Vermont | American Family | $212 | $18 |
| Virginia | Cincinnati Insurance | $356 | $30 |
| Washington | Chubb | $453 | $38 |
| West Virginia | Erie | $303 | $25 |
| Wisconsin | Erie | $239 | $20 |
| Wyoming | GEICO | $176 | $15 |
The state you reside in plays a pivotal role in your car insurance costs. Each state has its own insurance regulations and minimum coverage requirements, which can directly influence premiums. For instance, no-fault states might have different rates than those using a "tort" system. Additionally, areas with higher risks, be it due to more accidents, thefts, or natural disasters, often see elevated rates.
When hunting for the cheapest car insurance in your state, you should compare the same coverage across different insurers. Different coverage levels can drastically affect the price, so ensure you're looking at identical policies to see which is the most cost-effective.
Non-owner and pay-per-mile car insurance can offer cost-effective ways to stay insured. By aligning insurance costs more closely with actual vehicle usage, these options can be more affordable and tailored to individual needs.
Non-Owner Car Insurance
Non-owner car insurance typically costs less than standard auto insurance because it only provides liability coverage. It doesn't cover damages to the car you're driving since it's assumed you don't own a vehicle.
This type of insurance is perfect for those who occasionally drive but don't own a car. Whether you're borrowing a friend's vehicle or renting one, non-owner insurance ensures you're covered without the need for a full auto policy.
Having continuous insurance coverage can prevent you from being penalized for lapses in coverage. This can be beneficial when you decide to purchase a car and a full insurance policy in the future.
Pay-Per-Mile Car Insurance
As the name suggests, with pay-per-mile insurance, you're charged based on the miles you drive. If you're a low-mileage driver, this can result in significant savings compared to a traditional policy.
Knowing that you're being charged by the mile can be an incentive to drive less, which not only saves money on insurance but also on fuel and vehicle wear and tear.
These policies often come with modern telematics devices that monitor your mileage accurately, ensuring you're billed correctly. Some of these devices can also provide feedback on driving habits, potentially helping you become a safer driver.
Some states, like California and Hawaii, offer more ways to get car insurance for low-income drivers.
Eligibility rules for these state-funded car insurance programs can change frequently. So, if you're considering tapping into these resources, it's a smart move to check in with your local offices regularly.
If you are a low-income driver in need of assistance, these programs offer an affordable route to meet state-mandated minimum car insurance requirements without straining your finances.
To help you make an informed purchase, MoneyGeek answers common questions about the best providers for low-income car insurance.
It doesn’t — but related factors like your address and credit score do affect your insurance. Legally, car insurance companies are not allowed to charge you based on your income level. But poor credit scores could explain why your insurance is expensive.
The best liability-only car insurance for low-income drivers is State Farm at $409 per year or $34 per month.
Yes, some states do. If you need help with car insurance, here are some state-funded programs:
About Mark Fitzpatrick
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
