Updated: April 14, 2025
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State Farm and GEICO offer some of the cheapest car insurance for low-income drivers, with average premiums of $409 and $424 annually, respectively.
California, New Jersey and Hawaii have state-funded programs with specific eligibility requirements to help low-income drivers access affordable car insurance.
Low-income drivers can save by purchasing enough insurance to cover their risks and avoiding coverages they don’t need.
California, New Jersey and Hawaii have government programs to help low-income drivers afford auto insurance. If you live in one of these states, consider these options.
These low-income car insurance programs typically have eligibility requirements linked to the federal poverty level, which changes yearly. Check if your income qualifies before applying.
The CLCA is a low-income car insurance policy in California. Good drivers within 250% of the federal poverty limit may qualify for this program. It provides liability insurance for a vehicle’s primary driver and eligible secondary drivers.
To qualify, you must:
Liability coverage limits are 10/20/3, meaning $10,000 bodily injury liability per person, $20,000 bodily injury liability per accident and $3,000 property damage liability per accident. These limits are lower than typical California requirements but better than driving without insurance.
The SAIP, also called the Dollar-a-Day program, is a low-income car insurance option in New Jersey. It provides medical-only coverage for low-income drivers. To qualify, you must be enrolled in federal Medicaid with hospitalization.
The SAIP covers emergency medical treatment up to $250,000 after a car crash. It also provides a $10,000 death benefit if the accident is fatal. It doesn't provide liability insurance or cover doctor's visits beyond initial treatment.
If you need low-income car insurance in Hawaii, the state offers the AABD program. This can help you get financial assistance for auto insurance, but you must meet one of these requirements:
If you qualify, auto insurance is free.
While Maryland has no low-income car insurance program, the Maryland Automobile Insurance Fund offers coverage to drivers whose applications have been rejected at least twice by private insurers.
Drivers can qualify if they:
USAA offers the best value for military members, veterans and their families. Policies meeting minimum state requirements cost low-income drivers an average of $283 annually, the lowest in the industry, with excellent customer service. USAA also provides personalized financial advice. The only drawback is that nonmilitary members can't join.
State Farm charge low-income drivers an average of $409 per year, the cheapest option for all drivers. It also offers various discounts. With more than 19,000 agents nationwide, finding one near you is easy.
GEICO offers some of the cheapest car insurance rates in almost every state, even for drivers with poor credit. Minimum coverage costs low-income drivers an average of $424 per year, among the cheapest available options. You can get an online quote that explains all coverage details. Beyond its low rates, the company offers several discounts, including for active-duty military and veterans.
The cheapest car insurance is your state's minimum required liability coverage. But these limits are often too low to protect you in a serious accident. Most states require only $50,000 in bodily injury liability per accident.
Liability limits appear as three numbers, like 50/100/50, which means:
You must pay the difference if damages exceed your limits. For example, if someone needs $75,000 in medical care but you have only $50,000 in coverage, you'd owe $25,000.
Adding collision and comprehensive insurance provides full coverage, protecting your car, too. It costs about $300 to $500 more yearly but offers better protection. Full coverage is required for leased or financed cars but is worth considering for any vehicle.
Average annual costs:
Check how much minimum vs. full coverage costs in your state below.
| Alabama | $859 | $365 |
| Alaska | $892 | $426 |
| Arizona | $1,096 | $522 |
| Arkansas | $931 | $382 |
| California | $1,378 | $599 |
| Colorado | $998 | $443 |
| Connecticut | $1,345 | $703 |
| Delaware | $1,708 | $1,017 |
| Florida | $1,627 | $803 |
| Georgia | $933 | $459 |
| Hawaii | $816 | $363 |
| Idaho | $661 | $303 |
| Illinois | $924 | $390 |
| Indiana | $733 | $354 |
| Iowa | $794 | $253 |
| Kansas | $1,048 | $419 |
| Kentucky | $1,009 | $486 |
| Louisiana | $1,477 | $588 |
| Maine | $723 | $354 |
| Maryland | $1,159 | $674 |
| Massachusetts | $1,049 | $456 |
| Michigan | $1,786 | $919 |
| Minnesota | $1,059 | $486 |
| Mississippi | $939 | $410 |
| Missouri | $1,334 | $594 |
| Montana | $961 | $318 |
| Nebraska | $980 | $377 |
| Nevada | $1,557 | $838 |
| New Hampshire | $942 | $459 |
| New Jersey | $1,491 | $828 |
| New Mexico | $974 | $411 |
| New York | $2,078 | $1,170 |
| North Carolina | $871 | $428 |
| North Dakota | $785 | $328 |
| Ohio | $737 | $360 |
| Oklahoma | $944 | $379 |
| Oregon | $1,121 | $642 |
| Pennsylvania | $1,023 | $385 |
| Rhode Island | $1,128 | $609 |
| South Carolina | $1,286 | $664 |
| South Dakota | $957 | $294 |
| Tennessee | $852 | $345 |
| Texas | $1,198 | $562 |
| Utah | $965 | $530 |
| Vermont | $677 | $277 |
| Virginia | $955 | $455 |
| Washington | $1,070 | $584 |
| Washington, D.C. | $1,208 | $552 |
| West Virginia | $1,051 | $474 |
| Wisconsin | $906 | $378 |
| Wyoming | $876 | $264 |
Insurers don't use income to set rates, but they consider factors often linked to income, such as ZIP code, education and credit history (except in California, Hawaii, Massachusetts and Michigan).
Sports cars cost more to insure, and low-income drivers may face higher rates due to coverage gaps or more frequent claims.
Common rating factors include:
Some insurers use credit history or credit-based insurance scores to set rates. They believe drivers with low credit scores file more claims.
However, some states consider this discriminatory. If you live in California, Massachusetts, Michigan or Hawaii, insurance companies can't use your credit history when determining rates. In other states, your credit will affect your premium. You can still find affordable car insurance for drivers with poor credit.
Credit score categories:
The average credit score is 714, according to Experian.
| Nationwide | $901 | $75 | $1,218 | $102 |
| Farmers | $1,045 | $87 | $1,599 | $133 |
| State Farm | $787 | $66 | $2,166 | $180 |
| Progressive | $985 | $82 | $1,766 | $147 |
| Travelers | $936 | $78 | $1,578 | $132 |
| USAA | $614 | $51 | $1,105 | $92 |
| GEICO | $795 | $66 | $1,317 | $110 |
| Allstate | $1,008 | $84 | $1,537 | $128 |
Finding affordable car insurance for low-income drivers is challenging but possible. The simplest way to save money is to shop around. This step alone can lead to significant savings, so don't skip it.
Here are some other ways to save:
Some cars cost less to insure than others. Luxury vehicles have expensive repair costs and higher insurance rates. High-performance sports cars always cost more to insure because insurance companies link them with riskier driving. Cars like the Subaru Outback or Ford Escape are among the cheapest vehicles to insure, according to Car and Driver.
Comparing quotes from different providers shows you all your options, letting you pick the best one for your situation. To save time, use a car insurance calculator to estimate your policy cost and look for offers that are lower or close to that amount.
Most car insurance companies offer multiple discounts. Good driver discounts can save you up to 30% on your premium. Other discounts save less money but still help, and many different types are available.
You must buy at least your state's minimum required liability insurance. However, these requirements are often very low, so consider the next level of liability coverage if possible.
You probably don't need full coverage if your car is worth only a few thousand dollars. You can also save money by dropping roadside assistance and rental car insurance.
Good drivers might save with a usage-based policy. Insurers track driving habits like speed, braking and mileage through a mobile app or device. Safe driving can lower your rate — risky behavior can raise it.
If you drive infrequently, look into low-mileage plans that charge based on how much you drive.
Availability varies by state, so check with your insurer for options and details on how your data is used.
A defensive driving course can earn you a discount, especially if you’ve had a clean record for at least three years. Check with your insurer first — some accept only approved courses.
Even without a discount, the skills you learn can help you avoid accidents and lower your rates over time.
Good drivers pay less for car insurance. A speeding ticket can increase your premium by hundreds of dollars yearly for at least three years.
If you struggle to pay for insurance, drive carefully. Pay attention to the road: distracted driving kills eight people daily and injures over a thousand across the U.S. Remember that texting while driving is considered distracted driving, and a citation for it can raise your premium.
Unless you live in a state that doesn't consider credit history (California, Massachusetts, Michigan and Hawaii), raising your credit score will save you money on car insurance. You can improve your credit score over time by paying down debts, making on-time credit card payments and increasing the length of your credit history.
While you might consider canceling your policy and buying again when your budget allows, this approach can backfire. Insurance companies check for policy lapses and typically charge higher premiums when you return. In the long run, it's better to maintain continuous coverage to avoid premium increases.
Insurance companies offer many auto insurance discounts to help customers save money. These include discounts for students, senior citizens and safe drivers. Not all companies offer the same discounts — some provide more options than others.
If you can pay your premium in full, you can usually save between 5% and 15% a year, depending on the company. You can also get a discount for going paperless or enrolling in autopay.
But if you can't pay your insurance in full and upfront, ask the insurer if it offers a no-down-payment policy and pay your premium monthly.
Teachers, physicians and police officers may qualify for a discount since these occupations file fewer claims statistically. Insurers also offer discounts for federal employees, engineers and first responders, such as nurses. Many providers also have special discounts for military personnel.
Some insurers offer car insurance discounts for students with specific requirements. Students with at least a B average or 3.0 GPA can often qualify for good student discounts. These discounts typically save between 10% and 15%. You must provide a transcript or report card yearly to prove eligibility.
Bundling home and auto insurance, or combining renters and auto insurance with the same company, can earn you discounts on both policies. This rewards your loyalty and could save you up to 20%.
The easiest way to save on car insurance is to have a safe driving record. People with poor driving histories pay more.
You likely qualify as a good driver if you haven't caused an accident or received a ticket in the past three years. Insurance companies want customers like you, so compare rates from different providers. Taking a defensive driving course might earn you additional discounts.
"While attending traffic school will keep a ticket off your state's motor vehicle record point system, it may not prevent a three-year surcharge on your insurance premium. All moving violations are reported to insurers, who decide your rate increase. Traffic school attendance might reduce this increase.
Add accident forgiveness to your policy to prevent an at-fault accident from raising your premium. This could prevent a rate increase after your first at-fault accident. Some insurers like GEICO and Progressive offer this benefit for free." — Mark Friedlander, Director, Corporate Communications, Insurance Information Institute
Some nonprofit initiatives and insurer-led discount programs help low-income drivers find affordable car insurance. These programs target underserved communities. Availability and eligibility requirements differ by location, so research what's available in your area.
Citizens United Reciprocal Exchange is a nonprofit insurance company available through two subsidiaries: CURE Auto Insurance and NJ PURE for medical malpractice insurance.
CURE Auto Insurance might work for you if you live in New Jersey or Pennsylvania and have a good driving record. CURE considers only your driving history when preparing quotes — not your credit score, ZIP code, education or other factors. This makes it ideal if you have a good driving record but imperfect credit.
Besides being legally required in most states, car insurance helps drivers protect themselves financially after accidents. Maintaining coverage also helps drivers avoid premium increases from coverage lapses.
If staying insured is difficult due to financial strain, many charities and assistance programs can help. You can use Benefits.gov's utility and bill assistance programs, which cover various monthly bills like electricity, insurance or groceries. If medical debt is your problem, you can apply for medical debt relief programs to free up income for insurance and other bills. Use Need Help Paying Bill's charity locator to find financial assistance programs near you.
USAA offers the cheapest widely available car insurance for low-income drivers at an average of $283 per year for minimum coverage, but it's available only to military families. State Farm is the next best option at about $409 per year.
Comparing quotes is one of the easiest ways to save money. Lower premiums can free up funds for other essential expenses.
| USAA | $283 |
| State Farm | $409 |
| GEICO | $424 |
| Nationwide | $462 |
| Travelers | $504 |
| Progressive | $514 |
| Farmers | $572 |
| Allstate | $604 |
The cheapest option might sacrifice service quality when looking for affordable car insurance. Try to balance cost with quality. Look for providers with high customer satisfaction and competitive rates. Insurance isn't just a legal requirement but a financial safety net after accidents. While budget matters, make sure you're also getting reliable protection.
State Farm is the most affordable widely available insurer, ranking cheapest in 15 states (excluding USAA). GEICO offers the lowest rates in five states, while Erie and American National each rank cheapest in four states.
USAA is typically the most affordable option for military families and offers the lowest rates in 38 states for eligible customers.
These rates are based on a 40-year-old driver with poor credit. In Washington, D.C., two insurers tie for the lowest premium. Check the table below to find the cheapest option in your state.
| Alabama | Cincinnati | $201 |
| Alaska | State Farm | $322 |
| Arizona | Mercury | $305 |
| Arkansas | State Farm | $232 |
| California | GEICO | $419 |
| Colorado | American National | $216 |
| Connecticut | GEICO | $319 |
| Delaware | Travelers | $464 |
| Florida | GEICO | $485 |
| Georgia | Auto-Owners | $311 |
| Hawaii | GEICO | $217 |
| Idaho | American National | $127 |
| Illinois | Mercury | $226 |
| Indiana | Auto-Owners | $228 |
| Iowa | State Farm | $144 |
| Kansas | Nationwide | $221 |
| Kentucky | Cincinnati | $257 |
| Louisiana | Louisiana Farm Bureau | $484 |
| Maine | Countryway | $221 |
| Maryland | Kemper | $538 |
| Massachusetts | State Farm | $221 |
| Michigan | Travelers | $101 |
| Minnesota | Westfield | $317 |
| Mississippi | Direct General | $275 |
| Missouri | State Farm | $388 |
| Montana | State Farm | $168 |
| Nebraska | American National | $138 |
| Nevada | CSAA | $444 |
| New Hampshire | State Farm | $247 |
| New Jersey | GEICO | $428 |
| New Mexico | State Farm | $254 |
| New York | Kemper | $464 |
| North Carolina | Nationwide | $242 |
| North Dakota | Nodak | $190 |
| Ohio | Erie | $176 |
| Oklahoma | State Farm | $215 |
| Oregon | State Farm | $381 |
| Pennsylvania | Erie | $238 |
| Rhode Island | State Farm | $344 |
| South Carolina | American National | $251 |
| South Dakota | Farmers Mutual of Nebraska | $207 |
| Tennessee | Auto-Owners | $207 |
| Texas | State Farm | $321 |
| Utah | Farmers Union | $388 |
| Vermont | State Farm | $198 |
| Virginia | American Family | $243 |
| Washington | PEMCO | $262 |
| Washington, D.C. | GEICO | $372 |
| Washington, D.C. | Chubb | $372 |
| West Virginia | Erie | $303 |
| Wisconsin | Erie | $230 |
| Wyoming | GEICO | $176 |
State minimum policies don't include comprehensive and collision insurance, which pays for damage to your car. Full coverage costs more, but low-income drivers with valuable cars should consider this extra expense for better financial protection. The best way to save money on car insurance is to compare quotes from different companies.
Drivers with the federal low-income designation of $20,385 spend about 2% of their income on a GEICO state minimum policy. Someone earning the median household income of $70,784 pays just 0.6% for the same coverage.
Company | Annual Premium | Share of Federal Low-Income Designation ($20,385 per year) | Share of Median US Household Income ($70,784 per year) |
|---|---|---|---|
USAA | $283 | 1.4% | 0.4% |
GEICO | $424 | 2% | 0.6% |
Nationwide | $462 | 2.7% | 0.65% |
Travelers | $504 | 2.5% | 0.7% |
Progressive | $514 | 2.5% | 0.73% |
Allstate | $604 | 3% | 0.85% |
State Farm | $409 | 2% | 0.58% |
Farmers | $572 | 2.8% | 0.8% |
Insurance companies classify neighborhoods differently and weigh various factors in their own ways. Shop around to find the best car insurance if you have a low income.
This page explains how low-income drivers can find affordable car insurance through state programs, discounts and budget-friendly companies like State Farm and GEICO. While income doesn't directly affect premiums, location and credit can impact rates. Shopping for minimum coverage and using discounts helps low-income drivers stay insured affordably.
MoneyGeek answers frequently asked questions to help low-income drivers find the most affordable car insurance provider and the best deal.
State Farm offers the most affordable auto insurance for most drivers, but this can change based on your needs, such as if you're a young driver, a military member or a driver with an at-fault accident.
According to MoneyGeek's analysis, the Subaru Forester is the most affordable car to insure, whether used or new. It's also the cheapest SUV.
Finding the cheapest car insurance quotes requires comparing different providers. Since this can take time, MoneyGeek created a car insurance calculator. Enter your details to get quick estimates that can guide your research.
Getting cheap auto insurance has risks. While it costs less, it may not provide enough financial protection in an at-fault accident. With only minimum liability limits, you could pay thousands of dollars for your medical bills and repairs. You might also have to cover the other party's expenses out of pocket if your coverage isn't adequate (except in no-fault states).
Why Trust MoneyGeek?
MoneyGeek collected quote data from state insurance departments and Quadrant Information Services to find the most affordable car insurance companies for low-income drivers nationwide and by state. We also researched low-income car insurance assistance programs and financial aid options to help readers find solutions that fit their budgets.
Study Overview
We analyzed auto insurance rates for low-income drivers at the state and national levels. We used various insurance companies and coverage types with our sample driver profile to calculate average premiums for low-income drivers in each state.
Data Sources and Depth
We gathered auto insurance information from state insurance departments and Quadrant Information Services. MoneyGeek reviewed about 83,056 quotes from 46 insurance providers across 473 ZIP codes.
Driver Profile
To establish a baseline for auto insurance premiums, MoneyGeek used an average driver profile with these traits:
We adjusted this profile based on premium-influencing factors like age, driving history, state, ZIP code and average mileage.
Coverage Levels and Deductibles Explained
Your chosen coverage level affects your insurance rates. Full coverage, which includes comprehensive and collision coverage, costs more but provides the most financial protection. Minimum coverage is the cheapest option but offers the least protection.
MoneyGeek used state minimum requirements and 100/300/100 liability limits when collecting data for minimum and full coverage policies. The full coverage policy has a $1,000 deductible for comprehensive and collision coverage. After an at-fault accident or non-collision incident, you pay this deductible before your insurance covers vehicle damage.
100/300/100 means:
Learn more about MoneyGeek's methodology.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
