How to Get Low-Income Car Insurance and Save

California, New Jersey, Hawaii, and Maryland offer government low income car insurance programs. If you live in one of these states, your program costs less than $400 per year and may be free. If you don't live in one of these states, skip to the next section.

If you don't live in California, New Jersey, Hawaii, or Maryland, you can find affordable coverage even on a low income.  Car insurance don't price your coverage based on your income but on your risk level. Low income car insurance rates start as low as $18 per month for minimum coverage and increase as you add more liability coverage and full coverage that protects your car.

Insurance companies charge different prices for identical coverage. Shopping around saves most low income drivers $30 to $50 every month. 

Get quotes from at least three companies. Include GEICO and Kemper, which rank as two of the cheapest nationally. Then add one regional company that operates in your state to see if they are cheaper. Spending 30 minutes on quotes saves you hundreds of dollars per year. This is your biggest opportunity to cut costs.

GEICO offers the cheapest minimum liability coverage in 15 states for low-income drivers. Smaller regional insurers often provide competitive rates, with Erie Insurance ranking cheapest in five states and Farm Bureau leading in four states. For drivers who want additional financial protection, full coverage rates show GEICO as the most affordable in 10 states, with Erie Insurance securing five states and Auto-Owners ranking cheapest in four states.

*NOTE: These rates are based on a 40-year-old driver with good credit and no driving violations. USAA was not included in the rankings because it only caters to military families. For eligible customers, it may be a more affordable option.

State minimum liability coverage is the cheapest option if you are on a low income Your state requires you to have at least this much coverage. Buying more than the minimum raises your cost.

State minimums cover injuries and damage you cause to other people. They do not cover damage to your own car. This is important to understand: if you cause an accident, minimum liability will not pay to fix your vehicle. You pay for that out of pocket.

You will only get coverage for damage to your own car if you buy full coverage, which includes collision and comprehensive. Full coverage costs about two times more than minimum liability and is less affordable on a low income.

If you own your car and it's worth less than $5,000, minimum liability is all you need. If your car is financed or leased, your lender requires full coverage.

Your deductible is how much you pay out of pocket before insurance kicks in. Raising it from $500 to $1,000 lowers your monthly car insurance by 10 to 30 percent.

Only do this if you can set aside $1,000 in savings. Put that money in a separate savings account so it's there if you need it for an at-fault accident or claim.

When you buy insurance, the company asks how many miles you drive per year. Driving less miles is a great way to save if you have a low income. I

Be honest about your actual mileage. If you work from home, carpool, or use public transportation, your mileage is likely lower than average. Lower mileage means lower risk, so your rate will be more affordable to meet your budget.

Insurance companies offer discounts, but none specifically based on your income. Ask about any you might qualify for before you buy.

Common discounts include good driver discounts if you have a clean record, safety feature discounts if your car has anti-lock brakes or airbags, and automatic payment discounts. Ask what applies to you. You may save 5 to 15 percent with one or two discounts.

Credit history is one of the biggest factors in your rate and make it harder for low income drivers to get a low car insurance rate. You can't fix credit overnight, but here's what works: Pay all bills on time, keep credit card balances below 30% of your limit, and check your credit report for errors. As your score improves over time, your car insurance rate drops.

A clean driving record also saves you money. Accidents and traffic violations increase your rate for three to five years. The best way to keep costs down is to avoid violations and accidents.

Note: California, Hawaii, Massachusetts, and Michigan don't allow insurers to use credit scores.

If you drive under 400 miles per month, pay-per-mile insurance saves you 20 to 40 percent compared to standard insurance making it more affordable for low income drivers. You pay a small monthly fee plus a charge for each mile you actually drive. 

Nationwide SmartMiles (40 states) and Metromile (8 states) are your best options. Nationwide charges about $0.05 to $0.12 per mile with a 250-mile daily cap and safe driving discounts up to 10 percent. Metromile charges $0.08 to $0.14 per mile.

We answer common questions to help low-income drivers find the most affordable car insurance provider and the best deal.

We analyzed 83,056 quotes from 46 insurance providers across 473 ZIP codes using data from state insurance departments and Quadrant Information Services. Our sample reflects real-world pricing in communities where low-income drivers live, not just affluent areas.

We collected quotes for two coverage levels: minimum coverage (meets state requirements) and full coverage (100/300/100 liability plus comprehensive and collision with a $1,000 deductible). We focused on insurers offering consistent affordability across states, not temporary promotions that disappear at renewal.

Beyond traditional insurance, we researched government assistance programs in California, Hawaii, New Jersey and Maryland..