Car insurance is required in every U.S. state except New Hampshire, so almost every driver must carry a policy. MoneyGeek has ranked the cheapest car insurance companies for low-income drivers by state and at the national level. If you’re a California, Hawaii or New Jersey resident, you may qualify for a government-sponsored program to help low-income drivers get affordable insurance.

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Key Takeaways

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Income isn’t a factor used in calculating your car insurance rates, and you can save by shopping around between companies.

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There are state-funded programs in California, Hawaii and New Jersey to help low-income drivers find affordable policies.

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Low-income drivers can save by purchasing enough insurance to cover their risks and avoiding coverages they don’t need.

Cheapest Car Insurance Companies for Low-Income Drivers by State

The cheapest car insurance policies for low-income drivers are ones that only meet the minimum liability coverage requirements of your state. But coverage requirements differ in each state, which means that the cheapest liability-only car insurance for you depends on your location.

Excluding USAA, MoneyGeek found that the cheapest widely-available minimum car insurance company in most states is State Farm, which was the cheapest option on average in 15 states. GEICO was also widely affordable, ranking as the cheapest in five states, while Erie comes in third, ranking as the most affordable insurer in four states. American National P&C also ranks as the cheapest in four states.

Military families who are eligible for USAA may find it's the cheapest insurer for military drivers overall and the cheapest in 38 states for those who qualify.

Quotes below are for a 40-year-old driver with a poor credit score. Find your state in the table below to see the applicable annual premium. In the District of Columbia, there are two car insurance providers that tie for offering the cheapest rate.

Cheapest by State for Low-Income Drivers (Excluding USAA)
Annual Premium


Cincinnati Insurance



State Farm






State Farm






American National P&C








State minimum policies do not include comprehensive and collision insurance, which covers the costs of damages to your car. A full coverage policy is more expensive, but low-income drivers with valuable cars should consider paying the extra cost to ensure they’re fully covered. The easiest way to save money on car insurance is to shop around and compare quotes.

Cheapest Car Insurance Companies for Low-Income Drivers Nationally

For low-income drivers looking for the cheapest car insurance companies that are widely available, MoneyGeek calculated the average cost of car insurance on a national level. If you’re eligible, USAA is the cheapest overall, as policies meeting state minimums cost an average of $283 per year.

State Farm is the runner-up, with minimum coverage policies costing an average of $409 per year.

Shopping around is a great way for low-income drivers to save money on car insurance. If you’re saving hundreds of dollars per year on car insurance, you can allocate a bigger share of your income to other needs.

Cheapest Car Insurance Companies for Low-Income Drivers - National
Annual Premium



State Farm















If you currently serve in the armed forces, are a veteran or a family member of a service member, it’s hard to beat USAA. Policies meeting minimum state requirements cost low-income drivers an average of $283 per year, the lowest in the industry, and customer service is top-notch. USAA provides personalized financial advice as well. The biggest drawback is that non-military members are not eligible.

State Farm

State Farm charged our sample low-income driver an average of $409 per year, the cheapest company that all drivers are eligible for, and it also has a variety of discounts available. With more than 18,000 agents nationwide, it’s easy to find one near you.


GEICO offers some of the cheapest car insurance rates in almost every state, even for drivers with poor credit. A minimum coverage policy costs low-income drivers an average of $424 per year, among the cheapest of available companies. In addition to the already low rates, the company has a number of discounts available. You can get a quote online that will explain everything the coverage provides.

State-Funded Low-Income Car Insurance Programs

California, New Jersey and Hawaii have government-sponsored programs to help low-income drivers afford insurance. They’re worth looking into if you live in one of these states.

However, keep in mind that low-income car insurance programs typically have eligibility requirements associated with the federal poverty level (FPL), which changes yearly. If you are interested in these programs, check to see if your income qualifies before applying.

California's Low-Cost Automobile Insurance Program (CLCA)

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:

  • Have a valid California driver’s license
  • Have a good driving record
  • Meet income eligibility requirements
  • Be at least 16 years old
  • Own a car valued at less than $25,000

Coverage limits are 10/20/3. It is lower than typical California liability limits but better than driving without insurance.

New Jersey's Special Automobile Insurance Policy (SAIP)

The Special Automobile Insurance Policy (SAIP) is a form of low-income car insurance in New Jersey, otherwise known as the dollar-a-day program. It provides medical-only coverage for low-income drivers. You must be enrolled in federal Medicaid with hospitalization to qualify.

The SAIP covers emergency medical treatment after a car crash, up to $250,000. It also provides a $10,000 death benefit if that accident results in death. It does not provide liability insurance or cover you for doctor’s visits beyond the initial treatment.

Hawaii's Aid to the Aged, Blind and Disabled Program (AABD)

If you’re looking for low-income car insurance in Hawaii, the state offers a program called the Assistance to the Aged, Blind and Disabled (AABD). This can help you get financial assistance for auto insurance, but you must meet one of the following requirements:

  • Be 65 or older
  • Be legally blind
  • Be totally and permanently disabled
  • Live with or provide care to someone who receives AABD assistance
  • Have an income below 34% of the current Federal Poverty Level

If you qualify, auto insurance is free.

Maryland Automobile Insurance Fund

While there is no program for low-income car insurance in Maryland, the Maryland Automobile Insurance Fund offers insurance to drivers whose automobile insurance applications have been rejected at least twice. In particular, drivers can qualify if they:

  • Have had a policy be canceled
  • Have been rejected by two or more insurance companies for coverage
  • Have little to no credit
  • Have traffic violations
  • Have a history of lapses in paying for past policies
  • Are a high-risk driver

How Much Does Car Insurance Cost for Drivers With a Low Income?

Insurance companies don’t factor in driver income when calculating insurance rates, so drivers don’t pay more for car insurance just because they have lower incomes. But low-income drivers pay a higher percentage of their income toward their car insurance bill. As the table below illustrates, the less money you make, the greater share of your income goes towards your car insurance bill.

For example, a driver making $20,385 a year, the federal low-income designation, will pay 2% of their budget for a GEICO policy only meeting state minimum requirements. If the same driver were making the country’s median household income, which is $70,784 per year pretax, they would only pay 0.6% of their budget toward car insurance for the same policy.

Car insurance may be heavy on the budget now, but it’s not wise to cancel it to save money, thinking you’ll pick it up again when you can afford it. Insurance companies will charge a penalty if you lapse in insurance coverage, so you will pay more in the long run.

Minimum Liability Car Insurance Rates as a Share of Driver Budgets
  • Company
    Annual Premium
    Share of Federal Low-Income Designation ($20,385 per year)
    Share of Median US Household Income ($70,784 per year)
  • USAA








  • Nationwide




  • Travelers




  • Progressive




  • Allstate




  • State Farm




  • Farmers




Insurance companies differ in how they categorize different neighborhoods and weigh different factors, so it’s still important to shop around to get the best car insurance for you if you have a low income.

What Level of Coverage Do I Need If I Have a Low Income?

Your state’s minimum required amount of liability insurance is the least expensive option. But depending on your state, the liability coverage may be quite low and may not provide the coverage you need. For instance, most states only cover you for $50,000 in bodily injury liability costs per accident.

Coverage limits on auto insurance policies are typically presented as three numbers with slashes, such as 50/100/50. This represents:

  • $50,000 per person for bodily injury coverage
  • $100,000 maximum for all personal injuries caused by the incident
  • $50,000 for property damage coverage

If you are found at fault in an incident that resulted in injuries that were more expensive than what your policy covers, you may be personally responsible for paying the remaining amount to cover the cost of the settlement. For example, if one individual in the car you hit needs medical care that costs $75,000 but you only have $50,000 in bodily injury coverage, you would be responsible for paying the additional $25,000 to cover their medical expenses.

Adding collision and comprehensive insurance, also known as a full coverage policy, will be more expensive but offers the best protection. A liability-only policy will only cover the cost of damage and injury to the other car and those riding in it. A full coverage policy will also cover the cost of injuries and damages to your vehicle and passengers. Companies tend to charge an extra $300 to $500 per year to add these coverages. This will only be required if you have a loan or lease on the car, but many drivers should consider buying it even if they aren't required to.

At a national level, the costs of car insurance by policy type and coverage are as follows:

  • A state minimum liability-only policy will cost $471 per year.
  • A state minimum full coverage policy will cost $909 per year.
  • A 100/300/100 liability-only policy will cost $582 per year.
  • A 100/300/100 full coverage policy will cost $1,021.

Use the table below to compare the cost of full or minimum coverage in your state.

Average Annual Premiums by Coverage and State
Average Annual Premium
Average Monthly Premium


Minimum Coverage




Full Coverage




Minimum Coverage




Full Coverage




Full Coverage




Minimum Coverage




Minimum Coverage




Full Coverage



Factors That Impact Your Car Insurance Rates

Your income isn’t a factor in determining your car insurance rates. However, car insurance companies do consider a lot of factors that tend to correlate with income, such as where you live and your level of education.

What type of car you drive will impact your insurance rates. High performance, flashy sports cars are always more expensive to insure, as drivers of these cars tend to take more risks.

One reason people with higher incomes tend to get better rates is that they can afford to pay for damages out of pocket, so they don’t have to file a claim for every accident: fewer claims equals lower premiums.

Low-income drivers sometimes have gaps or lapses in their insurance coverage, and this can lead to higher rates. Insurance companies consider people with gaps in coverage as high risk because they think you were still driving even though you had no insurance during these times.

Other factors insurance companies consider are:

  • Vehicle
  • State and ZIP code
  • Age
  • Gender
  • Marital status
  • Driving history
  • Previous insurance coverage
  • Claims history
  • Credit score (except in California, Massachusetts and Hawaii)
  • Average mileage
  • Coverage type and deductibles

Does Your Credit Score Impact Your Car Insurance Cost?

Some insurance companies consider credit scores when determining rates. The reasoning is that drivers with low credit scores are more likely to file claims. However, some states have decided this is discriminatory. If you live in California, Massachusetts or Hawaii, insurance companies can’t consider your credit score as a determining factor. Your credit score will affect your premiums if you live in another state. You can still find cheap car insurance if you have poor credit and need insurance.

In the table below, credit scores are defined as:

  • Good: 769-794
  • Fair: 710-740
  • Poor: 524-577

The average credit score is 714, according to Experian.

Average Annual Car Insurance Premiums by Credit Score
Annual Premium With Good Credit
Monthly Premium With Good Credit
Annual Premium With Poor Credit
Monthly Premium With Poor Credit

State Farm








































Low-Income Car Insurance: Tips to Save on Your Premium

Finding cheap car insurance for low-income drivers may seem a herculean task, but there are many ways you can save money. The easiest way to save money is to shop around. This is also likely to result in the most significant savings, so don’t skip this step.

Here are some other ways to save:

Drive a Cheaper Car to Insure

Some cars are less expensive to insure than others. Luxury vehicles are expensive to repair and cost more to insure. High-performance sports cars are always more expensive to insure because insurance companies associate them with riskier driving. Cars such as the Subaru Outback or Ford Escape are among the cheapest vehicles to insure, according to Car and Driver.

Comparison Shop for Low-Cost Insurance

Comparing quotes from different providers gives you an overview of all your options, letting you choose the best for your profile. To save time, use a car insurance calculator to get a rough estimate of what your policy might cost and look for offers lower or around that.

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Take Advantage of Discounts

The average car insurance company offers multiple discounts. Some discounts, such as good driver discounts, can save you as much as 30%. Other discounts save less, but they can still make a difference, and there’s a wide variety of them.

Choose Less Coverage

You will need to get at least your state’s minimum required amount of liability insurance. However, these requirements are very low, so if you can afford it, going to the next level of liability insurance is worth it. If your car isn’t worth more than a few thousand dollars, you probably don’t need full coverage. You can also drop roadside assistance and rental car insurance to save money.

Switch to Usage Based Coverage

If you’re a good driver, consider getting a usage-based auto policy. The way it works is your insurance company uses a telematics device, plug-in device or app to track exactly what you do behind the wheel. It monitors things like rapid changes in speed, hard braking and how fast you drive. Keep in mind that these could result in higher premiums if the schematics reveal you take risks while driving.

Similarly, if you don’t drive much, some companies have low-mileage plans, where you pay for every mile that you drive.

These aren’t available in every state, so check with your insurance company to see what they offer.

Take a Defensive Driving Course

Taking a class in defensive driving techniques can save you some money. It’s best to check with your insurance company before you sign up, as some companies have a pre-approved list of such courses. However, even if you don’t get a discount, you can learn skills that make you a better driver, and that will ultimately reduce your premiums.

Clear Your Driving Record

It may seem obvious, but good drivers pay less for car insurance. The cost of a ticket can increase your premium by hundreds of dollars a year. If you’re already having trouble paying your car insurance bill, you need to be careful while driving. Pay attention to the road: distracted driving kills eight people every day and injures over a thousand. Plus, one citation for texting and driving can raise your premiums.

Pay in Full

If you’re a low-income driver, paying for your auto insurance policy in one lump sum payment may not be realistic, and you may need to use a no-deposit monthly payment cycle to get insured. However, if it’s possible, paying in full saves you somewhere between 5% and 15% a year.

Improve Your Credit Score

Unless you live in a state that doesn’t consider credit score (California, Massachusetts and Hawaii), raising your credit score will save you money on car insurance. You can improve your credit score in the long-term by paying down debts, consistently making on-time credit card payments and increasing the length of your credit history.

Don’t Let Your Policy Lapse

While it may be tempting to cancel your policy and rebuy it when your budget permits, doing this can be counterproductive. Providers look at policy lapses and tend to charge a higher premium once you decide to buy again. Thus, it’s a better choice, in the long run, to maintain your insurance to avoid an increase in premiums.

Best Discounts for Low-Income Car Insurance

To help their policyholders save, insurance companies often provide a variety of auto insurance discounts that are easy to qualify for. For instance, there are student and senior citizen discounts or discounts for being a good driver. However, not all discounts are offered by all providers — some may have more than others.

Pay-In-Full Discount

If you can pay 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 keep in mind that if you cannot pay your insurance in full and up front you can always ask the insurer if they provide a no down payment policy and pay your premium monthly.

Job-Related Discounts

If you work as a teacher, physician or police officer, you may be eligible for a discount — statistically, these occupations are less likely to file claims. Insurers offer auto insurance discounts for federal employees, engineers and first responders such as nurses.

Additionally, many providers offer military discounts on auto insurance.

Safe Driver Discounts

The easiest way to save money on car insurance is to qualify as a safe driver. People with poor driving records pay more for insurance.

You probably qualify as a good driver if you haven’t had an accident or gotten a ticket in the last three years. You’re the type of customer insurance companies want to insure, so shop around to get a good rate. If you want to take it a step further, taking a defensive driving course may get you a discount as well.

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If you’re offered the opportunity to go to traffic school to get a ticket dismissed, you might want to take it. You’ll save hundreds of dollars over the next few years if you can keep the violation off of your record.

Good Student Discounts

Some insurers offer car insurance discounts for students, but often have qualifying requirements. For instance, with some providers, students with at least a B average or 3.0 GPA can qualify for a good student discount. You’ll need to provide a transcript or a report card to prove you’re eligible every year. These can save you between 10 and 15%.

Bundling Discounts

Home and auto insurance bundles, or renters insurance instead of home insurance, with the same company can earn you a discount on both policies. This is the company’s way of rewarding you for doing business with them.

Other Options for Low-Income Drivers

There are also a few non-state programs to help low-income drivers obtain cheap car insurance.

Citizens United Reciprocal Exchange

Citizens United Reciprocal Exchange is a not-for-profit insurance company. It is available through two subsidiaries: CURE auto insurance and NJ PURE for medical malpractice insurance.

If you live in New Jersey or Pennsylvania and you have a good driving record, CURE Auto insurance may work for you. CURE only considers your driving history when preparing a quote — not your credit score, your zip code, your education or anything else. This makes them a perfect option if you have a good driving history and not-so-perfect credit.

Find Charities and Financial Assistance Programs in Your State

Aside from being legally required in most states, car insurance can help drivers financially protect themselves in case of an accident. Maintaining an auto insurance policy can also help drivers avoid premium increases from a lapse of coverage.

However, if staying insured is difficult due to financial strain, many charities and financial assistance programs can help. For instance, you can opt for any of Benefits.gov’s utility and bill assistance programs, which can cover several different monthly bills, such as your electricity, insurance or groceries. However, if you need help with medical debt, you can also apply for medical debt relief programs. This lets you free up income to pay for insurance and other bills.

If you need help finding financial assistance programs near you, use Need Help Paying Bill’s charity locator tool.

Additional Low-Income Resources and Support

Living on a tight budget can be discouraging — but know that there are ways to get out of it. We offer a variety of resources to help you empower your finances, such as learning how to live on a low income, managing financial stress, building positive spending habits and more. Ultimately, these resources can help you take ownership of your finances and life.

Apart from offering general resources, MoneyGeek also provides information dedicated to individuals who require specific types of assistance or financial planning.

  • For Women Experiencing Domestic Violence: Financial abuse is one of the most common reasons women stay in abusive relationships or return to them. In this article, learn how to empower yourself to find support and assistance and ultimately regain financial independence.
  • For Native American Communities: A number of factors can contribute to the money challenges Native Americans face. By understanding how Native communities build wealth and deal with financial challenges, we can build a more equitable financial foundation across the nation.
  • For Formerly Incarcerated People: Getting a job, opening a bank account and finding a safe place to live are all challenges formerly incarcerated individuals face at once. We want to give the formerly incarcerated community a chance to start over by connecting them with support services and providing sound financial advice.
  • For Families With Children Who Are Diagnosed With a Chronic or Terminal Illness: Caring for a child with a chronic, or worse, terminal illness can be emotionally and financially draining. Understand how to thrive financially, where to find support programs and how to care for both yourself and your child.
  • For Undocumented Immigrants: Being an immigrant can come with a host of unique financial opportunities and hardships. Discover how to tackle unique challenges, manage your finances, what your rights are and other sources of financial support you can turn to.
  • For Individuals With Visual Impairments: People with visual impairments face more challenges navigating a highly visual world. Learn how to find financial assistance if you or a loved one is blind or visually impaired.
  • For Refugees in the U.S.: Starting over in an unfamiliar country can be challenging — but know there are steps to take toward a better financial future. As you settle into the U.S., learn about where you can get financial support and assistance as you rebuild your life for the better.
  • For Individuals Who Need Health Insurance: Getting health insurance can be a minefield for those who are uninsured. Learn the different types of health insurance policies, what you’re eligible for and how to find the right one.
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About Gail Kellner

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Gail Kellner is a professional financial writer who specializes in life insurance, auto insurance and personal finance. She earned her Bachelor's degree in Psychology from Western Connecticut State University and her Master's of Science from Indiana State University. She loves combining her knowledge of psychology with her financial expertise so people can make better financial decisions.