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 under $400 per year. Hawaii's program is free for eligible recipients. The others charge a flat annual premium. If you don't live in one of these states, skip to the next section.

Government low-income car insurance programs offer financial relief, but have limitations. All programs provide only basic coverage that may not protect you from serious accidents. Unlike private insurance, you can't shop for the cheapest rates. Most programs require annual eligibility verification, so you must prove your income each year to keep coverage.

If you don't live in California, New Jersey, Hawaii, or Maryland, you can find affordable coverage even on a low income. Car insurance doesn't price your coverage based on your income but on your risk level. Low-income car insurance rates start as low as $13 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. This makes comparison shopping one of the best strategies for getting car insurance with a low income. 

Get quotes from at least three companies and more if you want to be sure you are getting the lowest price. Include GEICO and Kemper, which are two of the cheapest nationally. Spending 30 minutes gathering quotes could save you hundreds of dollars per year.

The cheapest insurer on this list costs $1,125 less per year than the most expensive. You can start with a GEICO quote, then check the state table below to see if a local insurer beats it where you live.

*Rates are based on 83,056 quotes from 46 insurers across 473 ZIP codes.

Where you live with impact the affordability of your car insurance. Prices are different in each state.  
GEICO has the cheapest liability car insurance in 12 states for low-income drivers with good credit. State Farm ranks cheapest in 10 states and Travelers is the lowest in seven. For drivers with good credit who want additional financial protection and can afford more, full coverage rates show GEICO is the most affordable in 15 states, followed by Travelers in eight states and Auto-Owners in five.

South Dakota has the lowest minimum rate in the country at $13 per month. In most states, the cheapest local insurer runs $18 to $30 per month for minimum coverage. Missouri residents can find affordable coverage options with our guide to low income car insurance in Missouri.

Drivers with poor credit will see higher rates with different insurers leading in each state. Filter the table above for poor credit to see your options.

*NOTE: These low income car insurance 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. 

You will only get coverage for damage to your own car if you buy “full coverage" that 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.

Low-income drivers can reduce their car insurance costs by increasing their deductibles. Your deductible is the amount you pay out of pocket before insurance starts covering costs. Raising it from $500 to $1,000 lowers your monthly car insurance by 10% to 30%. Only do this if you can set aside $1,000 in savings if you need it for an at-fault accident.

Low income drivers can reduce car insurance costs by driving less. When you buy insurance, the company asks how many miles you drive per year. 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 not specifically for low income car insurance. Ask about any you might qualify for before you buy. Common discounts include good driver discounts if you have a clean record and automatic payment discounts. Ask what applies to you. You may save 5% to 15% 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 affordable car insurance rates. 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.  Note: California, Hawaii, Massachusetts, and Michigan don't allow insurers to use credit scores.

What if insurers reject you?  Low income drives can often have a lower credit score and be rejected by major insurers. In this case, every state offers an assigned risk pool through the Automobile Insurance Plan Service Office (AIPSO). This program helps drivers who can't get coverage in the standard market get insured. Rates are higher than the market average, but it's a way to get covered after being rejected.

If you drive under 400 miles per month, pay-per-mile insurance saves you 20% to 40% compared to standard insurance. For low-income drivers who qualify, this is the biggest rate cut that doesn't require dropping coverage levels. 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 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..