How to Get Car Insurance for Low-Income Drivers

Insurers don’t use income as a factor in calculating car insurance rates, but other factors associated with low-income, such as poor credit scores, may result in higher rates for low-income drivers. However, many drivers are likely to find savings by comparing insurance quotes, regardless of income.

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Last Updated: 11/25/2022
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Car insurance is a requirement in every U.S. state, except New Hampshire, so almost every driver needs to get a policy. MoneyGeek has ranked the cheapest car insurance companies for low-income drivers by state and at a national level. If you’re a resident of California, Hawaii or New Jersey, you may qualify for a government-sponsored program to help low-income drivers get affordable insurance.

Table of Contents
Key Takeaways


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


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


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

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Why Trust MoneyGeek? MoneyGeek compiled auto insurance quote data from Quadrant Information Services to help low-income drivers find the cheapest premiums in their state. We also outlined the most affordable car insurance providers, average national annual premiums and minimum liability coverage levels. MoneyGeek outlined these data points since factors like location, coverage level and chosen insurer influence car insurance quotes.


Quotes Analyzed


Companies Compared


Zip Codes

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 change in each state, as do the cheapest companies on average.

Excluding USAA, MoneyGeek found that the cheapest widely-available minimum car insurance company in most states is GEICO, which was the cheapest option on average in 26 states. State Farm and Erie were also frequently affordable, ranking as the cheapest in seven and four states, respectively.

Military families who are eligible for USAA should get a quote with the insurer. MoneyGeek found it's the cheapest insurer overall if you can get a policy and the cheapest in 38 states.

Quotes are for a 40-year-old driver with a poor credit score, but you can click on your state to see how costs differ for different family sizes and credit histories.

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

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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 also calculated averages for companies on a national level. If you’re eligible, USAA is the cheapest overall as policies meeting state minimums cost an average of $373 per year.

GEICO is the runner-up, with minimum coverage policies costing an average of $474 per year.

Shopping around is a great way for low-income drivers to save money on their 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.

The Cheapest Car Insurance Companies for Low-Income Drivers - National

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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 $373 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.


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 $474 per year, the cheapest company that all drivers are eligible for. 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 Farm

State Farm charged our sample low-income driver an average of $606 per year, among the cheapest of available companies, and it also has a ton of discounts available. With more than 19,000 agents nationwide, it’s easy to find one near you.

State-Funded Car Insurance Programs

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

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

Good drivers who are 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 CA driver’s license
  • have a good driving record
  • meet income eligibility requirements
  • be at least 16
  • own a car valued at less than $25,000

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

New Jersey’s Special Automobile Insurance Policy (SAIP)

New Jersey has a dollar-a-day program that provides medical coverage for low-income drivers. You must be enrolled in federal Medicaid with hospitalization to qualify. It 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 a death. It does not provide liability insurance, nor does it cover you for doctor’s visits beyond the initial treatment.

Hawaii’s Aid To the Aged, Blind, and Disabled Program (AABD)

If you get financial assistance from the state’s Assistance to the Aged, Blind and Disabled (AABD) program, you might be able to get car insurance through it as well. To qualify, you must meet one of the following requirements:

  • Be 65 or older
  • Legally blind
  • Totally and permanently disabled
  • Living with or providing 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.

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

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

For example, a driver making $19,140 a year, the federal low-income designation, will pay 2.5% of their budget for a GEICO policy only meeting state minimum requirements. If the same driver was making the country’s average annual income, they would only pay 1.4% of their budget.

This can really strain your budget, but don’t cancel car insurance to save money, thinking you’ll pick it up again when you can afford it. Insurance companies will charge a penalty if you have a lapse in insurance coverage, so you will end up paying more in the long run.

Minimum Liability Car Insurance Rates as a Share of Driver Budgets

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  • Company
    Annual Premium
    Share of Federal Low-Income Designaiton ($19,140 per year)
    Share of Average U.S. Annual Income ($33,706 per year)
  • USAA
  • State Farm
  • Nationwide
  • Allstate
  • Progressive
  • Travelers
  • Farmers
  • MetLife

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. For instance, most states only cover you for $50,000 in bodily injury liability costs per accident. If you want more protection against liability risk, MoneyGeek’s data found that companies tend to charge approximately $100 to $200 more per year to increase your liability limits from state minimums to 50/100/100.

Adding collision and comprehensive insurance, also known as a full coverage policy, will be more expensive; 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.

Comprehensive and collision insurance will pay you back the value of your car when it’s damaged in any scenario in which it’s damaged. We recommend dropping collision and comprehensive when the premiums cost more than 10% of the payout. For example, if your insurance company values your car at $5,000 and you have a deductible of $1,000, you’re paying for $4,000 worth of coverage. If your comprehensive and collision premiums are higher than $400, 10% of $4,000, you should consider dropping the coverage.

Average Annual Premium by Insurance Coverage Level

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  • Company
    State Minimum
    Liability-Only 50/100/100 Coverage
    Full Coverage Policy with 50/100/100 Liability
  • USAA
  • State Farm
  • Nationwide
  • Allstate
  • Progressive
  • Travelers
  • Farmers
  • MetLife

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 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 they 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:

  • 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 score 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. If you live in any other state, your credit score will affect your premiums. 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 credit: 769-794
  • Fair: 710-740
  • Poor: 524-577

The average credit score is 703, according to Experian.

Average Annual Car Insurance Premiums by Credit Score
Poor Credit
Fair Credit
Good Credit









State Farm




























How to Lower Your Car Insurance Premium for Low-Income Drivers

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:

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.

Look for 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.

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.

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Shop around with websites that do all the comparison work for you. Or use the compare quote box below.

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Ensure you are getting the best rate for your car insurance. Compare quotes from the top insurance companies.


Consider the Type of Car You Drive

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.

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. Set a budget and stick to it. It is easier to buy your coffee from Starbucks, but it’s less expensive to make it at home. Little things add up.

Evaluate Your Level of 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.

Discount Options for Drivers With Low Income

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 auto-pay.

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. First responders, engineers, government employees and members of the armed forces can also earn discounts.

Safe-Driver Discounts

The easiest way to save money on your car insurance is to qualify as a safe driver. People with poor driving records pay more in insurance. If you haven’t had an accident or gotten a ticket in the last three years, you probably qualify as a good driver. You’re the type of customer insurance companies want to insure, so shop around to get a good rate.

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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

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 to 15%.

Bundling Discounts

Having your auto insurance and your homeowners insurance — or renters insurance — with the same company will earn you a discount on both policies.

Vehicle Option Discounts

If your vehicle has added safety equipment, such as an anti-theft car alarm, anti-lock brakes or Lojack, you may be eligible for a discount. Driving an electric or a hybrid car often earns a discount as well. These tend to be minimal, but every little bit helps.

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.

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About the Author


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.