Best Cheap Car Insurance Companies (2022)
Finding cheap car insurance might seem daunting, but it’s easy when you compare quotes from as many companies as possible. You can find minimum coverage that will keep you driving without breaking the bank.
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UPDATED: Mar 9, 2022
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- The cheapest car insurance companies are also some of the largest, with USAA, GEICO, and State Farm averaging the lowest prices
- As long as you own your vehicle, you can acquire the minimum amount of liability required by your state for the lowest price
- You can lower the price of your insurance by maintaining a clean driving record, taking advantage of discounts, and raising your deductible
When you’re in the market for car insurance, one of your biggest concerns is likely how much it’s going to cost you. Auto insurance can quickly become expensive, especially if you want extended coverage.
The idea that you’ll pay more for additional coverage is quite familiar to most customers, but many people don’t realize that your rates can vary drastically from company to company. What might cost you under $100 a month at one company could cost double or more somewhere else. There are many factors that affect the price of car insurance, and understanding this can help you save.
This is why it’s critical that you compare rates, particularly if you need affordable auto insurance. Read on to learn more about finding inexpensive car insurance. Then, enter your ZIP code into our free tool to discover what quotes might look like for you.
What type of car insurance is the cheapest?
There are several types of car insurance that you can purchase. When you speak with an agent or search for cheap car insurance online, you’ll see terms like “collision,” “comprehensive,” and “liability.” When your budget is your biggest concern, knowing which insurance you need (and which is the most affordable) can be confusing.
All but two states require you to carry a minimum amount of liability insurance. Liability insurance covers damage that you cause to people and property. Although experts recommend procuring more to protect yourself, the cheapest option is to obtain the state minimum.
Your lender will likely require additional insurance if you don’t own your car outright. Known as full coverage, this protection typically includes comprehensive, collision, and uninsured/underinsured motorist:
- Comprehensive. There are several factors that can damage your car aside from accidents, and comprehensive covers most of them. Comprehensive protects your vehicle from damage like weather, vandalism, theft, and animal contact.
- Collision. While liability covers payments that you’ll have to make to other people, collision covers your auto repairs. Collision covers you after an accident, regardless of who is at fault.
- Uninsured/Underinsured motorist. While insurance is usually required by law, not every driver has it. If someone without proper coverage hits you, this protection helps pay for vehicle repairs and medical bills. Some states require this coverage alongside liability.
Additionally, some lenders will require you to purchase GAP insurance. After purchasing a new car, there’s a risk that you can total it and owe more on your loan than the car is worth. GAP coverage pays the difference between your loan and the vehicle’s value.
To gain an idea of how much the average price of insurance is in your state, check the graph below.
|State||Minimum coverage||Full coverage|
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Keep in mind that the quotes you’ll receive will depend on your unique circumstances. Your insurance might cost more or less than your state’s average.
How do companies determine the price of your insurance?
Insurance companies consider several factors when they determine your rates. Each company is different, but below are the most common characteristics that they consider:
- Age and gender. Companies keep detailed statistics on who makes claims. Younger people and men pay more for their insurance because their demographics are involved in the most incidents.
- Driving history. If your record is clean, you’ll pay less. However, if you have tickets, accidents, or other incidents, you’re a higher risk for the company. On the other hand, if you have no history (i.e., you’re a new driver), you’ll be charged more because the company doesn’t know what to expect.
- Location. Another statistic that companies track is ZIP codes. The price of your insurance could change by moving even a single ZIP code away.
- Make and model of your car. Some vehicles are more likely to become involved in accidents, while others cost more to repair.
- Credit score. Some people don’t realize that their credit score also affects their insurance. Your credit score gives the insurance company an idea of how you’ll pay your bills — the lower the score, the higher the cost of your insurance.
Companies weigh factors differently, which is another reason why it’s important to compare quotes. For example, an accident on your record can raise your rate by 25% at one company but only 10% at another.
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What are the cheapest insurance companies?
You might be tempted to explore smaller insurance companies to find very cheap car insurance with no deposit. Some smaller companies offer lower prices, but the best prices usually derive from larger providers.
Other companies advertise low prices but charge much more than the national average. An example of this is The General. Many people believe that The General has cheap car insurance and offers low insurance rates, but the company is usually much higher than other companies.
The General serves high-risk drivers. Since many of its customers are high-risk drivers, everyone has to pay higher prices. If you’re looking for affordable car insurance, The General is not a good option.
Consider the graph below to get an idea of how much each company charges.
|Company||Minimum coverage||Full coverage|
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As you can see, USAA is one of the most affordable options for insurance. However, USAA car insurance comes with a catch — you have to be active or retired military (or family) to be eligible.
If you’re not military, some of the best places to start are GEICO, State Farm, and Nationwide.
How do you save money on insurance?
When you’re on a budget, every penny counts. Luckily, there are several ways to save money on your car insurance.
The easiest way is to take advantage of car insurance discounts. Again, all companies offer a different selection, but you can browse the list below to see what you might be eligible for.
- Good driver. You can get this discount if you spend a specified amount of time (usually between three and five years) without incident.
- Student discounts. From good grades to leaving your car at home while you attend college, there are plenty of ways for students to save money on their insurance.
- Safety and anti-theft devices. Anything that makes your car safer to drive or harder to steal might be eligible for savings.
- Driver education courses. Whether you’re a new driver or have years of experience, we all can use a refresher on the best driving techniques. If you take a class approved by your company, you can earn a discount.
- Policy bundling. Most large companies offer more than car insurance. If you buy other policies through them (like your renters or homeowners insurance), you might qualify.
- Multi-car. Do you have more than one car in your household? Put them on the same policy to potentially receive a discount.
There are many other discounts out there, so ensure that your agent checks when you sign up.
You can save additional money by changing your deductibles and coverage limits. An insurance agent can help you acquire the basic minimum coverage that you need to be legal. If you raise your deductible, it will lower your monthly payment.
However, there’s a risk to raising your deductible. You’ll pay less now, but if you ever need to make a claim, you’ll have to pay much more before your insurance kicks in.
The best way to maintain lower costs is to keep your driving record clean and your credit score as high as possible.
What happens if you can’t afford car insurance?
Unfortunately, if you can’t afford insurance on your vehicle, you won’t be able to drive it if your state requires coverage.
If your current insurance is too expensive, you can shop for a new provider. There’s usually no consequence for canceling your insurance and moving to another company. Simply ensure that you establish your new plan first, so that there’s no lapse in coverage on your record.
If that doesn’t get you closer to your budget, you can check with your state’s DMV to determine if it has a program to help you. Some states, like California and New Jersey, have income-based programs to help with insurance.
If there’s simply no way to pay for your insurance, you should consider public transportation. No matter how tempting it might be, you should never get behind the wheel of a car without coverage.
Find Dirt Cheap Car Insurance Today
If you’ve been wondering, Where is cheap car insurance near me?, the good news is that you don’t need to look far for a deal. There are plenty of insurance companies that can work with any budget you may have.
If you’re ready to find affordable auto insurance that provides the coverage you need, you should compare rates from as many companies as possible. Enter your ZIP code into our free tool to discover what rates might look like for you.