Cheap Car Insurance
Regardless of how much money I make, I’m always looking for new ways to save.
Whether it’s cutting my cable TV bill or discovering a new app to find cheap gas, I believe there are always more ways to save money.
Shopping wisely for car insurance is one of them.
Car insurance is one of the biggest expenses an auto owner faces so finding cheaper car insurance is worth the time.
The 11 Best Cheap Car Insurance Companies
Who has the cheapest car insurance? With so many variables affecting your premiums, your best cheap car insurance will depend on your situation and preferences. Since insurance is local, your state and neighborhood will affect auto insurance rates, too.
These 11 companies offer consistent ways for most drivers to save on car insurance:
- 🏆 GEICO
- Liberty Mutual
- State Farm
- The General
- Erie Insurance
Now let’s look at each insurer individually:
GEICO Auto Insurance
With more than 75 years of experience providing competitive car insurance rates and excellent customer service, GEICO leads the way on my list.
GEICO takes time to personalize auto insurance policies that fit your needs and your budget. This company also offers a wide variety of discounts, including markdowns for military families and students.
You can also claim discounts if you have modern safety equipment on your car.
Your driving habits and driving history can also contribute to discounts up to 26% if you’ve been accident free for five years and have taken a driver’s education course.
GEICO also rewards loyalty. Its loyalty discount could reach up to 25%.
- Many ways to save: Vehicle safety equipment, defensive driving, good driver, good student – and many more discounts.
- Easy to connect: Great website and mobile app features for tech-savvy customers.
- Financial strength: Rated A++ (superior) by A.M. Best.
- Fewer offices: Other national carriers have thousands more local offices. Your town may not have a local agent yet. Of course you can still buy coverage online.
Progressive Car Insurance
Progressive Car Insurance says it can save you an average of $699 a year when you switch to one of its policies.
How can it achieve this? By offering a standard assortment of discounts and by encouraging policyholders to enroll in Progressive’s Snapshot program.
Snapshot uses an app on your phone to record data about your driving habits. By signing up for this program you’d get a significant policy discount.
Then, you could save more if the app shows you’re a safe driver. Snapshot analyzes your speed in relation to posted speed limits, and it measures how erratically you brake.
Your driving data could also increase your premiums depending on your habits. But the app lets you see your progress, so you could change your habits accordingly.
Like GEICO, Progressive rewards its loyal customers with a Loyalty Rewards Program; you can earn perks and opportunities to save as time passes and you climb the rewards ladder.
- Discounts: Bundle home and auto policies and you could get a discount.
- Telematics: Save immediately with the Snapshot app which records your driving habits and charges premiums accordingly.
- Financial strength: Rated A+ (Superior) by A.M. Best.
- Innovative coverage: Your pet’s injuries could be covered after a wreck.
- Local in-person service: Fewer local agents than most leading national insurers.
- Claims service: J.D. Power reports slightly higher than average complaint ratio during the claims process.
Liberty Mutual Auto Insurance
Liberty Mutual car insurance also excels with its variety of discounts and policy customizations which can extend savings.
You could get up to 30% off for good driving behavior, and further discounts can apply if you buy your policy online and when your car has security and safety features.
Liberty Mutual even has a discount for vehicles that use alternative energy.
This provider has a discount for just about everyone – homeowners, military members, early shoppers, good students, and others. Check the company’s site to find specific discounts in your area.
I like Liberty Mutual’s Deductible Fund. If you opt in you’ll pay an extra $30 but each year of safe driving will lower your deductible by another $100. A lower deductible means more money in your pocket after a wreck.
The deductible fund covers all vehicles on your policy, and it’ll continue to grow until your collision deductible reaches $0. Normally, a $0 deductible would cost a fortune in premiums.
- Offers many discounts: good student, early shopper, homeowner, advanced safety features, and more.
- Deductible Fund: Lower your car insurance costs by enrolling in the Deductible Fund (and continue driving safely).
- Financial stability: Rated A (Excellent) by A.M. Best.
- State-by-state differences: Availability of discounts and programs varies from state to state.
- Claims care: Consumer watchdog sites report slower-than-average claims processing times.
Allstate Auto Insurance
Allstate Insurance is one of the best auto insurance choices – especially for drivers who have a new car. You could get up to 15% off premiums if your car is one year old or less and if you are the first registered driver.
Allstate also offers the standard discounts for vehicle safety equipment such as anti-theft technology and anti-lock brakes, along with traditional multiple policy and bundled policy discounts.
Ask your local Allstate agent about the company’s responsible payers discount (for policyholders who pay all their installments on time) and the smart students discount (which rewards young adults who maintain good grades with lower premiums).
Allstate encourages all drivers to drive safely and promises big savings if you make it to the Safe Driving Club. Download and start using the Drivewise app, and you could be rewarded for your safe driving habits, including safe speeds and gentle stops.
By driving safely, Allstate customers also collect Allstate Rewards and Deductible Rewards.
- Apps: Allstate has a high-rated mobile app for policy management and data collection.
- Discount options: good student discount, vehicle safety equipment discounts, responsible payers discounts, and many more.
- Financial strength: Rated A+ (Superior) by A.M. Best.
- Local and online coverage: Allstate has local agents all over the country and 24/7 claims service online.
- Apps: Allstate has a high-rated mobile app for policy management and data collection.
- Average customer service:D. Power rates Allstate about average for its customer claims service.
As you probably already know, I’m a big fan of Metromile. It’s one of the best auto insurance options for drivers who don’t cover a lot of miles.
Infrequent drivers are saving as much as $1,000 a year with Metromile which charges a minimum base rate plus a rate for miles driven.
The company installs a small device called the Metromile Pulse under your dashboard. The device counts the miles you have driven to calculate part of your bill.
Your per-mile rates will be calculated the same way other insurance companies calculate your rates — rates will be based on drivers’ age, driving history, vehicle type and age, and other such factors.
You will only be charged for up to 250 miles a day (150 in New Jersey), so if you took an unexpectedly long journey on the weekend, you don’t need to worry about an out-of-control insurance bill the following month.
The base rate is paid monthly in advance, and the mileage payment is paid for the previous month. This auto insurance includes all coverage as any other car insurance does.
- Savings: If you don’t drive more than 10,000 miles a year, you could save a lot.
- App: The highly-rated app can also help you find your car or diagnose mechanical problems.
- Discounts: Multi-car discounts – add more cars and pay less for Metromile.
- Not for everybody: If you drive more than 1,000 miles a month you’ll probably pay a higher premium.
- Privacy concerns: Some drivers worry about their insurance company tracking their location all the time.
State Farm Auto Insurance
State Farm is one of the biggest insurance companies in the United States. State Farm has some of the best rates and discounts and a couple special programs to reduce rates even more.
The Drive Safe & Save mobile app connects to your car via Bluetooth and measures your mileage, speed, braking, acceleration, time of travel, and fast cornering. State Farm uses this data to calculate your discount, which can reach up to 30%.
Teen drivers and anyone under the age of 25 who has been accident-free for three years can enroll in the Steer Clear training program to claim savings.
This training includes safe driving video lessons, driving scenarios, driving hours, and mentoring. By completing this program, drivers will get a certificate and a Steer Clear Safe Driver discount of up to 15%.
- Discounts: Offers many ways to save on auto insurance – from safe vehicles to loyal customer discounts.
- Drive Safe and Save: This mobile app allows you to save while encouraging safe driving habits.
- Steer Clear: Can help young drivers develop better (and money-saving) habits.
- Financial strength: Rated A++ (superior) by A.M. Best.
- Local agents: State Farm has more local agents than anyone. An agency in your neighborhood could handle your policy.
- Claims questions: Like many large carriers, State Farm rates average for claims satisfaction.
One of the best ways to access cheap car insurance is to customize your policy to match your actual needs so you don’t pay for coverage you don’t need.
Nationwide excels with this philosophy because of its annual “On Your Side” review. This review creates a built-in opportunity to adjust your coverage to your life’s changes.
This company also offers standard discounts such as bundled policy, multi-vehicle policy, and safe-driving discounts.
Nationwide has also joined the telematics movement with its SmartRide app which tracks your driving habits and adjusts your premiums to match.
- Annual check-up: If you no longer need collision coverage or a lower deductible, Nationwide’s annual check-up can prompt you to make money-saving coverage changes.
- Discounts: Like the other big, national carriers, Nationwide has a wide array of discount programs.
- Financial strength:M. Best rating of A+
- Not all states: Drivers in Massachusetts, Louisiana, Hawaii, and Alaska can’t buy this coverage.
Esurance Car Insurance
Online auto insurer Esurance offers three ways to save on your auto insurance:
- Switch and Save: Just by switching to Esurance from another carrier saves an average of $412.
- Good Driving: Three years of clean driving history could save another 40%. Using Esurance’s DriveSense app to track your habits knocks off another $100, plus the data collected could lower your rates more if you’re a safe driver. This data could also raise your rates.
- Bundling: You can save up to 10% by bundling your auto and home insurance with Esurance.
Esurance also offers more discounts, such as discounts for the safety features of your car and a claim-free discount.
- Lots of discounts: Offers multiple ways to reduce the cost of auto insurance (discounts based on your policy, for being a good driver, and for having advanced car safety features).
- Financial strength: Rated A+ (superior) by A.M. Best.
- Online strength: Launched in 1999 as an online only auto insurance agency, Esurance still leads the industry with online and mobile coverage options.
- No local agents: Online only, but you could call customer service.
Most of the best cheap car insurance companies rely on your safe driving record to save you money. This happens for good reason: Safe driving in the past indicates a good likelihood of filing fewer claims in the future.
But if your driving history already has a couple blemishes, give The General a close look. This company specializes in helping people save money if they have had a wreck or a moving violation — issues that will eliminate many ways to save with other insurance carriers.
Please note: You’d still pay more because of your driving history, but The General could save compared to the rates you’d be paying for another company’s insurance policy.
- Deductible Waiver: Bypass your deductible when replacing safety equipment like headlights and wipers.
- Pay Upfront Discount: If you can afford to pay your insurance policy’s premiums up front instead of in installments you’ll save.
- Safe Drivers Can Pay Less: If you have a clean driving record for the past three years, another carrier’s coverage would save more money.
This company serves only 12 states, but drivers in those states have a great option in Erie Insurance so I’m including the company here.
Unless you live in Indiana, Illinois, Maryland, Kentucky, New York, Ohio, North Carolina, Tennessee, Pennsylvania, Virginia, West Virginia, Wisconsin, or Washington, D.C., Erie won’t cover your vehicles.
If you can get coverage, Erie ranks near the top for customer satisfaction, premium prices, and coverage options.
- Low rates: Erie competes with the big carriers by charging low rates to safe drivers.
- Low complaint ratio: Customers tend to be satisfied with their claims coverage.
- Financial strength: A+ rating from A.M. Best.
- Limited availability: Not everyone can buy coverage.
USAA often has the cheapest car insurance anywhere. In fact, the association got its start a century ago when a group of Army officers needed cheaper auto insurance.
Now military members and veterans from all branches, and their families, can join this association and save money.
USAA also has banking, investing, and other types of insurance. Naturally, the association’s auto insurance policies work particularly well for service members: You could save money during a deployment when your car is parked, for example.
Unless you have served, you won’t be eligible for membership.
- Low rates: USAA often has the cheapest rates anywhere.
- Good customer service: With few physical branches, USAA excels with online and phone-based customer care.
- Military friendly terms: USAA understands the military life and offers more than discounts but ways to save by fitting your auto policy to your life.
- Unavailable for most shoppers: Families without military connections can’t apply.
How Can I Find The Best and Cheapest Car Insurance?
The best cheap car insurance saves you money on premiums but is also there to help when you need it. If you have a wreck you’ll want an insurance policy that pays for your repairs, medical care, and liability as agreed.
Cutting your monthly insurance premiums will cost you more in the long run if your insurance won’t pay your claim. You’d be paying out of pocket for repairs, medical care, and maybe even legal liability.
Often, your state’s minimum coverage requirement won’t provide enough help after a wreck. So you should find other ways to save on car insurance besides buying the lowest level of coverage.
Best Auto Insurance Rates: More Than Just Discounts
All eleven of the insurance providers I listed above can provide quality coverage for less money, but you can’t choose a provider randomly or by name recognition if you expect to optimize your savings.
Instead, your choice should depend on your individual needs. Your needs have a lot to do with your car’s make and model, your car’s age, your driving history, and your insurance needs.
Car insurance discounts help a lot, and auto insurance companies talk about discounts as a main avenue to savings. But the best cheapest car insurance companies start with everyday ways to save before adding on discounts.
As you begin shopping for new or replacement coverage, take a few minutes to understand the way auto insurance policies work. This knowledge will be key to finding the best and cheapest car insurance premiums.
Building Cheap Auto Insurance
Your auto insurance policy includes several distinct components, each of which contributes to your premium payments in different ways. The most affordable car insurance has just the right amount of coverage in these areas:
- Liability Insurance: This is an important component because it pays for the other drivers’ damages if you’re the at-fault driver in a collision. Your state requires you to carry this kind of insurance. This coverage won’t pay for your car’s damages or your medical care, but it includes bodily injury liability to pay for the other driver’s (or other passengers’) medical care. You’ll also have property damage liability coverage to repair other vehicles involved in the wreck.
- Collision Coverage: If you caused an accident, collision would pay to repair your vehicle. Your lien holder — assuming you still owe money on the car — would require you to carry collision coverage.
- Comprehensive Coverage: This coverage pays to replace or repair your car after it’s stolen, damaged by the weather, or broken into. Your lien holder will probably require this coverage, too.
- Personal Injury Protection: This coverage pays your medical bills and could replace part of your wages if you lost work time because of a wreck.
- Medical Payments: This part of your policy could help you pay medical bills resulting from a collision.
- Uninsured / Underinsured Motorist Coverage: This coverage exists in case a driver who has no liability coverage (or not enough liability coverage) collides with you. This coverage could kick in to cover your losses instead.
You could save money by choosing the right amount of coverage with each of these components. Don’t skimp on liability coverage because doing this could cost more in the long run.
But your collision and comprehensive coverages should match your vehicle. In some states, Personal Injury Protection, MedPay, and Underinsured Motorist Coverage are optional.
However, you do want enough coverage to protect your investment and your financial life after a wreck. As with most kinds of insurance, auto coverage requires a balance.
Who Has the Cheapest Car Insurance for Full Coverage?
When you get full coverage insurance, you’re taking out a policy that makes sure you are fully covered should the worst happen.
This type of policy costs the most; however, it is also the safest – because you get liability, comprehensive, collision, and uninsured motorist coverage, all in one go.
In terms of providers, based on my research, State Farm steals the top spot with the most affordable monthly average rate for full coverage.
Other Factors Affecting Car Insurance Rates
The way you build your policy creates the base rate for your monthly auto insurance premiums, but details about you and your car will impact your car insurance rates, too.
- Driving Record: At-fault accidents and moving violations drive up car insurance rates. A clean driving record for the past three years will open up a lot of savings opportunities on your car insurance policy.
- Age and Gender: In some age brackets, finding affordable auto insurance may seem hopeless. Teen drivers, for example, cost a lot more to cover because they have more wrecks, statistics say. The same can be true for older drives. In most cases, male drivers cost more to insure than female drivers. Once again, you can blame statistics. In these cases, shopping around for the lowest rates can pay off most.
- Mileage Driven: More driving means higher insurance rates. Your insurance agent will want to know how far you drive. More and more insurers now offer pay-by-the-mile coverage or telematics-based insurance that tracks your miles automatically.
- Deductibles: Just like with any other kind of insurance, higher deductibles can save you money on your auto insurance coverage. However, setting deductibles too high can bite you back after a wreck. You’d have to come up with the deductible before your auto policy paid out.
- Safety Features: Anti-theft devices, back-up cameras, anti-lock brakes — anything that can prevent a wreck or limit a wreck’s financial impact can create cheaper auto insurance rates.
- Geography: States regulate insurance differently. Michigan and California motorists pay more than New Hampshire or Maine motorists. Your ZIP code can impact rates, too. Insurers measure crime rates and the likelihood of you filing a claim based on your neighborhood and charge rates to match the risk.
- Credit Score: Good credit can lower rates for auto insurance because underwriters have found a connection between high instances of claims and lower credit scores. If your credit history improves, tell your insurance agent.
- Other Details: Going paperless can save; remaining loyal for a few years can also save. Each insurer has its own specific ways to lower rates. Ask your insurance agent about company-specific ways you can save.
Shopping Around For The Best Auto Insurance Quotes
Like any other product, auto insurance exists within a market, so market forces impact rates. A company seeking to increase its market share in your area will often have the lowest premiums you can find this year. A couple years from now, a different company will have the lowest premiums.
Shop around for auto insurance quotes from at least three different companies before finalizing coverage. You never know when the next quote will come in significantly lower than your other car insurance quotes.
Way too many shoppers call one insurance agent and stop their search for the best cheap car insurance. Treat insurance the way you treat groceries, shoes, or gasoline. Know the market before you opt into a policy.
Often, a local company can compete for the cheapest car insurance rates in your area. I mentioned Erie Insurance which serves only 12 states. Your area may have a great Farm Bureau branch or a nice option from your local chapter of AAA. Drivers in Hawaii have Island Insurance. West Coast motorists know about Mercury and Wawanesa.
Posts like this one tend to focus on the biggest carriers, but the regional and local companies deserve a look, too.
How To Buy The Cheapest Car Insurance
Once you have determined which insurance company you would like to insure your car, simply get in touch with an agent from that company or start the application process online.
Don’t be too shy about negotiating quoted prices, especially if you have found cheaper quotes elsewhere, and especially if you know for a fact you have a clean driving record and a safe car.
Saving on your car insurance does not have to be an impossible task. With so many insurance companies offering different types of discounts for different drivers, it’s often a matter of finding the best fit.
When comparing car insurance quotes, pay attention to coverage, deductibles, and limits so that you’re always comparing like with like.
Take the time to understand what is important for you and then find which car insurance companies can best serve your needs.