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By Javier Cruz
Updated: January 29, 2021 1:40 PM ET
Money; Getty Images

Looking to save on your car insurance policy? We’ve researched auto coverage amounts and insurance companies to help you find the cheapest car insurance that does not compromise your protection. Check out the best cheap car insurance companies for 2021 according to Money.

11 Best Cheap Car Insurance Companies of 2021

These are the companies with the best cheap auto insurance options of 2021 according to Money:

GEICO: Cheapest Rates

Progressive: Best for Families

Liberty Mutual: Best Discount Variety

State Farm: Best Rates from Local Agents

The General: Best for Accident History

Root: Best for Safe Drivers

Travelers: Best for Hybrid-Electric Vehicles

USAA: Best for Military Families

Allstate: Best for Fast Claims Service

Farmers: Best for High Mileage Drivers

Quote Wizard: Comparison Marketplace

Geico: Cheapest Rates

GEICO has the lowest annual rates for non-military drivers, averaging $2,145 for safe drivers and $5,665 for teen drivers, making it an affordable car insurance option. Geico’s website classifies each of the company’s discounts by type, helping you know how much you’d save before even applying.

GEICO now also has a pay-as-you-drive option through its DriveEasy app. Depending on your driving manners, like distraction-free driving and braking, the company will give you a score and base your car insurance rate on it.

Compare Rates with Geico.

Progressive: Best for Families

Progressive offers lower rates for those young drivers who are high school and college students. The company offers four different car insurance discounts:

  • Multi-car
  • Good student
  • Teen drivers
  • Distant college student

These discounts are simple to claim: the good student discount requires only a B average throughout the school year. The distant college student discount helps drivers age 22 or younger who travel more than 100 miles to get to campus.

Compare Rates with Progressive

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Liberty Mutual: Best for Discount Variety

With 17 discounts to choose from, and with simple requisites for most discount programs, you should be able to find cheap auto insurance with Liberty Mutual. The company also offers more specific discounts than other insurers, including:

  • Military
  • Alternative-energy discounts for hybrid cars
  • Pay-as-you-drive (ByMile)
  • Pay-how-you-drive (RightTrack)

State Farm: Best Rates for Local Agents

State Farm has about 19,000 local insurance agents across the country. State Farm also has the most comprehensive rental car and travel expense coverage on the market.

You could save up tp 30 percent off the total costs of premiums by opting into this insurer’s telematics programs:

  • Drive Safe & Save program: For customers 25 and older.
  • Steer Clear Driver program: For drivers below age 25.

Compare rates with State Farm

The General: Best for Accident History

If you’re a high risk driver with a low credit still looking for an auto insurer with low rates, give The General a chance.

Safe driving remains the most reliable way to score the cheapest rates on auto insurance coverage. The General provides basic coverage options with a few extras including:

  • Liability coverage
  • Collision coverage
  • Uninsured motorist
  • Deductible waiver
  • 24/7 roadside assistance

The General is one of the best insurance providers for those high-risk drivers looking for the best rate on their car insurance policy.

Root: Best for Safe Drivers

With Root you could get up to 52 percent off your premiums when you subscribe to one of its two available plans:

  • Pay-as-you-drive (PAYD)
  • Pay-how-you-drive (PHYD) plan

If you get a quote, Root considers you a safe driver. If you don’t get a quote Root doesn’t want to insure you — and you can’t take the test again! To see if you qualify for Root, install its app on your phone and drive for three weeks.

Root’s app also:

  • Lets you to change your car insurance coverage levels any time
  • Offers roadside assistance covering three accidents every six months.

Doesn’t cover TNC drivers when they’re on duty, so it’s definitely not an option for Uber or Lyft drivers.

Travelers: Best for Hybrid-Electric Vehicles

At 10 percent, Travelers has the highest discount for electric or hybrid vehicles, making it the best insurance company for these cars. You’d need to work directly with a Travelers agent to enroll. Then you can simply request a hybrid-electric discount.

Travelers also has 11 other car insurance discounts, including:

  • Defensive driving training
  • Early quote
  • Multi-car
  • New car
  • Homeowners

If you prefer use-based insurance, Travelers offers Intellidrive, its telematics program.

Across the board, Travelers is a highly rated insurance company with solid customer service and cheap auto insurance rates for hybrid-electric vehicles.

USAA: Best for Military Families

USAA is an association, much like a credit union, but only active duty and retired military members — and their families — can join.

Along with its already-low rates, USAA members can save through a variety of discounts. USAA tailors some of its discounts to military life. For example, these car insurance policies charge less when the policyholder is deployed.

Members can tap multi-car, good grades, and driving course discounts. USAA has an accident forgiveness program, too.

Allstate: Best for Fast Claims Service

The company has a wide range of common car insurance discounts and free car insurance quotes online — so you could chip away at your premiums and save month to month that way. But if you have a lower credit score and a driving record with a few blemishes, you’ll pay more with Allstate.

Esurance, a subsidiary of Allstate, provides all-online policies.

Farmers: Best for High Mileage Drivers

Like Allstate, Farmers Insurance won’t win a contest for the cheapest car insurance premiums. But the company’s quality auto insurance coverage could make life easier and save you money after a wreck.

If you’re an experienced driver who puts a lot of miles on your car — and you have a clean driving record and a good credit score — Farmers could offer low auto insurance premiums while still extending solid coverage and customer service.

QuoteWizard: Best Marketplace

QuoteWizard is not an insurance company per se, however, it has 29 insurance partners. Its application process does not require your Social Security number or your driver’s license number, giving the customer the convenience to compare car insurance quotes without giving personal details.

When using QuoteWizard you should keep in mind that,

  • QuoteWizard doesn’t provide auto insurance quotes directly
  • The quotes come from QuoteWizard’s partners
  • The customer chooses the auto insurance rates they want to compare
  • By using this service you agree to be contacted by Quote Wizard’s partners

A Regional Car Insurance Company Could Save You Money

Some companies sell policies in only one state or in a region. As you shop for the cheapest car insurance coverage, be sure to consider the smaller companies in your area:

  • Erie Insurance: This award-winning coverage is available in 12 states: Illinois, Indiana, Kentucky, Maryland, North Carolina, New York, Ohio, Pennsylvania, Tennessee, West Virginia, and Wisconsin.
  • Wawanesa: This Canadian auto insurer also writes quality policies for California and Oregon residents.
  • SECURA: Independent agents in 12 states — Arizona, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, North Dakota, and Wisconsin — can connect you with this coverage.
  • Shelter: Drivers in Arkansas, Colorado, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, Missouri, Nevada, Ohio, Oklahoma, and Tennessee could save with this company.
  • Island Insurance: This insurer competes with the cheapest car insurance companies but only in Hawaii.
  • AAA Clubs: The American Automobile Association (AAA) has regional chapters across the United States. Some chapters partner with local insurers to offer discounts. Large chapters such as Auto Club of Southern California offer coverage directly.
  • Farm Bureaus: Though it’s a national name, Farm Bureau operates as a collection of small, regional insurers.
  • Westfield: Based on Ohio, Westfield Insurance writes auto policies in Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Tennessee, and West Virginia.

What Types of Car Insurance Coverage Are Available?

To find the best cheap car insurance options it helps to understand how auto coverage works. A car insurance policy includes six basic types of coverage:

  • Liability Coverage: If you cause a wreck, this part of your auto policy pays to repair the damage you caused — both property damage and bodily injury to someone else.
  • Comprehensive Coverage: This protects your auto investment from theft or damage from hail, animals, or vandalism.
  • Collision Coverage: This coverage kicks in to protect your own car in an accident.
  • Uninsured Motorist/Underinsured Motorist Coverage: If the driver who causes a wreck has no liability coverage or does not have enough liability, this part of your policy could help cover your losses.
  • Personal Injury Protection (PIP): This element of your coverage could pay medical expenses for you and your passengers regardless of who was at fault.

Of these six types of coverage, the most important are liability, comprehensive, and collision. These cover most of the situations you could get in as a motorist and auto owner.

How To Find The Cheapest Car Insurance

Along with your driving record, these factors affect the cost of your coverage:

Factor Why?
Credit score There is a connection between lower credit scores and higher instances of claims.
Age Statistics show that the youngest and oldest drivers are involved in more wrecks than other drivers.
Gender Males are involved in more accidents and are most likely to pay more.
Telematics Insurers collect actual data about your driving habits to measure your risk of having a wreck.
Car Make and Model Some cars cost more to insure than others because they have higher repair costs or tend to cause more damage in collisions.
Car Age Since newer cars would cost more to replace, policies for newer cars tend to cost more.
Car Safety Features Anything that can prevent an accident could help lower your premiums and help you get more affordable coverage
Geography Insurers factor in your risk theft, the number of cars on the highways near you, and even the weather patterns to assess the risk of paying a claim on your vehicle
Frequency of Driving Driving more could increase your rates because you’re more likely to be involved in a wreck

Use-Based Car Insurance Coverage

Use-based insurance either tracks how you drive, tracks mileage, or both. Either strategy could save you money.

There are two types of use-based insurance:

1. Pay-How-You-Drive (PHYD) Insurance: This uses your driving habits and patterns to generate part of your premium. Data can include vehicle speed, fuel levels, tire pressure, braking patterns, and trip distances, among others.

2. Pay-As-You-Drive (PAYD) Insurance: This option considers only the miles you drive per day and charges part of your premium accordingly. The other part of your premium is not affected by your mileage. It’s based on the other underwriting factors we’ve already discussed.

Frequently Asked Questions (FAQ)

Who has the cheapest car insurance?

Based on our analysis, Geico is the insurance company offering the cheapest rates.

Do car insurance rates vary from state to state?

Yes. With some companies they vary widely. Since company websites don’t always list every discount, check with your insurance agent or your online insurer’s customer service department about non-advertised discounts you could qualify for.

How can I find the best cheap car insurance?

Most car owners can find the best results by researching two things:

  • The number of discounts each company offers, as noted in our reviews above.
  • Whether or not a company has use-based insurance options available.

What is price optimization? How does it work?

Through price optimization, companies gather all your personal data that isn’t necessarily connected to your driving habits. This could include your web browsing history, shopping behavior, social network interactions, and even your online mail subscriptions. It has been banned in 20 US states.

With this data, they’ll take advantage of your loyalty and begin increasing your premiums by small amounts on a monthly or yearly basis. If you see your rates go up without a reason, contact your car insurance company immediately.

How can I save money on my car insurance rate?

You could save money by:

  • Eliminating comprehensive coverage
  • Limiting your liability insurance to your state’s minimum requirement
  • Keeping a good driving record
  • Bundling policies with the same insurance provider

Can you negotiate car insurance?

You can call different insurance companies and inquire about what discounts they have available. Also, you can get quotes from different companies and compare prices.

How does my driving record affect my auto insurance rate?

Accidents cost insurance companies money. Someone with a clean driving record is statistically less likely to have a wreck and can get lower premiums.

For how long do negative marks stay on my driving record?

In most states, after three to four years, the effects of the negative marks on your driving record will go away.

How We Found the Cheapest Car Insurance Rates

For the companies on our list above, we focused on: discount availability, telematics-based programs, discounts, extra-coverage, and other added benefits at little to no extra cost.

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Summary of our Cheap Car Insurance Companies

GEICO: Cheapest Rates

Progressive: Best for Families

Liberty Mutual: Best Discount Variety

State Farm: Best Rates from Local Agents

The General: Best for Accident History

Root: Best for Safe Drivers

Travelers: Best for Hybrid-Electric Vehicles

USAA: Best for Military Families

Allstate: Best for Fast Claims Service

Farmers: Best for High Mileage Drivers

Quote Wizard: Comparison Marketplace