6 Best Cheap Car Insurance Companies

When you’re on the hunt for cheap car insurance, you want a policy that fits your budget without sacrificing adequate coverage and a good customer experience. Before you select a policy strictly because it’s cheap, be sure to do your research. The best car insurance isn’t always the least expensive.

Thankfully, there are insurance companies that offer a mix of great service and affordable rates. Here’s our list of the best cheap car insurance companies of 2023.

Our Top Picks for Best Cheap Car Insurance Companies

• Best for Veterans and Military Families: USAA
• Best for Teen Drivers: Erie Insurance
• Best for Multiple Coverage Options: State Farm
• Best for High-Risk Drivers: Geico
• Best for Poor Credit: Nationwide
• Best for Rideshare: Allstate

Best Cheap Car Insurance Companies Reviews

Why we chose it: USAA is one of the few auto insurance companies exclusively offering affordable rates to military members, veterans and their families. They offer the military community competitive rates, easy-to-understand policies, 24/7 customer service and excellent claims service.

The company offers some of the lowest rates for military members and it claims you can save 30% or more on your car insurance premiums compared with other insurers.

Some discounts that are specific to the military community include one which saves you up to 15% on comprehensive coverage if you garage on a military installation. Another option is a discount if you’re deployed, which can save you up to 60% on your premium.

The company also has an excellent customer satisfaction track record. While USAA doesn’t meet the criteria to officially rank in the J.D. Power Auto Customer Satisfaction Surveys, it did outscore companies in nine out of ten markets in 2022. The survey is based on auto insurance aspects that are most critical to customer satisfaction, such as cost and fulfillment of claims.

While USAA products are only available to military members, veterans and their families, it’s worth noting that the latter include the adult children of those who served or are serving.

Also, USAA has fewer of the coverage options that are standard with other insurance providers. You can’t find options like gap insurance, which covers the difference between how much you owe on your auto loan and how much your insurer pays out if your car is totaled or stolen. It also doesn't offer coverages like accident forgiveness or vanishing deductibles.NOTE

Discounts offered

• USAA SafePilot Program: Telematics safe driving program
• MyUSAA Legacy Discount: If your parents were USAA members, you can save on your own policy for continuing the legacy
• Safe driving
• New car
• Anti-theft device
• Garaging on a military installation
• Deployment
• Good student
• Multi-vehicle
• Defensive driving or basic driver training course

Coverage offered

• Comprehensive
• Collision
• Liability
• Uninsured and underinsured
• Rental assistance
• Rental reimbursement

Compare Rates with USAA

Why we chose it: Erie Insurance is the best auto insurance company for teen drivers, offering low premiums and various opportunities to save.

Since teen drivers are still gaining experience behind the wheel, they’re more likely to make some mistakes while driving. Erie Insurance offers the Erie Rate Lock program which it claims will keep premiums from rising.

Another option is the Youthful Driver Discount, which is for unmarried drivers under 21 years old who live with their parents. The Youthful Driver Longevity Discount is similar in that it’s for unmarried drivers who were previously insured under a different Erie auto policy, usually their parents.’

The Driving Training Discount is another opportunity for teens to save. While many insurers offer a similar discount for completing a driver training program, this one is specifically for drivers under 21 years old. Drivers under 21 years old who complete an accredited driver training course can save on their premium. This is helpful for not just saving money but also reinforcing the need to stay safe behind the wheel.

Erie ranked number one in 2022 in the J.D. Power Auto Customer Satisfaction Study for the Mid-Atlantic and North Central markets. That marks the second year in a row that the company hit the top spot in the latter region.

With all of the advantages of choosing Erie auto insurance, you’ll miss out if you don’t live in one of the 37 states where it offers coverage. Erie isn’t available in Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin or Washington D.C.

If you use the mobile app often, you might also find that it has bugs. These glitches can make it inconvenient to access your information.

Discounts offered

• Erie Rate Lock: Freezes your insurance premium even if you file a claim or get a moving violation. Not available in all states and Virginia residents are only eligible for three years
• First accident forgiveness
• Diminishing deductible
• Youthful driver
• Youthful driver longevity
• Driver training
• Vehicle storage
• Safety features
• College student
• Safe driving bonus

Coverage offered

• Bodily injury liability coverage
• Personal injury protection (PIP)
• Comprehensive coverage
• Property damage liability
• Underinsured or uninsured motorist coverage
• Collision coverage
• Gap insurance
• Windshield repair
• Pet injury coverage
• Travel expenses if your vehicle is disabled due to a covered loss
• New car replacement
• Rental car coverage
• Roadside and rentals bundle

Compare Rates with Erie Insurance

Why we chose it: State Farm is our top choice for drivers who want multiple coverages with one company, because it offers a variety of bundling choices. You can combine your car, motorcycle, boat, homeowners, renters or small business insurance coverages, just to name a few.

As with some other insurance companies, when you bundle multiple coverages under the same policy, you can earn a multi-policy discount. Bundle auto and renters insurance and State Farm claims you can save up to $684 annually on your policy. Also, if you have two vehicles covered under the same policy, you can save up to 20% with the multi car discount.

Along with helping you save if you bundle your policies, State Farm offers the Drive Safe & Safe telematics program which it claims can save you up to 30% on your insurance premium for practicing safe driving. The Steer Clear telematics program is similar, but it’s specifically for drivers under 25 years old. It’s a great way for younger drivers to gain insight into safe driving habits.

Discounts offered

• Drive Safe & Save: Telematics program that tracks your driving habits
• Steer Clear: Telematics program specifically for drivers under 25 years old
• Teen driver
• Multi-policy
• Good driver
• Defensive driving course
• Vehicle safety
• Accident-free
• Passive restraint
• Anti-theft device
• Multi-vehicle

Coverage offered

• Collision
• Comprehensive
• Rental and travel expenses insuranceLiability
• Rideshare driver
• Underinsured or uninsured motorist
• Medical payments
• Emergency road service

Compare rates with State Farm

Why we chose it: GEICO’s competitive rates, forgiving policies and easy to use mobile app make it a great choice, especially for high-risk drivers.

The accident forgiveness benefit is becoming commonplace in the industry. Some insurers include it at no charge, while others charge a fee. GEICO offers both options. It’s available free of charge to drivers who are accident-free for five years.

Another option is to purchase upgraded accident forgiveness coverage. This is available to qualifying drivers, and your rates won’t increase after your first at-fault accident. Accident forgiveness is available per policy, not per driver. So if there are multiple drivers under your policy, only one can take advantage of the benefit.

If you have a DUI or reckless driving conviction, or you’ve caused your fair share of accidents, you may need an SR-22 and FR-44 certificate. . You can expect your rates to increase if you have to file these certificates. Thankfully, it offers some of the most competitive rates in the industry, including for high-risk drivers.

You’ll also enjoy the mobile app. You can get a quote and even buy your policy directly from your phone. Then once you’re a customer, you’re free to file your premium, make payments, view your insurance card and more from your app.

Discounts offered

• Airbag
• Anti-lock brakes
• Anti-theft system
• Daytime running lights
• New vehicle discount
• Good driver
• Seat belt use
• Defensive driving
• Driver’s education course
• Good student
• Emergency deployment
• Federal employee
• Membership & employee
• Military
• Multi-vehicle
• Multi-policy

Coverage offered

• Comprehensive
• Collision
• Bodily injury and personal property liability
• Uninsured and underinsured motorist
• Medical payments
• Personal injury protection
• Rental reimbursement
• Emergency road service
• Mechanical breakdown

Compare Rates with Geico

Why we chose it: Having a poor credit rating can make your auto insurance more expensive in many states. All states except Hawaii, Michigan, Massachusetts and California allow insurers to factor in your credit score when determining insurance rates. That means if you don’t live in one of those states, you want to be selective when choosing an insurer.

Travelers is one of the best insurance companies to consider. Compared to other insurers, Nationwide’s rates for drivers with a poor credit score are on the lower end. And unlike some insurance companies, it won’t flat-out deny you coverage if you have bad credit.

In fact, Nationwide will consider the cause of your poor credit rating if you’ve had an extraordinary life circumstance. These circumstances include divorce, death of a parent, spouse or child, serious injury or illness and more. If you’ve experienced one of these, it will see if you deserve a rate reduction.

Also, like with other insurance companies, you can offset higher rates from a poor credit score by taking advantage of discounts. Nationwide’s SmartRide usage-based insurance program offers an instant10% discount to enroll, at least until your driving has been assessed.

Discounts offered

• Multi-policy
• SmartMiles: Pay based on how many miles you drive monthly
• Anti-theft
• Automatic payments
• SmartRide: Usage based program that offers feedback to make safer driving choices
• Accident-free
• Safe Driver: If you’ve been free from at-fault accidents and major violations for at least 5 years, you could save on your premium
• Automatic payments
• Defensive driving

Coverage offered

• Personal injury protection
• Medical payments
• Uninsured and underinsured motorist
• Bodily injury liability
• Property damage liability
• Collision
• Comprehensive
• Rental car expense
• Gap coverage
• Towing and labor coverage
• Roadside assistance
• Vanishing deductible
• Accident forgiveness
• Total loss deductible waiver

Compare Rates with Nationwide

Why we chose it: Allstate’s Ride for Hire program fills the coverage gaps that your personal auto insurance policy and transportation network company (TNC) may not cover for you as a rideshare driver.

Many rideshare companies like Uber and Lyft insure their drivers with a $1 million insurance policy. However, these policies only cover you when you have a passenger or delivery item in your car. You're not covered when waiting for an order or on the way to pick up food or a rider. If an accident happens during these times, you’re on your own.

This additional protection, not offered by all insurers, affords continuous coverage every step of your ridesharing work. It’s primarily why Allstate is a top choice for rideshare drivers.

Discounts offered

• Multi-policy
• New car
• Smart student discount
• Anti-lock brake discount
• Anti-theft device
• EZ pay plan
• eSmart
• Early signing
• FullPay
• Responsible payer
• Safe driving club

Coverage offered

• Collision
• Comprehensive
• Liability
• Medical payments
• Underinsured and uninsured motorist
• Roadside
• Personal injury protection
• Personal umbrella policy
• Rental reimbursement

Compare Rates with Allstate

Other companies we considered

Progressive

Progressive offers numerous coverage options including usage-based and rideshare insurance. However, while their rates were previously competitive, they currently fall in the midrange compared to other insurance companies. Also there’s inconsistency in pricing as many drivers are quoted different rates online vs. the phone.

Liberty Mutual

Liberty Mutual is a decent option for many drivers, but it specifically offers great programs for teachers. Not only does it offer exclusive rates to teachers, it’ll pay a teacher’s deductible if their car is vandalized on school property or during a school-related event. Also, if their teaching materials or school-owned property is damaged or stolen in their vehicle, it’s covered up to $2,500.

While it offers great programs for teachers, the higher than average premiums may actually cancel out any potential savings. Pair that with below average customer service ratings and the cons may outweigh the pros.

The General

The General is a nonstandard auto insurance company meaning it specializes in insuring high risk drivers. It will file an SR-22 for drivers who are court-ordered or state-ordered to have one. The SR-22 is typically required if you have a serious offense like a DUI, reckless driving charge or multiple at-fault accidents.

While nonstandard drivers may benefit from The General, if you have a clean driving record, you’re likely to overpay for your coverage. Also, customers complain that the company is slow to pay out claims.

Travelers

Travelers offers a slew of coverage options at affordable rates. Not only can you enjoy their telematics program, but you can get non-owner car insurance, rideshare coverage, gap insurance and much more. Unfortunately, the telematics program doesn’t compare to some others on the market. While some companies ignore trial results that indicate you’re not a safe driver, Travelers may use those findings to raise your premium.

How Does Car Insurance Work?

When you get car insurance, you’re entering into a contractual agreement with your insurance company.

In exchange for you paying a monthly or annual premium, the insurer offers financial protection in case you’re in an accident or your vehicle is damaged or stolen. Auto insurance is required in every state but Virginia and New Hampshire. (Those states have alternative requirements such as paying an uninsured motorist fee.)

Depending on your policy, your insurer may pay for medical bills, legal fees and lost wages due to an accident or other covered events. How much you pay for your auto insurance will vary based on numerous factors, including your driving history, vehicle and the level of coverage you select.

Check out our guide on how to buy car insurance for more information.

Factors that can impact your car insurance quote

How much you pay for auto insurance will vary based on numerous factors. Here are some things insurers consider before setting your rate.

Credit score

In many states, insurers use your credit score as a factor in determining your auto-insurance premiums. According to the insurance industry, data shows that drivers with lower credit scores are more likely to file claims, and vice versa. However, California, Hawaii, Massachusetts and Michigan don’t factor in your credit score. More states are considering banning this practice as well.

At-fault accidents

Causing an accident indicates to insurance companies that you’re a higher risk to insure and your rates will often rise accordingly. If you’ve been in an at-fault accident be sure to disclose this to your new insurance company when signing up.

Driving habits

Maintaining a clean driving record and avoiding accidents is one of the easiest ways to save on car insurance. Insurance companies see you as a low risk driver if you exhibit safe driving habits. The more points you accumulate on your license, the higher your rates will be.

Coverage level

You have many coverage options to consider when getting insurance. State minimum coverage is typically the most inexpensive because it’s a liability only policy, and even then usually provides less protection than experts recommend. The more coverage you choose from there (i.e. additional liability, comprehensive, collision, roadside assistance and/or medical coverage) the more expensive your premium will be.

Gender

Men are more likely to participate in dangerous driving behaviors like speeding, so insurance companies tend to set their rates higher than those for women. The younger the driver is. As a rule, the bigger the difference in premiums due to gender. Seven states (California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania) don’t allow the use of gender as a factor when setting auto insurance rates.

Age

Teen drivers and young adults under 25 years old will pay the most for auto insurance compared to other age groups. That’s because they have limited experience behind the wheel and are more likely to engage in risky driving behavior. Rates tend to decline and eventually even out from ages 25 to 65, and then may increase again due to age-related health changes that can impact driving.

Permanent residence

Geographic location is one of the most influential factors when it comes to insurance rates. Cities with low crime rates and less dense populations tend to have lower insurance rates than those in which the opposite holds true. That said, rural states and regions,too, can have high insurance rates, because their less crowded roads can encourage driving at high speed, which also correlates with higher accident rates. .

How to lower your car insurance

If you’re currently paying more for auto insurance than you did or can now afford, you may be able to lower your car insurance premiums. Here are a few steps you can take to get cheaper rates.

Look into driver discounts

Most insurance companies offer a slew of discounts that can save you between 5% and 30% or so on your premium.

You may be eligible for a safe driver discount if you haven’t had accident or moving violations in the last 3-5 years. The multi-car discount is a common way to save if you insure more than one vehicle on the same policy. Be sure to ask insurance companies about any discounts they have. Some don’t list every option on their website.

Consider usage-based insurance

Usage-based insurance uses smartphone apps or sensors installed in the vehicle to track your driving habits. Those devices record such data as your braking and acceleration pattern, how many miles you drive, the time of day you drive and more. This information allows the insurer to determine whether you’re a safe driver or not. Drivers with safer driving habits will save on their premium.

Improve your driving skills with a defensive driving class

Defensive driving classes are designed for drivers to learn safe driving practices. They’re typically available for teens, seniors and other high-risk drivers, but you can still take them if you don’t fit these categories. Before you enroll, check with your insurance company to see if an accredited course will qualify for a discount.

Types of coverage for cars

When choosing your auto insurance coverage, you want to ensure it not only meets state minimum standards and requirements but those of your lender, if you have a lease or loan.

Liability

The coverage that’s most widely mandated by law, liability insurance covers damages you cause to another person's property while at the wheel. If you’re at fault in an accident, your liability coverage will pay for costs associated with fixing or replacing the other person's car, along with any medical bills they incur as a result of the accident, up to the policy limits.

Comprehensive

Comprehensive coverage protects your car when you’re not driving. This includes protection for everything from fire to theft and vandalism to a tree limb falling on your vehicle during a storm. This is a great option for protecting your investment, and all but those with an older vehicle of minimal value should, and do, carry it.

Collision

Collision insurance, also known as a physical damage policy, will cover any repairs to your car that occur while it’s in motion. With the exception, again, of owning an older vehicle of minimal value, you should carry this coverage; the vast majority of car owners do.

Personal injury protection

If you're in an accident and you or your passengers are injured, personal injury (PIP) protection can cover the cost of their medical expenses, lost wages and other related costs. Some state laws require that all vehicles carry this type of coverage (including Hawaii, Kansas, Michigan, Delaware, Florida, Massachusetts, North Dakota, Utah, New York, Oregon, New Jersey and Minnesota).

Gap coverage

Gap insurance is essential if you lease a car or have a loan. It will cover the difference between what you owe on your vehicle and its value in case your vehicle is totaled or stolen. This is beneficial because it keeps you from having to pay out of pocket for a vehicle you can no longer drive after an accident or other covered event.

How We Chose the Best Cheap Car Insurance Companies

Here are some of the factors we used to choose the best cheap car insurance companies.

Coverage options

We looked for companies that offered a range of coverage options at a low price.

Discounts

We looked for companies offering numerous discounts that can save you a lot on your premium.

Customer service

We looked at reports and studies from industry experts like J.D. Power to see which companies offer customer service that is well-regarded.

Price

Price is one of the most critical factors in choosing a cheap car insurance company. We looked at national averages for car insurance rates for both good drivers and if you've had an accident to give you an idea of how much you may be paying with each company.

Summary of Best Cheap Car Insurance Companies

• Best for Veterans and Military Families: USAA
• Best for Teen Drivers: Erie Insurance
• Best for Multiple Coverage Options: State Farm
• Best for High-Risk Drivers: Geico
• Best for Poor Credit: Nationwide
• Best for Rideshare: Allstate