Cheap Car Insurance: An Expert Guide (2024)

Since car insurance is necessary for most drivers, auto insurance companies have complete autonomy in setting whatever rates they please. On top of that, if you wish to buy car insurance for a high-value vehicle, you may even pay higher rates than usual.  

If you want to save money on car insurance, you’ll need to be fully invested in shopping around for quotes and inquiring about eligible discounts. We’ve put together a complete guide to help you learn how to lower your car insurance rates and find cheap car insurance.

Why is car insurance so expensive?

Car insurance is expensive because of the high cost associated with the risk of providing coverage, and companies base their rates on the likelihood of a customer needing to make a claim.

Motor vehicles are risky investments with potential risks such as theft, accidents, or natural disasters. Insurance companies have to charge higher premiums to cover these risks than other types of insurance policies. 

Another factor driving up car insurance costs is the increasing number of people buying and using cars for transportation. Since more cars are on the road each year, there is an increased chance of accidents, increasing claims for both parties involved.

As the number of drivers on the road continues to rise, so do the risk factors that insurers must consider when determining their rates. 

Which drivers get the cheapest car insurance rates?

The factors determining car insurance rates can vary greatly, but a few of the most common ones are age and driving experience. 

Young drivers typically face the highest premiums due to their inexperience. Conversely, older drivers with years of driving experience usually benefit from lower rates since they’re considered safer drivers by insurers.

In addition, where you live has an impact on your car insurance rate. Insurers consider crime rates and accident frequency in certain areas when calculating rates. Living in a city or area that is prone to theft or accidents makes your premiums higher than if you were in a rural area with fewer claims filed.

Finally, different types of vehicles also influence your premium rate. Sports and luxury cars tend to have higher premiums than sedans and compact cars since they are associated with higher risks of accidents. Make sure to do your research when selecting a car. It can save you money in the long run on insurance costs.

Shopping around for different policies and comparing rates is the best way to get the cheapest car insurance rates possible. Use our guide below to compare cheap car insurance from the most popular companies. 

Which company provides the cheapest car insurance?

The best way to find the cheapest car insurance for you is to get quotes from local auto insurance companies that offer competitive rates. Factors like location, driving history, and credit score can influence which company has the lowest premiums for you. 

We recommend comparing rates from the best auto insurers in the country to ensure you have both affordability and good customer service. For example, State Farm is typically considered the cheapest overall, while Erie offers some of the lowest rates for young drivers and those with tickets on their record. 

Geico provides excellent discounts, Erie is great for families, USAA is ideal for military members, and Metromile is one of the best car insurance companies for people who don’t drive often.

With that said, here is a recap:

• Ask for quotes from auto insurers to compare rates
• State Farm is often the cheapest overall
• Erie offers low prices with tickets on your record
• Geico provides excellent discounts
• Auto-Owners is great for families
• Metromile is cheaper for safe drivers
• Farm Bureau has good prices if credit isn’t perfect
• USAA is ideal for military members or their families.

Do your research and shop to ensure you’re getting the best deal.

Read more: Cheapest Car Insurance Companies

The largest car insurance company in the U.S. is State Farm, offering some of the most competitive rates available for drivers in all 50 states. 

Not only does State Farm offer a comprehensive range of coverage options, but they also have an extensive network of local agents, so you’ll be able to get help with your policy and compare rates easily. Read our State Farm insurance review for a more comprehensive rate comparison.

It offers many discounts to help drivers save money, such as safe driver, good student, military, multi-car, and early signing discounts. Additionally, State Farm has a rewards program that allows customers to earn points which can be used towards savings on other products, such as home and auto insurance. 

With all of these options available, State Farm is an excellent choice for car insurance shoppers looking for quality coverage at an affordable price. 

When looking for the best and cheapest car insurance companies, not all insurers are available everywhere or to all types of drivers. Therefore, State Farm is the go-to company for cost-effective car insurance for many drivers.

Their competitive rates and numerous discounts and reward programs make State Farm an excellent pick for anyone searching for the perfect car insurance provider.

Good drivers are likely to find the most affordable rates on their car insurance through Geico. Our research shows that Geico’s average monthly rates are $135, more than 20% less than the national average. 

Additionally, survey data suggests that most Geico customers are pleased with their customer service experience and would recommend the insurer to friends and family.

Read more: How long does it typically take for Geico to process a car insurance claim?

It’s important to remember that any accidents, speeding tickets, or other traffic violations can increase your premiums, regardless of which insurer you choose. To get the lowest rates and potential good-driver discounts, it’s best to keep your driving record clean.

USAA is widely considered the cheapest company for full coverage car insurance to drivers eligible for its policies. You can only buy USAA car insurance if you are a veteran, an active military member, or an immediate family member.

USAA customers have reported average rates of $97 per month, making them almost $100 less than the national average. This could significantly affect many people’s budgets and make USAA one of the most affordable car insurance companies.

It also means you can often get lower premiums simply because of your status as a veteran if you’re currently serving or have previously served in the armed forces (read our “Armed Forces Insurance Review & Complaints: Home, Auto & Business Insurance” for more information). Our comprehensive USAA insurance review shows how much you can save.

In addition to providing low prices, USAA has a fantastic reputation for customer service. The company takes home top spots in J.D. Power’s Auto Insurance Claims Satisfaction Study every year. 

Moreover, customers rarely file complaints about their experience with USAA based on the National Association of Insurance Commissioners (NAIC) complaint index ratings. It can also be easier to obtain coverage through USAA if you’re relocating from one state to another, have multiple cars, or are a college student. 

Finally, USAA is known to offer excellent customer service to its members. This makes it easier to get questions answered and make sure your policy covers what you need it to.

State minimum liability insurance is the lowest car insurance coverage a driver can purchase in their state. It covers the cost of damage to another person’s vehicle in an accident but does not cover any injuries or repairs to your vehicle. Find out how much car insurance you need.

Geico is one of the leading providers of minimum liability coverage and offers some of the cheapest rates available. Our research shows that Geico customers pay around $50 monthly for this type of policy, which is substantially lower than the national average. 

Geico has some of the lowest car insurance rates in the nation, coming in second only to State Farm in some ZIP codes.

Depending on your location, you may find Geico rates lower than State Farm. In seven states, including California and Florida, Geico is the least expensive option available.

Regarding savings opportunities, Geico stands out from other companies. Though their prices may be higher than State Farm, you can still save money by qualifying for Geico discounts. 

They have one of the most extensive lists of discounts available, and each discount offers more savings compared to other companies.

For example, safe drivers are eligible for up to 22% off with Geico (the average is 10%). Installing anti-theft devices in your car can get you up to 23% off (15% on average). These discounts are significant savings opportunities for drivers. 

Erie: Cheapest Car Insurance for Bad Driving Records

Erie is one of the best car insurance companies for high-risk drivers who have been ticketed or have accidents on their records. Furthermore, drivers with a DUI will find Erie’s premiums lower than most other insurers.

In the case of a ticket, your premium is likely to only increase by an average of 7%, while the industry-wide figure is 22%. Similarly, after a driver files a claim for an at-fault accident, rates rise by an average of 25% with Erie, compared to 44% nationally. This makes Erie one of the best options, regardless of your driving history.

In addition to being highly affordable and offering great rates compared to its competitors, Erie also stands out for having excellent customer service and a wide range of coverage options. For example, eligible customers for the Rate Lock program could avoid future rate increases from tickets or claims. Read our Erie insurance review to learn more.

Erie also offers many discounts that larger insurers do, such as bundling multiple policies together, having safety equipment in a vehicle (such as anti-lock brakes or anti-theft devices), or being a young or senior driver with a safe and clean driving record. (For more information, read our “Does Erie offer any discounts or incentives for safe driving?“).

Unfortunately, Erie is only available in 12 states (including Washington D.C.):

• Illinois
• Indiana
• Kentucky
• Maryland
• New York
• North Carolina
• Ohio
• Pennsylvania
• Tennessee
• Virginia
• West Virginia
• Wisconsin

Nonetheless, drivers in these areas may find that they can save significantly by choosing Erie over other providers.

Read more:

• Best Indiana Car Insurance
• Best Pennsylvania Car Insurance
• Best West Virginia Car Insurance

Erie is also an excellent choice for the best auto insurance for teens and parents. It offers some of the lowest premiums for drivers aged 21 or younger who remain on their parent’s policy. 

Customers can also use their online account or mobile app or contact their dedicated agent for support and claims. This makes it easy for young drivers away at college to get the help they need without going home to speak with a local representative. 

Read more: Best Auto Insurance for Young Adults

Geico: Cheapest Car Insurance for Seniors

Geico offers the best auto insurance for seniors with some of the most competitively-priced rates. Why is car insurance more expensive for seniors? The answer likely lies in the fact that drivers aged 50 and older are more of a risk on the road. 

Most insurance companies typically consider seniors as less cautious drivers and statistically more likely to get into an accident or file a claim. Fortunately, Geico recognizes this risk and is willing to provide discounts for responsible senior drivers who take the time to understand their coverage options and purchase policies wisely.

With a variety of discounts available, including multi-car policies and an accident forgiveness program, it’s no wonder so many seniors are turning to Geico for their auto insurance needs. 

One benefit that makes Geico stand out for senior drivers is its wide array of discounts, which can help reduce rates significantly. Many senior drivers enjoy discounted rates based on the length of tenure without even having to buy additional coverage or qualify for other exceptional savings opportunities. 

In addition to discounts for senior citizens, there may be extra savings if you insure multiple cars in your household or have taken a defensive driving course within the last three years.

Metromile: Cheapest Car Insurance for Low-mileage and Safe Drivers

If you drive less than the average driver or are generally a safe driver, Metromile pay-per-mile and usage-based auto insurance could be your most affordable option.

Metromile was one of the first U.S. companies to provide rate structures determined mainly by mileage. You should aim to drive less than 10,000 miles annually to get the lowest Metromile insurance rates.

Usage-based coverage is often cheaper than traditional car insurance policies since rates are based on how well and frequently you’re driving, making it ideal for those who may face higher premiums due to their age, credit score, city congestion, or any other risk factors.

This makes Metromile an attractive option for retirees or those who work from home, students living on campus, and young drivers with a clean driving record.

The only downside is that Metromile is currently available in only eight states:

• Arizona
• California
• Illinois
• New Jersey
• Oregon
• Pennsylvania
• Virginia
• Washington.

If you don’t reside in any of these areas, use our expert guide to find the best usage-based car insurance near you.

Geico: Cheapest Car Insurance for Drivers With Poor Credit

Those with less-than-perfect credit typically receive quotes that are 99% higher than those with excellent ratings. To save money, it’s worth investing time into improving your credit score.

Geico is the most cost-effective car insurance option for people whose credit scores could be better. Rates average around $140 per month. Nationwide also has competitive rates for drivers with poor credit, around $155 monthly. Read our GEICO vs. Nationwide car insurance guide to learn more.

Cheap Car Insurance Rates by Age

Insurance companies consider various factors when determining rates, including age, experience level, driving record, credit history, and vehicle type. Young drivers will typically pay more for car insurance than older, more experienced drivers due to the increased risk associated with their age. 

This table will provide more information about which car insurance companies are the cheapest based on your age. 

Average Full Coverage Monthly Car Insurance Rates by Age, Gender and Marital Status

As you can see, Geico ranks highly on this list as one of the most affordable car insurance companies for young and aging drivers.

Read more: Average Car Insurance Cost by Age 

Cheap Car Insurance By State

The cheapest car insurance companies by state can vary significantly. Some states may have different regulations or laws that affect the cost of coverage. 

Additionally, each state has its own unique set of factors that influence auto insurance rates and premiums. These factors include:

• population density
• number of miles driven annually
• age and type of vehicle
• driving record
• credit score
• type of coverage

When looking for the cheapest car insurance in your area, it is important to compare multiple providers and policy options. Each carrier offers different discounts and incentives that can be beneficial when shopping for cheaper rates.

What factors affect car insurance rates?

When shopping for car insurance, be mindful that the following factors can impact the amount you spend in the long run. 

Age

Age is one of the most significant factors affecting car insurance premiums. Generally, younger drivers are considered more at risk for accidents, so they typically pay higher premiums than older drivers.

This is due to their lack of driving experience and a greater propensity to make mistakes while behind the wheel. Insurance companies may also charge an additional fee if the driver is under 25 or has had multiple traffic violations in a short period of time.

Similarly, older drivers usually pay higher premiums.  As people age, their reflexes and ability to react quickly may decrease. Additionally, some drivers may be at a higher risk of getting into an accident due to age-related medical conditions or vision impairments.

Gender

Gender is also one of the factors that can affect car insurance premiums. Generally, women pay slightly cheaper rates than men because they are often considered safer drivers (read our “Best Car Insurance for Women” for more information).

Insurance companies consider female drivers to be more responsible and less likely to engage in risky behaviors such as speeding or driving under the influence. On the other hand, male drivers are typically charged higher rates due to statistics showing that they tend to get into more accidents than female motorists.

Additionally, certain types of cars (such as sports cars) may have higher insurance premiums for male drivers due to their more significant potential for reckless driving.

Credit Score

Your credit score can also influence your auto insurance rates. Insurance companies consider individuals with good credit scores to be more responsible and less likely to file a claim. Companies may offer lower rates to incentivize drivers to maintain healthy financial habits.

Conversely, those with poor credit histories are seen as having higher risks of filing claims and thus may receive higher premiums due to their increased riskiness.

Additionally, some providers may even deny coverage altogether based on an individual’s low credit score, so it is important to check your credit report regularly and improve it if you want a better rate on your car insurance policy.

Vehicle Make and Model

The make and model of the vehicle you drive can also play a large role in determining your car insurance premium.

Insurance companies consider factors such as the size and weight of the car, its safety features, how often it is driven, how likely it is to be stolen, and its repair costs when calculating your rates. This means that luxury cars or sports cars tend to have higher premiums than more practical cars.

Another factor that affects vehicle insurance premiums is the age of the car. Older vehicles may cost more to insure due to their potentially greater repair costs or difficulty acquiring spare parts if damaged in an accident.

Additionally, some insurers may charge a higher rate for vehicles with modified engines or body kits as they pose a higher risk of theft or damage.

Claims History

The past claims history of an individual can also have a bearing on their car insurance rates. Insurance companies look at the type and frequency of claims made in the past to assess how likely a driver will make a claim in the future.

For instance, if you have had multiple accidents or traffic violations over the last few years, insurers may charge higher rates as they consider you more prone to risk-taking and, thus, more likely to file another claim. 

Similarly, those who have not filed any claims might be eligible for discounts due to their lower risk profiles.

Moreover, individuals who have only made small or minor claims may still be considered low-risk drivers by some insurers, allowing them to benefit from reduced premiums. Therefore, it is important to consider your past claims history before signing up for a car insurance policy.

Driving History

Your driving history is a major factor when calculating your car insurance rates. Insurance companies review an individual’s driving record and look for any violations or accidents which may indicate a higher likelihood of filing a claim in the future.

Those with clean records tend to receive lower rates as they are seen as more responsible drivers. At the same time, those with multiple violations within a certain period of time can expect to pay higher premiums due to their increased riskiness. 

Average Monthly Car Insurance Rates by Company and Driving Record

Certain types of violations, such as DUI/DWI convictions, may result in particularly high premiums as they indicate extremely reckless behavior behind the wheel. Additionally, some insurers may even refuse coverage altogether if an individual has too many infractions on their record.

It is essential to be mindful of your driving habits and follow all applicable road rules to avoid receiving any citations that may negatively impact your car insurance premiums.

ZIP Code

The area where you live and commute also impacts your auto insurance costs. Insurance companies consider the traffic and crime rates in a particular ZIP code when calculating premiums, as high-risk areas tend to have a greater chance of theft or damage.

For instance, individuals living in urban areas with congested streets are more likely to be involved in accidents than those living in rural areas, resulting in higher rates for those residing in cities.

Similarly, individuals living close to places prone to natural disasters such as floods or hurricanes may also be charged extra due to the potential damage caused by these events.

Unlocking Savings: Case Studies on Finding Cheap Car Insurance

Case Study 1: The Cost of Coverage

Sarah, a young driver with a clean driving record, was looking for cheap car insurance to fit her tight budget. She decided to compare quotes from different insurance companies and found that Geico offered the most affordable rates for her profile. By switching to Geico, Sarah was able to save over $100 per month on her car insurance premium.

Case Study 2: Military Savings

John, an active-duty military member, wanted to find the cheapest car insurance for his family. After researching various insurance providers, he discovered that USAA offered exclusive discounts for military families. By switching to USAA, John was able to save nearly $1,000 per year on his car insurance policy compared to his previous provider.

Case Study 3: Good Driver Benefits

Lisa had a spotless driving record and was determined to find the most cost-effective car insurance option. She requested quotes from multiple companies and found that State Farm offered the cheapest rates for good drivers. By switching to State Farm, Lisa was able to reduce her monthly car insurance premium by 25%, resulting in significant long-term savings.

Case Study 4: Location Matters

Michael, a resident of a high-crime urban area, was struggling with high car insurance rates. He decided to explore different insurance options and discovered that Erie Insurance offered competitive rates specifically tailored to his ZIP code. By switching to Erie Insurance, Michael was able to save over 30% on his car insurance premium, providing him with substantial cost savings.

Cheap Car Insurance: The Bottom Line

Finding cheap auto insurance can be a difficult process, as there are numerous factors to consider when calculating premiums. Age, gender, ZIP code, and driving history will have the biggest impact on your rates.

However, Geico offers the lowest rates to most drivers, while Erie is the best for teens and high-risk drivers.

Understanding how personal factors affect your rates is important to ensure you’re getting the best deal possible. By being mindful of the above-mentioned considerations, you can find the perfect car insurance policy for your needs and budget.