policies through government programs—but drivers in every state can save on car insurance by building credit, picking the best coverage level, and qualifying for discounts.
California, Hawaii, and New Jersey offer government-sponsored affordable auto insurance programs for low-income drivers.
Drivers in other states can find reduced insurance rates by qualifying for discounts, adjusting coverage, or enrolling in a usage-based insurance program that rewards safe driving habits with savings.
Progressive and National General offer some of the lowest rates for low-income drivers.
Lapses in insurance coverage can result in severe financial penalties, serious risks in the event of an accident, and insurance increases when you get coverage again—so avoid them at all costs.
State-sponsored low-income car insurance programs for families and individuals
There are only three states where the government offers state-sponsored auto insurance at affordable rates to low-income families:
: California’s Low-Cost Auto Insurance (CLCA) program provides partial coverage of auto insurance premiums for California drivers who meet a certain low-income threshold, effectively lowering the cost of car insurance. To qualify, applicants must have a household income below 250% of the federal poverty level and own a car valued at less than $25,000.
and applicants with disabilities are eligible for discounted car insurance coverage through its Assistance to the Aged, Blind, and Disabled (AABD) services. Those who qualify get free auto insurance through the government.
low-cost auto insurance program called the Special Automobile Insurance Policy (SAIP). Residents enrolled in federal Medicaid are eligible for the program, but it covers only emergency medical costs—a dangerously low level of coverage.
Other low-income car insurance programs
A few other states have non-governmental programs and companies that offer discounted insurance rates to low-income individuals and families.
The best car insurance companies for low-income drivers
If you don’t live in a state with government-sponsored car insurance for low-income drivers—or if you don’t meet the eligibility requirements for these programs—you’ll need to purchase a regular auto insurance policy from an insurance company.
But not every company will give you the same rate. Your age,
, type of car, and whether you stick with minimum coverage can all affect your auto insurance rates, but every insurer calculates those rates a little differently.
Sometimes finding affordable car insurance is as simple as
until you find the insurance provider with the best rate for you! The table below compares some of the best small car insurance companies for low-income drivers:
A low credit score, a high-crime ZIP code, or a year or two between insurance policies could all cause your rates to go up.
MORE:The best car insurance for bad credit drivers
How to lower car insurance costs
If you can’t afford your car insurance premiums, there are ways to lower your costs without sacrificing coverage (and setting yourself up for higher rates in the future).
Look for discounts
The #1 way to save on car insurance is to compare multiple quotes. The next best way? Ask your insurance company about discounts.
Your deductible is the amount you agree to pay out of pocket on a collision or comprehensive claim before your coverage kicks in. The higher it is, the less you’ll pay to maintain your coverage.
Just be careful: Don’t pick a deductible that’s higher than what you could realistically afford to pay out of pocket in the event of an accident.
Raise your credit score
This one’s easier said than done, but it could have an outsized effect on your rates. Poor credit can raise your insurance rates by 72% compared to good credit.
Here are a few ways to improve your score:
Paying bills on time
Keeping your credit utilization low
Keeping unused cards open
Get your free credit report annually and check for any discrepancies
MORE: How to build your credit score without applying for a credit card
Enroll in telematics
Insurance companies give the best rates to drivers with good driving records. You can lower your rates in real-time if your insurance company has a telematics program.
Through a telematics device, your provider can track your driving habits and lower your rate based on how well and how often you drive. If you know you’re a safe driver and want your rate to reflect it, ask your insurance agent about telematics.
If you’re overwhelmed by the cost of car insurance, you might be tempted to let your coverage lapse and drive without any insurance—especially if you’re confident in your driving skills.
Don’t do that. While you might free up space in your budget in the long term, you can’t control the possible consequences of driving uninsured:
Financial penalties: All it takes is a few miles over the speed limit or a burn-out taillight, and you could face fines up to $5,000, suspension of your driver’s license, and even jail time for driving without insurance.
Uninsured accidents: If you accidentally cause an accident without
, which is typically much cheaper than regular car insurance.
Keep in mind: Many states have automatic reporting directly from your insurance company to the DMV, so the DMV will be notified of your insurance lapse in real time.
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FAQS
What is the lowest level of car insurance?
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The lowest level of car insurance is state minimum coverage, which typically includes bodily injury and property damage liability insurance. In some states, minimum coverage also includes uninsured motorist coverage and/or personal injury protection (PIP).
How many vehicles per person can be covered by the California Low Cost Auto Insurance program?
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Up to two. The California Low-Cost Automobile (CLCA) insurance program allows individuals to insure up to two vehicles on a CLCA policy, provided they are registered to the policyholder. In fact, all vehicles registered to you must be covered by a CLCA policy.
Can I ask to lower my car insurance?
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No. Car insurance rates aren’t negotiable, so you can’t get a lower premium just by calling up your insurance company. However, adjusting your coverage, adding safety features to your vehicle, or enrolling in a usage-based insurance program could all help you lower your rates.
How can I find the cheapest car insurance?
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The best way to find the cheapest car insurance is to compare quotes from multiple providers. The
app partners with over 55 of the nation’s best car insurance companies to help drivers find the cheapest rates in under a minute, and it’s backed by a customer service team of 100+ licensed insurance agents.