Low-income car insurance: Where it's available, who qualifies

Cheap auto insurance for low-income drivers by company

Although USAA has the cheapest rates, only military members and their families qualify for coverage. GEICO offers the most affordable rates to all drivers. These rates are based on national averages for state minimum car insurance coverage.

This comparison shows only major insurance companies. To find lower rates, it’s worth exploring smaller insurance companies in your area.

Best low-income car insurance companies overall

Even on a tight budget, it's important to see how your insurance company performs in terms of overall reputation,

State Farm rates as the best overall when we include factors like AM Best score and National Association of Insurance Commissioners (NAIC) complaint ratio. However, people on a tight budget will do well with GEICO, which ranks just below State Farm and has the lowest average rates.

The cheapest coverage you can buy: State minimum

The cheapest policy you can buy and be on the road legally is your state's mandated minimum.

The table below provides the car insurance coverages and limits required in each state, along with the average cost of that policy.

Low-income car insurance for teen drivers: Average rates by state

Car insurance is expensive for teen drivers, who are more likely to be in an accident due to their lack of experience behind the wheel. Take advantage of discounts, such as good student and multi-policy savings, to get cheap car insurance for low-income teen drivers. 

Below you’ll see the average car insurance rates for teen drivers in each state, based on a state minimum car insurance policy. Note that this type of policy doesn’t cover the car, it simply meets the state legal requirements to be on the road. If you have a loan on the vehicle, you may be required to carry full coverage.

Low-income car insurance for senior drivers: Average rates by state

Older drivers see significantly lower car insurance rates since they have the most experience behind the wheel. However, senior drivers can be on a fixed income and need low-cost car insurance.

This table shows average insurance rates for seniors in each state, based on a state-minimum policy. Again, if you have a loan or lease, you may need to carry additional coverage.

Car insurance discounts for low-income drivers

Unfortunately, there aren’t car insurance discounts just for low-income drivers. However, you can take advantage of all eligible discounts, and many insurers allow you to bundle discounts for the most significant savings.

Typical car insurance discounts include:

• Multi-policy
• Safe driver
• Defensive driving course
• Vehicle safety features
• Loyalty
• Low mileage
• Military
• Good student
• Organizations or professionals

Government car insurance for low-income drivers

Although most states don’t offer government car insurance for low-income drivers, California, Hawaii, and New Jersey have programs for those who meet specific requirements. Here's a look at cheap car insurance programs by state.

1. California. The California Low-Cost Automobile Program (CLCA) offers liability coverage for drivers with a valid California license and a good driving record who are at least 16 years old and whose vehicles are worth less than $25,000.
2. Hawaii. Hawaii’s low-cost car insurance program is available to residents over 65 who are blind or disabled. 
3. New Jersey. Commonly called New Jersey’s dollar-a-day car insurance, the Special Automobile Insurance Policy (SAIP) offers partial insurance to residents with Medicaid with hospitalization and only covers emergency medical care after an accident up to $250,000. It doesn’t meet the state minimum insurance requirements, but it offers medical coverage to drivers who may not otherwise be able to afford coverage.

Both Minnesota and Texas have bills working through their legislatures that would establish car insurance programs for low-income drivers.

• Minnesota H.F. 2215 would create the Minnesota Lifeline Insurance Program. This program would provide insurance policies to drivers who meet three criteria: income of no more than 300% of the federal poverty line (per HHS, $15,650 for a one-person household), all members of the household have health insurance and have a driver's license for three continuous years.
• Texas SB 1246, currently in committee, would create a Texas Public Auto Option. The Texas Public Auto Option's only two requirements would be that the driver is a Texas resident and meets the vehicle registration requirements.

How can low-income families get affordable car insurance?

Being on a tight budget can make it difficult to get the legally required car insurance. Although most states don’t offer government assistance, finding cheap auto insurance for low-income families and individual drivers is possible.

Ways to save on car insurance include:

• Reducing coverage. Lowering coverage to the minimum requirements decreases car insurance rates, but you’ll have to pay for your vehicle repairs.
• Raising deductibles. The deductible is the amount you must pay before your insurance kicks in. Remember that a higher deductible means paying more out of pocket before your insurance pays.
• Driving a less expensive vehicle. Older or less expensive vehicles cost less to insure.
• Maintaining a good driving record. Accidents, tickets, and DUIs raise rates significantly. Consider taking a safe driving course to remove points from your license.
• Improving your credit score. Most states allow insurers to use your credit score to calculate rates. 
• Shopping for coverage. Compare multiple insurers to find the most affordable coverage.
• Using a pay-per-mile or usage-based car insurance program that bases costs on how much you drive and your diving habits. Usage-based and pay-per-mile programs are a good option for low-income drivers looking to find cheaper rates. If you're considering a usage-based or pay-per-mile insurance program, our pay-per-mile calculator can help you estimate potential savings based on how much you drive.

“To get the most value for your money, maintain a good driving record, ask your agent about discounts, or increase your deductible. Before buying a vehicle, determine the cost of insuring it. High-performance vehicles mean higher insurance rates. You might also consider forgoing comprehensive and collision insurance if you have an older vehicle,” says Mississippi Insurance Commissioner Mike Chaney. 

Sources

• California’s Low Cost Auto Insurance. “Who Qualifies?” Accessed November 2025.
• Department of Human Services - Hawaii. “Chapter 654. Hawaii No-Fault Insurance.” Accessed November 2025.
• State of New Jersey Department of Banking and Insurance. “Special Automobile Insurance Policy.” Accessed November 2025.

Methodology

We partnered with Quadrant Information Services to field rates for state minimum coverage in all 50 states and Washington, D.C.

The average data set is based on the following driver profile:

• 40-year-old driver
• Honda Accord LX
• Good credit
• A clean driving record
• 12-mile commute, 10,000 annual mileage

Additional rate data is drawn based on:

• Ages ranging from 16 to 75

Learn more about our data and methodology.

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