Low-income car insurance

Best low-income car insurance

This table shows the companies offering the best car insurance for low-income families. Geico has the lowest rates at an average of $450 a year for state minimum coverage, while Farmers has the highest rates.

Note that 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.

Cheap auto insurance for low-income families

This table shows average car insurance rates from major insurers. 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.

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. If you've committed certain moving violations, you would be excluded from the program. The program, if passed as is, would provide personal injury protectionPersonal injury protection (PIP) pays for your medical, hospital and funeral expenses resulting from a car accident, regardless of who's at fault. (PIP), bodily injury liability, property damage liability, and underinsured/uninsured motorist coverage.

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. It would be administered by the Texas Department of Insurance, and policies would meet or exceed minimum Texas liability requirements and provide coverage options such as PIP and underinsured/uninsured motorist. It would also set premiums for low-income drivers on a sliding scale. Outside of qualifying life events, such as a new car purchase or loss of your previous insurance policy, policies would only be available during an open enrollment period.

State minimum car insurance requirements

Most states require at least a minimum amount of car insurance. However, each state determines what coverages and limits are necessary. Liability coverage is typically mandatory, but other coverages such as uninsured/underinsured motorists, medical payments and personal injury protection may also be required.

The table below provides the car insurance coverages and limits required in each state.

Low-income car insurance for teen drivers

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

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

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 April 2025.
• Department of Human Services - Hawaii. “Chapter 654. Hawaii No-Fault Insurance.” Accessed April 2025.
• State of New Jersey Department of Banking and Insurance. “Special Automobile Insurance Policy.” Accessed April 2025.

Methodology

Insurance.com commissioned car insurance rates through Quadrant Data Services for state minimum coverage in 34,588 ZIP codes across all 50 states and D.C. Rates were fielded in late 2023 for a driver with a clean record and good credit driving a Honda Accord LX. 

Low-income car insurance: Frequently asked questions

What is the cheapest car insurance company for low-income people?

Geico has the cheapest rates for state minimum coverage on average. However, rates vary significantly depending on location, driving record, age, coverage, and vehicle.

Does Texas have car insurance for low-income individuals?

Texas does not offer government auto insurance for low-income drivers, but there is a bill, currently making its way through the legislature to create a new program.

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