Cheapest Car Insurance Options

‍Cheapest Auto Insurance Rates for young adults

Auto insurance is the most expensive right after you get your license, up until around the age of 25. New drivers are the most likely to get into car accidents or need roadside assistance. Since insurance in general is a “game” of risk, people under 25 pay the highest rates.

While your college or high school student (or if that is you!) is excited to drive, learning that insurance can cost at least $90 per month can put a damper on their enthusiasm.

#1: USAA

While USAA holds the #1 spot in the cheapest auto insurance rates, we should also disclose that their services are only for the families of military and former military members. Thankfully, they are fairly lenient: if you are the child of a former service member – even one who served years ago, you are probably eligible for their services.

On average, a person under 25 will pay $1,060 per year or around $88 per month for car insurance. This does of course vary based on the car you insure and your location, but consider that an average.

#2 Geico

Known best for their gecko commercials, GEICO also offers some of the best rates for younger drivers. Ironically, GEICO stands for Government Employees Insurance, making it a public USAA. A driver under 25 should expect to pay a little more than what USAA asks at $1,207 per month, but if you or your parents didn't serve in the military, it's among your best options to reduce the sticker shock of driving your vehicle.

#3 State Farm

State Farm is our third choice, coming in a little higher than GEICO at $1,329 per year. Their customer servie is also reportedly very strong for auto insurance and claims handling.

#4 Travelers

Travelers is just a bit more on average than State Farm at $1,373. They apparently handle claims processing quite well, though they are less likely to be recommended by their own customers.

#5 Nationwide

Nationwide is on your side and right in the middle of the young drivers pack with one of the biggest jumps in overall rates, going all the way to the mid $1500s. They do earn great scores for customer service and loyalty – so people who sign up do so for a long time.

Special Considerations for teen and young drivers

Given these numbers are average, there are some things that teen and young drivers can do to bring down their monthly price.

Drive a modest car

A rear wheel sports car costs more to insure than a basic sedan or SUV. The kind of car truly does matter, as a more powerful car both increases the likelihood of a crash, and because they are generally more expensive to fix. While that Ford Mustang or Chevrolet Camaro might look cool and go fast, they will make your insurance rates go up – significantly.

Opt in to discount programs

Some car insurance companies will install what can be described as a meter in your car or your smartphone to measure how and when you drive. This also established another point: You can pay less for auto insurance by slowing down and giving lots of follow distance, because you are unlikely to get into an accident when driving patiently.

Get good grades

At some school, and for some students, this might be easier said than done, but it is worthwhile. Some auto insurance companies feel that students with better grades tend to be less likely to get into accidents. Study up!

Best Auto Insurance Companies for Seniors

Another group that tends to pay a little more based on their risk of driving is people over 70 years old. In some cases, and based on driving history, the rates can be close to those of teens – if not a bit higher.

#1 State Farm

State Farm moves up a little from it's teens ranking in part because they offer the greatest number of discount options for seniors. Their average price for a person over 70 is $1,145 per year.

#2 GEICO

We are only adding $6 dollars here, but that matters! GEICO comes in second with an average rate of $1,151 per year for people over 70.

#3 Nationwide

Nationwide comes in with a big jump to $1,345 per year. They offer a good set of discounts for being a good driver and generally offer great service.

#4 Allstate

Allstate is midway through this list because their rates are fairly low at $1,377 per year. They also get good reviews for customer service, but they don't offer much in terms of discounts for having multiple vehicles on a plan.

#5 Progressive

Progressive rounds out our top 5 at $1,547, which is another big leap from #4. You do have many opportunities for discounts though, so yours might be lower.

Best auto insurance for multiple cars:

For whole families, these insurance companies offer better discounts when you have more than a couple of cars, and a couple of age ranges in your account:

#1 Geico

GEICO offers great discounts for your loyalty- and when customers add multiple vehicles to their account. The average rate is difficult to explain because it often involves multiple vehicles.

#2 State Farm

While a slight jump occurs from GEICO to State Farm, State Farm is known for offering good discounts to loyal clients who are adding their kids or other family members to the account.

Best car insurance for poor credit

Believe it or not, having poor credit affects many areas of life and unfortunately, makes life more expensive. While rebuilding your credit is one of way saving money in the long run, picking the right car insurance provider is one that can help you every month starting out.

#1: GEICO

GEICO is once against #1 on our lists, noting that USAA can usually beat them, but is limited to service members and their families. GEICO is on average at least $100 less than competitors, including Nationwide, which is honestly a pretty big gap between #1 and #2.

#2 Nationwide

Expect to pay around $1,760 for car insurance through Nationwide, which is a bump from GEICO, but still better than many options.

#3 Allstate

Allstate is the last insurance company before rates go up an average of $300 per month. $2,197 sounds a lot better than $2500!

Best car insurance for drivers with tickets or accidents

Unfortunately, a couple of the things that car insurance providers don't like, regardless of who you are or what vehicle you drive, is accidents. They see people with at-fault accidents as higher risk because they believe it might happen again. The rates here are commonly higher than teen driving, seniors, or bad credit

#1 GEICO

GEICO is again #1 outside of USAA though the number isn't pretty at $2,186 on average every year.

#2 Progressive

Normally in the middle of the pack, Progressive jumps to #2 here at $2,282 per year on average.

#3 Allstate

Allstate arrives at #3, with $2,604.

Best car insurance for everyday drivers

Not everyone is young, has issues with credit, or gets into accidents. How about the many drivers who are in the middle? Who is best for them? You'll notice these rates are a bit lower.

#1 State Farm

Not including USAA again, but State Farm costs an average of $1,081 per year for an average driver, and is the lowest overall average.

#2 GEICO

GEICO is barely $40 per year more than State Farm and comes in at a close number 2.

#3 Allstate

You've seen them on this list before, and they ask just under $1,200 per year for the average driver with no particular issues.

#4 Nationwide

Nationwide averages $1,245 for the average driver.

Online only

There are a number of car insurance companies that are online only. While all of the above insurance companies offer online quotes and account maintenance, they also often have local offices that can help.

Online only can be cheaper. We just suggest you look up reviews for how they handle claims and your actual coverage. Car insurance is extremely competitive, so companies are racing to give you more options – or less options, to cut the overall rate.

Why are all the rankings a bit different?

You'll notice that the same insurance companies represent most of the top 5 for any given category, though they are jumbled up a bit. GEICO is often on top by sheer volume. Part of what you are seeing is how much research these extremely competitive companies do on one another, and how they assess risk. One company might ask for a few dollars less per month because they don't see a person with a particular driving record as that much of a risk compared to others. In the case of car insurance, simply having the most subscribers is also a good way to make their customers happy and them making money.

Types of car insurances

In the last several years, you've likely seen lots of commercials or heard lots of radio ads for car insurance. In an effort to help you drive down costs, these companies (many of them are big, reputable companies listed on this top list too) let you “set your own rate.” These companies are really letting you decide on a monthly payment, then giving you some options based on how little you want to pay.

This does work for some people, but can also limit the amount of coverage you have for your vehicle. Let's review some insurance options that you might or might not need, which can also help you save a few dollars on your insurance.

Liability Coverage

Liability coverage is required in most states because it covers the property or people you damage, but not you. You can indeed often pick liability coverage in differing amounts to get a discount, but this also means that you get by paying out of pocket for part of an accident, or face a lawsuit in the event of a wreck.

Comprehensive Coverage

Comprehensive coverage is one of the more flexible ways you have options to save money. Comprehensive coverage covers problems like theft, vandalism, hail, and fire. While you do pay monthly for comprehensive coverage, you'll pay what is called a deductible in the event of a problem. While this deductible is commonly $500 per incident, this is another area where you could potentially save money by paying a higher deductible.

It's also worth noting that comprehensive coverage is actually completely optional. Is your vehicle an old beater that is paid off? You might not need it. An older vehicle is actually more likely to be totaled in the event of an accident or fallen tree anyway, so extra coverage might not be worthwhile.

Collision Coverage

Collision coverage offers to pay for damages to your vehicle in the event you crash into another car or other object that damages the car, like a tree or mailbox. Collision coverage can be optional, though if you have a loan on your vehicle, the lienholder or bank might require you to hold collision coverage for the life of your loan.

This also means that you have a chance to save a few bucks if you paid off your vehicle – and don't want to pay monthly to protect a vehicle you want to replace.

Medical payments

This covers your hospital and doctors bills in the event of an injury during a crash. While most Americans have health insurance, this can help bridge the gap. Medical payments also have the highest variable of price – your vehicle is only worth so much, but medical payments can add up fast.

Personal injury protection

This type of coverage goes above and beyond medical payments. If you find that you are unable to work or take care of your family after an accident, personal injury protection can cover lost income or child care. Personal injury protection is quite optional and might also be available in other forms through other insurances for less – as this is only accident related.

Other insurance programs to think about

Roadside Assistance

You could save money without roadside assistance. The offerings of roadside assistance include towing, filling you up with some gas if you run out, and unlocking your vehicle when your keys are misplaced. We'll be fair here: For what is often just a few dollars per month, you can get some help on the road that might cost a couple of hundred dollars. The positive alternative is that your insurance doesn't know you towed your car, which could keep your rates lower in the long run.

Just know that if you have a fairly new vehicle, your vehicle's warranty might cover the cost of the tow instead. Also, if your vehicle is reliable, this is probably not something you'll have to worry about.

Roadside assistance also offers an unexpected downside: the insurance company decides who you deal with – not you. There might be a tow truck down the street that can get there faster, but isn't covered by your insurance.

Things to check on:

Defensive driving

Some insurance companies offer a discount if you take a defensive driving course. These courses are designed to prevent accidents and other incidents that might cause your insurance to pay out. Check with your auto insurance company to see if they offer discounts for passing a course.

Are there state specific auto insurances, or better discounts per state?

Overall, GEICO is the cheapest insurance provider in most states, but there are more than a few where they are beaten by local companies. Also note that in some cases, a company like GEICO might actually be much more expensive in Florida than they are in Wisconsin, which is another reason to shop around for the best possible option.

Nodak

Nodak of North Dakota has been around for more than 75 years and offers some of the best rates to residents of North Dakota.

Erie

Erie auto insurance offers great rates and services only the Great Lakes region and Washington DC, if you live in the area, they might be worth checking out.

Grange

Grange auto insurance covers primarily Tennessee, and you'll probably save $20 or more per month just for living there.

Pekin

Pekin serves Illinois, Indiana, and other areas, and has been known for their low rates, especially in Indiana.

There are more

The above list is not exhausting. There are more auto insurance companies that only cover specific regions and states, in addition to other service based membership plans for professions like teaching or tradesmen.

How to get the best rates on your auto insurances

Shop around

Most people aren't in any particular rush to sign up for auto insurance or switch companies. Take the time to get a quote from multiple auto insurance companies and compare how they offer discounts. This might take an afternoon and lots of emails and form fills, but it is worth it to save money on something you can control. You'll also want to look into online versus national, in person insurance companies.

Ask for a discount

While many people write a check or do an automatic electronica transaction every month for their auto insurance, you can call and ask for a discount. Want to escalate this a little further? Talk about the rates you've seen at other companies, especially if they actually are better. Insurance companies know that the cost to retain a loyal customer is way cheaper than “buying” a new one. They might give you a discount in the event you threaten to switch.

Use Autopay

Some insurance companies offer a discount just for being able to take their payment out on a scheduled date. This saves them the hassle of following up with you, which often results in an unhappy customers. Instead, save yourself the hassle of making an online payment manually every month and sign up for automatic payments.

Paperless billing

Sending out a bill is a waste of money and resources. Paper bills help keep the post office afloat, but are a waste of a stamp and paper for other companies. While paperless billing isn't often a big discount, saving a few dollars per month is the goal.

Family discounts versus singles

Technically, doing a family discount isn't always the best choice. For families with young drivers, the result of adding a teen can be a hike in rates – but having a lower rate for the young driver. The rate won't 'feel' lower because it is still higher than the adult rates.

Our point here is this: Having multiple drivers on the same policy is usually cheaper than having individuals on their own policies. Why? Loyalty is key for auto insurance companies and they would rather have you paying for years then pay to acquire a new customer through advertising.

Pay ahead

Some insurance companies offer you a significant discount to pay six or more months ahead. This is very nice, especially for those with cash in the bank, because simply paying once or twice per year will result in more money in your pocket. Ask your insurance company about this if they don't clearly label it on their site. Most of the time, their actual payment system will ask for one month and not six. You'll be able to see the savings by dividing the six month premium by six and comparing to the monthly.

Driving changes

Did you recently start working at home after the pandemic? You can turn down the number of miles you are driving per year and save some cash by letting your insurance company know. They assume, correctly so, that a driver who doesn't drive many miles all year is at less risk for an accident.

Do your research on insurance companies that have you per car insurance per mile. You can get the benefits of paying less for driving little without the risks of being out of your policies limits if you do start putting on miles and forget to report it.

Check with your state

Every state has different requirements for how much car insurance you need. Look up insurance laws for your state to ensure that you aren't paying for things you don't want and don't legally need to have.

Consider your car

Before buying your vehicle, research how much auto insurance costs for that make and model. The auto insurance companies only know about the VIN, which tells them the year, make, model and accessories. Their primary concern is the risk, and the chances the person driving that particular vehicle will get into an accident.

If you want cheaper rates, find a car that is well equipped with safety features, and isn't a rear wheel drive sports car. If you do want to buy a faster, more powerful vehicle, just be ready to pay more for it.

Older cars are also cheaper to ensure, and in some states, only require collision insurance. Your 2005 SUV might be able to go without comprehensive!

USAA is mentioned. How do I join them?

USAA offers all kinds of insurance for people who either served in the military or are the children or spouses of people who served. Their policies are laid out pretty clearly here.

It's also easy to know if you are not eligible: The siblings of service members, nor their parents are eligible to join. This means that a service members own family and the people who marry their kids are likely eligible.

They often rank first in price – and have great customer satisfaction customer scores. This writer also uses USAA and loves them.

Switching is easier

Switching auto insurance is easy. It's not quite like switching banks where you have to sign a bunch of paperwork and receive a debit in the mail within a week or two. Most auto insurance companies offer a simple app or website where you can download the card to your phone, or print it at home. Of course, you can request a physical copy of the card, but you probably won't need it.