Car Insurance for Low-Income Drivers: How to Find Affordable Coverage

At $98 per month, or $1,176 per year, car insurance can be expensive — especially for low-income households.

But the good news is insurance companies don’t use your income level as a factor when setting car insurance rates. You can save money on a car insurance policy by maintaining a clean driving record, adjusting your coverage level, and asking about discounts you’re eligible for.

How to get cheap car insurance with a low income

If you’re a low-income driver, you can take several steps to secure the cheapest car insurance available to you:

• Look for state-sponsored programs (if eligible)

• Compare quotes from multiple insurance companies

• Ask about discounts

• Consider pay-per-mile or flexible payment options

• Choose higher deductibles or lower coverage limits

Cheapest car insurance companies for low-income drivers

Country Financial, Auto-Owners, and USAA offer some of the most affordable liability insurance coverage nationwide. Pay-per-mile companies, like Mile Auto, can also help lower your cost of car insurance if you’re an infrequent driver.

Insurify Car is a flexible payment option that can make premium installments smaller and more manageable. Coverage starts immediately after you pay your first seven days of premium and a small down payment. Insurify Car policies are available in 16 states, and the liability policies meet minimum coverage requirements in every state where it’s available.

If you’re looking for car insurance for low-income drivers, the table below shows the insurance companies with the cheapest liability-only rates.

The below national rates are estimated rates current as of: Sunday, May 31 at 5:00 PM PDT. 

Insurance Company	Average Quote: Liability Only
Country Financial	$43
Auto-Owners	$45
USAA	$51
NJM	$53
State Farm	$53
Erie	$69
Allstate	$72
Mile Auto	$74
American Family	$80
GEICO	$80
Commonwealth Casualty	$81
Progressive	$82
Safeco	$83
The General	$85
National General	$86
Direct Auto	$91
Mercury	$92
Nationwide	$93
Dairyland	$95
GAINSCO	$96
Travelers	$96
Bristol West	$104
Farmers	$105
Elephant	$106
Root	$108
AssuranceAmerica	$110
Anchor	$114
Chubb	$116
Clearcover	$123
Plymouth Rock	$127
Liberty Mutual	$129
21st Century	$130
Shelter	$130
The Hartford	$137
State Auto	$149
CSAA	$151
Hugo	$185
Amica	$243

Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.

1. Consider state-sponsored car insurance for low-income drivers

Most states don’t provide low-income car insurance programs. But if you live in California, Hawaii, Maryland, or New Jersey, you may be able to qualify for state assistance. These programs provide cheap or free car insurance, allowing low-income families to drive legally.

California

California’s Low Cost Auto (CLCA) Insurance Program helps low-income people meet the state’s liability insurance requirement at lower rates. Additional coverage options, such as uninsured bodily injury and medical payments coverage, are also available at an extra cost.

You and any secondary drivers must meet the following requirements to qualify for California’s car insurance assistance program:^[2]

• Have a valid California license

• Be 16 or older (applicants younger than 18 must be legally emancipated)

• Own a vehicle valued at $25,000 or less

• Have a clean driving record or be a new driver

• Earn less than the annual household income limit

When you’re ready to apply or if you have further questions, call the customer support line at 1 (866) 602-8861 or find an insurance agent near you.



Hawaii

The Hawaii Department of Human Services (DHS) offers free no-fault insurance to drivers who receive financial assistance. To qualify, low-income residents must show proof of payment from the following programs:

• Temporary Assistance to Needy Families with Dependent Children

• General Assistance Program

• Aid to the Aged, Blind, or Disabled

• Supplemental Security Income under the Social Security Administration

Additionally, each policyholder must own the insured vehicle and have a valid Hawaii driver’s license (unless permanently disabled or unable to operate their own vehicle).^[3]

Contact the public assistance information line at 1 (855) 643-1643 for more information, or reach out to one of the DHS processing centers.



Maryland

The Maryland Auto Insurance program caters to high-risk drivers whose policies have been turned down or canceled by other car insurance companies. While established by the state of Maryland, the organization is independently funded through premium payments and its investment portfolio.

Maryland Auto Insurance provides state-mandated coverages, which include liability insurance, uninsured motorist, and personal injury protection (PIP) coverage. You can also upgrade your policy with collision, comprehensive, rental car reimbursement, and towing coverage.

Drivers must fulfill the following requirements to be eligible for this program:^[4]

• Be a Maryland resident

• Own an automobile registered in Maryland or have a valid Maryland driver’s license

• Had their policy canceled or denied by two or more insurers

• Not owe Maryland any unpaid premium

When you’re ready to apply, obtain a quote on the company’s website, call 1 (808) 492-7120, or fill out the online form. If you prefer to work with an insurance agent, use the agent locator tool to find an agent near you.



New Jersey

New Jersey’s Special Automobile Insurance Policy (SAIP) medical-only car coverage helps low-income drivers meet state insurance requirements. This policy covers your medical expenses, such as emergency treatments and treatments for severe brain and spinal cord injuries. It also provides a death benefit.

To qualify for coverage, applicants must satisfy the following criteria:^[5]

• Be enrolled in federal Medicaid with a hospitalization benefit

• Own a valid driver’s license or registration in New Jersey

New Jersey’s “dollar-per-day“ insurance costs $360 per year if paid in full or $365 if paid in two installments. To obtain coverage, find a Personal Automobile Insurance Plan (PAIP) producer in your area or call 1 (800) 652-2471.

2. Compare car insurance quotes to find the lowest rates

Insurance companies weigh various factors and calculate costs differently, so your premiums will vary by insurer. By shopping around, you can save upwards of 30% on your policy. You can use an online quote-comparison tool to find the best price for your situation.

Follow these steps to get a quote:

1. Provide personal information. Answer a series of questions about yourself, your vehicle, and your driving history.

2. Compare real-time quotes. Compare cost, coverages, and company reputation to find the best car insurance. The best time to shop around is every six to 12 months, before your policy is set to renew.

3. Purchase a policy. Finalize your insurance policy online or by speaking to an agent.

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3. Ask about car insurance discounts for lower premiums

Insurance companies offer discounts to reward safe driving and promote loyalty. If you’re looking to save money on your policy, check your insurer’s website or ask your agent for any deals you may qualify for.

Below are a few common discounts to ask about:

• Good driver discount: Save up to 22% if you’re a driver who hasn’t been involved in an at-fault accident or received a ticket during a set period of time.

• Telematics program discount: Participating in your company’s usage-based insurance program can result in a discount of up to 30% on your policy.

• Multi-policy discount: Bundle multiple insurance products, like auto and home insurance, to save up to 25% on car insurance.

• Good student discount: Students who earn good grades can get up to 15% off their insurance policy.

• Military discount: Active-duty military members and veterans can qualify for up to 25% off their insurance policy with a military discount.

4. Consider pay-per-mile or flexible payment car insurance

With pay-per-mile insurance, your monthly premiums are tied to your mileage. You’ll pay a base rate plus a per-mile rate. For example, on its website, Mile Auto includes a monthly rate with a potential base rate of $48 and a per-mile rate of 8 cents. So, if you drove 300 miles, you’d pay a $72 premium for that month.

With Hugo, you can get coverage for three-day, seven-day, 14-day, 30-day, and six-month periods, adding as little as three days of coverage at a time and paying in “micropayments.” Policies are available in 16 states.

Insurify Car is another flexible payment option. The policies meet state minimum liability requirements in the states where it’s available. You can pay for your coverage in seven-day installments, and you can cancel your policy at any time.

Pay-per-mile insurance is cheapest for people who don’t drive much, such as retirees or people who work from home. If you commute frequently, other insurers might be a more affordable option for you.

Insurance Company	Policy Type	Availability	Best for
Mile Auto	Pay-per-mile	Arizona, Colorado, Florida, Georgia, Ohio, Oregon, Tennessee, and Texas	Low-mileage drivers
Insurify Car	Seven-day payment	Alabama, Arizona, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Missouri, Nevada, Ohio, South Carolina, Tennessee, Texas, and Virginia	Fast coverage, low up-front cost
Hugo	Short-term coverage	Alabama, Arizona, Arkansas, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia	Flexible micropayments
Ocho	Insurance agency	Arizona, Georgia, Illinois, Missouri, New Mexico, Texas, Wisconsin, and Washington	No down payment
Nationwide (SmartMiles)	Pay-per-mile	All states except Alaska, Hawaii, Louisiana, North Carolina, New York, and Oklahoma	Students or infrequent drivers
Allstate (Milewise)	Pay-per-mile	Arizona, Delaware, Florida, Idaho, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia, Washington, West Virginia	Remote workers or retirees
Lemonade	Pay-per-mile	Arizona, California, Colorado, Illinois, Indiana, Ohio, Oregon, Tennessee, Texas, and Washington	EV and hybrid drivers

5. Reduce your coverage amount

A liability insurance policy is generally the least expensive option. If you’re on a tight budget, consider downgrading to your state’s minimum auto insurance requirements — but be aware of the risks.

A liability-only policy provides bare-minimum coverage and covers only the other parties’ expenses and injuries in an accident you cause. It doesn’t protect you or your vehicle, so you’d be financially responsible for your own expenses and vehicle repairs if you’re at fault in an accident. Depending on the severity of the incident and your car’s value, this could be costly.

One caveat: If you finance or lease your vehicle, your lender will probably require you to maintain a full-coverage policy. In that case, consider other strategies to lower your premiums.

6. Buy a car that’s cheaper to insure

If you find yourself in the market to buy a car, compare features before buying to determine how those features will affect your premiums. Older, lower-value vehicles with equipped safety features are generally cheaper to insure. Meanwhile, newer or luxury cars require more coverage, so they’re costlier to insure.

The table below shows the cheapest vehicle makes and models to insure, according to Insurify data.

Vehicle	Average Monthly Quote
Chrysler Town & Country	$153
Honda Odyssey	$159
Subaru Forester	$160
Toyota Sienna	$169
Subaru Outback	$170
Honda CR-V	$173
Buick Enclave	$173
Ford Ranger	$174
Subaru Legacy	$175
Chevrolet Trailblazer	$177

Disclaimer: Table data is based on real-time quotes from Insurify’s network of 500+ insurance partners. Actual rates may vary depending on the policyholder’s individual profile and coverage needs.

Car insurance for low income FAQs