See car insurance quotes from our partners

Your information is kept secure.

Your guide to car insurance for low-income drivers

Car insurance can be expensive for low-income drivers, but there are a few ways to save money and find a cheaper policy.

Headshot of Rachael Brennan
Headshot of Andrew Hurst

By

Rachael BrennanSenior Editor & Licensed Auto Insurance ExpertRachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.&Andrew HurstSenior Editor & Licensed Auto Insurance ExpertAndrew Hurst is a senior editor at Policygenius who has spent his entire career writing about life, disability, home, auto, and health insurance. His work has been featured in The New York Times, The Wall Street Journal, the Washington Post, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, and Property Casualty 360.

Edited by

Anna SwartzAnna SwartzSenior Managing EditorAnna Swartz is a senior managing editor who specializes in home, auto, renters, and disability insurance at Policygenius. Previously, she was a senior staff writer at Mic and a writer at The Dodo. Her work has also appeared in Salon, HuffPost, MSN, AOL, and Heeb.

Updated|4 min read

Policygenius content follows strict guidelines for editorial accuracy and integrity. Learn about our editorial standards and how we make money.

Your income doesn’t factor into the cost of car insurance, so you won’t pay higher rates simply because you don’t make a lot of money. Still, high car insurance costs can be a problem for low-income families and individuals.

Compare rates and shop affordable car insurance today

We don't sell your information to third parties.

California, Hawaii, and New Jersey have programs that offer cheaper car insurance to low-income families. In other states, low-income drivers should start by getting quotes from the cheapest car insurance companies and comparing options to find the best rates.

Key takeaways

  • Even drivers with low incomes still have to get car insurance before they can drive legally.

  • There is no government-sponsored car insurance for low-income families and individuals at the national level.

  • California, Hawaii, and New Jersey do have low-income car insurance options.

  • Low income-drivers should get car insurance quotes from the cheapest companies, which include State Farm, GEICO, and USAA.

Is there government car insurance for low-income drivers?

Unlike with health insurance, where low-income families can get covered with Medicaid or by qualifying for tax breaks, there is no low-income auto insurance for families provided by the federal government.

Drivers who need help with their car insurance payments may be able to qualify for cheaper rates through a state-run program, depending on where they live. But there are only a few states that offer low-income car insurance programs:

If you live in any other state and you’re looking for low-income car insurance, you’ll simply have to shop around to find the company with the cheapest insurance rates. 

Companies all have different rates for low-income drivers depending on things like location or driving history, but some of the cheapest car insurance companies by average rate include:

Company 

Average monthly cost

MAPFRE

$87

USAA

$87

State Farm

$95

Auto-Owners Insurance

$97

Erie

$98

GEICO

$99

NJM

$105

Travelers

$113

COUNTRY Financial

$118

Nationwide

$123

Collapse table

Cheapest car insurance rates among the largest companies in the country.

Can you get free car insurance if you have a low income?

Unfortunately, there’s not a way for low-income households to get free car insurance. Even in places that have state-subsidized car insurance, most low-income families will still have to pay something for their insurance.

Car insurance for low-income drivers in California

California’s Low Cost Auto Insurance program (CLCA) is the state’s government-administered car insurance program for low-income drivers. It provides eligible drivers with basic liability insurance, plus the option to get uninsured motorist and medical payments coverages.

Who can qualify: In order to get low-income car insurance through the California CLCA program, drivers have to:

  • Be at least 16 and have a California driver's license

  • Own a car that’s worth less than $25,000

  • Have a clean or new driving record

  • Meet income requirements that are based on your family’s size

How to get coverage: If you’re eligible to get low-income insurance through CLCA, you’ll have to show your current vehicle registration, plus proof of your income, along with the initial deposit for your first insurance payment.

→ Learn more about California’s low-income car insurance program

Car insurance for low-income drivers in Hawaii

Some low-income drivers in Hawaii may qualify for free auto insurance from the state’s Office of Health and Human Services. This makes Hawaii the only state that offers free car insurance for any low-income drivers.

Who can qualify: To be eligible for Hawaii’s no-cost car insurance, you have to have been receiving supplemental security income through the Social Security Administration (SSA). This means you must also meet the SSA’s income and residency requirements.

How to get coverage: As long as you’re the sole legal owner of your vehicle and are licensed to drive, you can fill out an eligibility form from the state’s Office of Health and Human Services to apply for coverage.

→ Get coverage from Hawaii’s low-income car insurance program

Car insurance for low-income drivers in New Jersey

New Jersey’s Special Automobile Insurance Policy (SAIP) is a program that provides car insurance to some low-income drivers in the state. It’s sometimes referred to as dollar-a-day car insurance because of the low rate.

But an SAIP policy only covers emergency medical care after a car accident, and doesn’t include coverage for damage you cause in an accident.

Who can qualify: Not every low-income driver in New Jersey qualifies for SAIP. Instead, you can only enroll in the program if you already qualify for Federal Medicaid with Hospitalization.

How to get coverage: You can get SAIP from most insurance companies in New Jersey, but if you’re having trouble finding coverage, the state has a database that lets you find companies that offer SAIP plans.

→ Learn more about New Jersey’s SAIP car insurance program

How low-income drivers can get cheaper car insurance

If you don’t live in a state that offers subsidized auto insurance to low-income drivers, there are still ways to get a cheaper policy. To get cheaper rates as a low-income driver, you should:

  • Get the right amount of coverage for your car: Not every driver needs full-coverage insurance. If you own an older car and don’t have a loan on it, you may be able to drop any extra insurance and reduce your rates by hundreds of dollars a year.

  • Bundle insurance policies: If you already have another insurance policy, like renters, condo, or home insurance, you should get your car insurance from the same company. You’ll get a discount for bundling your insurance from the same place.

  • Try a usage-based insurance policy: Some companies have usage-based insurance plans that are cheaper than a regular policy. With a usage-based plan, your driving habits will be tracked and your rates will go down if you’re a safe driver.

  • Compare quotes from multiple companies: The most effective way for low-income drivers to find the cheapest insurance rates is by comparing quotes before buying. 

  • Improve your credit: While income doesn’t have an impact on your car insurance rates, your credit score can, so taking small steps to improve your credit can lower your car insurance.

There are other ways to get low-income car insurance after you buy a policy. Low-income drivers can make their rates cheaper (and avoid rising costs) by:

  • Signing up for a defensive driving class

  • Avoiding a lapse in coverage by making regular payments

  • Checking for good student discounts and keeping up good grades

  • Enrolling in automatic monthly payments

  • Staying out of accidents and avoiding tickets

Compare rates and shop affordable car insurance today

We don't sell your information to third parties.

Best car insurance for low-income drivers in every state

Our analysis found that if your household income is at the national poverty level, the average cost of car insurance would take up 12% of your yearly income. That’s expensive, but it’s possible to get much cheaper rates from some companies — even for a full-coverage policy.

Here’s a list of the cheapest car insurance companies (on average) in every state, along with the average rate for a minimum-coverage policy.

State

Cheapest company

Average monthly cost

Alabama

Travelers*

$1,218

Alaska

GEICO*

$984

Arizona

Auto-Owners

$1,051

Arkansas

State Farm*

$976

California

Wawanesa

$959

Colorado

American National

$837

Connecticut

GEICO

$810

Delaware

State Farm

$976

District of Columbia

GEICO

$1,025

Florida

State Farm

$1,611

Georgia

Auto-Owners

$1,061

Hawaii

GEICO

$785

Idaho

American National

$491

Illinois

Pekin

$668

Indiana

State Farm*

$801

Iowa

State Farm

$709

Kansas

GEICO*

$961

Kentucky

GEICO

$1,166

Louisiana

State Farm*

$1,642

Maine

Auto-Owners*

$685

Maryland

GEICO*

$917

Massachusetts

GEICO*

$1,067

Michigan

GEICO

$1,071

Minnesota

State Farm

$964

Mississippi

National General*

$956

Missouri

State Farm*

$1,100

Montana

State Farm*

$1,022

Nebraska

Auto-Owners

$1,036

Nevada

GEICO

$1,153

New Hampshire

State Farm*

$750

New Jersey

GEICO

$1,007

New Mexico

State Farm*

$947

New York

Kemper

$951

North Carolina

Erie

$738

North Dakota

State Farm*

$927

Ohio

State Farm*

$721

Oklahoma

State Farm*

$1,049

Oregon

State Farm

$849

Pennsylvania

State Farm

$969

Rhode Island

State Farm

$950

South Carolina

American National

$683

South Dakota

State Farm

$1,113

Tennessee

State Farm*

$848

Texas

Farm Bureau

$1,041

Utah

GEICO

$980

Vermont

State Farm

$627

Virginia

State Farm

$838

Washington

PEMCO

$918

West Virginia

State Farm*

$1,003

Wisconsin

GEICO*

$767

Wyoming

American National

$745

Collapse table

Companies that have an asterisk are the second-cheapest company behind USAA, which is only available to drivers who are in the military or part of a military family.

While the cheapest car insurance company in your state may not be the cheapest option for every driver, it may be the best place for most low-income drivers to start their search for affordable insurance.

Compare rates and shop affordable car insurance today

We don't sell your information to third parties.

Frequently asked questions

Is there car insurance for people with a low income?

In most states, there’s not a special type of car insurance for people with low incomes. Some states have programs that allow drivers to get reduced or free coverage, but most of the time low-income families will just have to shop for the lowest rates.

What happens if you can’t afford car insurance anymore?

You can’t drive legally without car insurance, but if you can no longer afford coverage you can avoid driving uninsured or having a lapse in coverage by reducing your policy’s limits and switching to a cheaper company.

Does Medicaid or Medicare cover car insurance?

Unfortunately neither Medicaid or Medicare cover car insurance costs. In most states there’s not a similar government-sponsored program that gives cheap or free car insurance to low-income drivers.

What is the cheapest level of car insurance?

The absolute cheapest level of car insurance is whatever the minimum coverage requirement is in your state. Most states require drivers to have at least some amount of liability coverage in order to drive, but getting only what’s require by law can leave you unprotected.

Methodology

Our team of data and insurance experts at Policygenius found the best rates for low-income drivers by analyzing hundreds of thousands of rates from every ZIP code and every state (including the District of Columbia).

These rates were for a 30-year-old driver of a 2017 Toyota Camry with a clean driving record, who was insured with the following limits:

  • Bodily injury liability: $50,000 per person, $100,000 per accident

  • Property damage liability: $50,000 per accident

  • Uninsured/underinsured motorist: $50,000 per person, $100,000 per accident

  • Comprehensive: $500 deductible

  • Collision: $500 deductible

Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of costs. Your actual quotes may differ.

Authors

Rachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.

Andrew Hurst is a senior editor at Policygenius who has spent his entire career writing about life, disability, home, auto, and health insurance. His work has been featured in The New York Times, The Wall Street Journal, the Washington Post, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, and Property Casualty 360.

Editor

Anna Swartz is a senior managing editor who specializes in home, auto, renters, and disability insurance at Policygenius. Previously, she was a senior staff writer at Mic and a writer at The Dodo. Her work has also appeared in Salon, HuffPost, MSN, AOL, and Heeb.

Questions about this page? Email us at .