Cheapest Car Insurance Companies (2023)

Erie Insurance and State Farm are the cheapest large car insurance companies in the nation. However, depending on where you live, you may find a lower rate from a regional company or different national brand. And if you’re in the military community, you may get the lowest rate from USAA.

Car insurance is required to drive legally in most states and may prove invaluable if you are ever involved in a car accident. But this doesn’t mean you have to overpay for it. Read on for tips on finding the cheapest car insurance company near you.

Cheapest car insurance companies

Erie’s rates for full-coverage car insurance average $1,200 a year for a typical adult driver, the cheapest price in our analysis of auto insurance rates from all 50 states and Washington D.C.

The next-cheapest rates are available from USAA, $1,352 a year, and State Farm, $1,712 a year.

Full-coverage car insurance includes higher liability limits than required by law in most states, as well as collision coverage and comprehensive coverage, which are typically required for car loans and leased vehicles.

Since you may qualify for a lower rate with a different company, it’s best to compare quotes from multiple companies when you shop.

Although Erie is only available in 12 states and the District of Columbia, it is the 13th largest auto insurance company in the U.S., according to the National Association of Insurance Commissioners.

USAA’s auto insurance products are only available to current and former members of the military and their families, but it is the nation’s fifth largest auto insurer.

State Farm is the nation’s largest, followed by GEICO, Progressive and Allstate.

Cheapest minimum-coverage car insurance

Erie offers the cheapest minimum-coverage car insurance in the U.S., $538 a year, followed by USAA, $826 a year, and State Farm, $992 a year.

Minimum car insurance requirements vary by state. Most states require basic liability insurance to cover injuries and property damage you may cause to others in a car accident.

Several states also require uninsured motorist coverage, which covers you and your passengers for injuries resulting from an accident caused by a driver without insurance.

In no-fault insurance states, minimum coverage includes personal injury protection, which covers injuries you and/or your passengers suffer in any car accident, regardless of fault.

Cheapest car insurance company in your state

Not counting USAA, State Farm offers the cheapest car insurance in 27 states, while Progressive is cheapest in six states and Erie has the lowest rates in four.

Farm Bureau affiliates offer the cheapest car insurance in Georgia, Kentucky, Louisiana, Mississippi, North Carolina and Virginia.

GEICO offers the cheapest car insurance in Hawaii, charging rates that average $610 a year, which is the cheapest state average in the U.S.

In Rhode Island, Progressive’s rate of $3,492 a year qualifies as the most expensive of the nation’s cheapest state averages.

Cheapest car insurance for drivers with a speeding ticket

Erie offers the cheapest car insurance to drivers with a speeding ticket, with rates averaging $1,306 a year, followed by USAA, $1,625 a year, and State Farm, $1,846 a year.

A speeding ticket raises the average price of car insurance by 20%, compared to rates available to drivers with a clean record. However, Erie only charges those with a speeding ticket 9% more than drivers with a clean record, and State Farm charges those with a ticket 8% more.

Cheapest car insurance for drivers with an at-fault accident

Erie offers the cheapest car insurance to drivers with an at-fault accident on their record, charging rates that average $1,519 a year. This is 27% higher than its average rate for drivers with a clean record.

USAA and State Farm nearly tie for the next-cheapest car insurance for drivers with an accident, with rates averaging $2,007 and $2,029 a year, respectively.

An at-fault accident raises the average price of car insurance to $3,087 a year, which is 45% higher than the rate available to a driver with a clean record.

Cheapest car insurance for drivers with a DUI

Erie offers the cheapest car insurance to those with a prior conviction for driving under the influence (DUI), charging $2,066 a year, followed by State Farm, $2,390 a year, and USAA, $2,562 a year.

A DUI raises the average price of car insurance by 74% compared to rates available to a driver with a clean record.

Cheapest car insurance companies for teen drivers

Erie, USAA and State Farm offer the cheapest car insurance for teen drivers, but the rates they charge to teens are considerably higher than the rates they charge drivers in their mid-20s or older.

For example, Erie’s rates for minimum-coverage policies for 18-year-olds average $1,189 a year, which is nearly twice the rate that Erie charges to 25-year-olds.

Teen drivers have the highest crash rates among all age groups, and this is the main reason why insurance companies charge them such high rates for car insurance.

The average price of minimum-coverage car insurance for an 18-year-old is $3,831 a year, which is more than two-and-a-half times the average rate available to a 25-year-old.

In separate research, we found that teens are charged 48% less when added to their parents’ car insurance than they are for their own policies.

Cheapest car insurance companies for seniors

Erie offers the cheapest car insurance for seniors, with full-coverage rates averaging $1,141 a year, followed by USAA, $1,381 a year, and American Family, $1,520 a year.

Senior citizens have slightly higher crash rates than middle-aged drivers, and this affects car insurance rates for those nearing their retirement years. Our research shows that 65-year-olds pay 2.6% more for car insurance than 60-year-olds.

How to get cheap car insurance

Although car insurance can get expensive, there are several steps you can take to get a cheaper rate. Here are some common ways to make your car insurance rates more affordable.

Compare quotes from multiple companies

Car insurance companies evaluate several factors about you and your car to determine your rate, including your age, location, driving record, insurance history and, in most states, your credit.

Since each company places different weights on these rate factors and offers different discounts, you may qualify for a significantly lower rate with one company than you do with others. This is why it pays to compare quotes from multiple companies every few years, or anytime you think your current company is charging too much.

Bundle policies

Most companies offer significant discounts for bundling your auto insurance with a homeowners or renters policy, or any other policy, such as one for a boat, motorcycle or second home.

The combined cost of multiple insurance policies is almost always lower when you bundle than it is when your policies are spread out among multiple companies.

Maintain a clean driving record

No one ever sets out to get a speeding ticket or other traffic citation, but if you do, consider a diversion program to get the infraction removed from your record.

In many states, you can attend traffic school to keep certain violations off your record, which, in turn, could spare you from a future insurance rate increase.

Avoid inexpensive claims

Insurance companies often add a surcharge to your rates for a few years after you file certain types of claims. In the long run, covering a $1,000 to $2,000 claim out of your own pocket may be cheaper than the combined costs of future rate increases.

Granted, it may be difficult to get a stranger to agree to let you cover the damages from a fender bender without getting your insurance companies involved. But if you back your own car into a light post, footing the repair bill out of your own pocket may save you some money down the line.

Consider a higher deductible or cutting back coverage

While collision and comprehensive coverage are worth having for a variety of reasons, choosing low deductibles may cost you more than they are worth.

Increasing your collision deductible is a particularly effective way to reduce your auto insurance rate. Since your deductible is the amount you pay on covered car repairs before insurance funds kick in, it’s important to avoid choosing one that is too high.

If your car is old or has a low resale value for any other reason, it may be wise to remove the collision and comprehensive coverage from your policy altogether.

Additional discounts to get cheaper car insurance

In addition to bundling your car insurance with other policies you may have, here are other common discounts that may also help you get cheaper car insurance.

Safe driving apps

Several insurance companies offer a sizable discount for enrolling in their safe-driver programs, which typically run on smartphone apps.

You can often get a discount of 5% or more just for activating the app. Once you sign up, the system monitors and rates your driving, based on how well you avoid unsafe behaviors such as speeding, hard braking and distracted driving. If you maintain a high enough rating, you typically qualify for additional discounts.

Driver education classes

Teens and mature drivers may qualify for discounts by completing an approved driver-education or driver-safety course, including some that are available online. The specific courses that may qualify you for a discount vary by company.

Low-mileage discounts

Several insurance companies offer a low-mileage discount to those who drive fewer than a certain number of miles per year. The thresholds vary by company.

As an alternative, consider a pay-per-mile insurance program, such as Allstate’s MileWise or Lemonade’s Metromile. With pay-per-mile insurance, you pay less when you drive less.

Good-student/away-at-school discounts

Most car insurance companies offer a good-student discount to high school and college students who maintain a B average or better. Several also offer a discount to parents with a young driver on their policy who moves away for college or other institution of higher learning.

Military and professional discounts

While USAA is best known for serving the military community, Farmers and GEICO are among the mainstream insurance companies that offer military discounts. Some companies also offer discounts to those with an advanced college degree or employed in certain professions, such as educators, nurses and engineers.

Frequently asked questions

Methodology

The rates shown in this article are based on an analysis of hundreds of thousands of quotes obtained from Quadrant Information Services for sample drivers in every U.S. state and the District of Columbia.

Unless otherwise noted, a typical sample driver is a 35-year-old male with a clean driving record and good credit. All rates are based on prices quoted for customers who drive a 2012 Honda LX for an average of 13,500 miles per year.

Minimum-coverage policies meet the minimum insurance requirements for the state reflected in each quote.

Full–coverage car insurance includes the following coverages, limits and deductibles:

• Bodily injury liability: $100,000 per person/$300,000 per accident
• Property damage liability: $100,000
• Collision: $500 deductible
• Comprehensive: $500 deductible
• Uninsured/underinsured motorist: minimum limits, where required
• Personal injury protection (PIP)/no fault-medical: minimum limits, where required

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