Best Low Income Car Insurance 2023

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With the cost of insurance increasing at a rate of up to 12% annually, drivers with tight budgets may feel the financial strain. Luckily, there are low-income car insurance options that can help you stay covered without breaking the bank. Depending on where you live, low-income drivers may qualify for state-subsidized car insurance programs. Beyond that, there are discounts and tips for lowering your premium

How Much Is Standard Car Insurance for Low-Income Drivers?

In 2021, the average cost of car insurance in the U.S. is $1,450 annually ($120.83 per month). Your premiums will depend greatly on where you live, as each state has different required minimums for liability car insurance. Many factors will affect your auto insurance rate, including:

  • Driving and claims history

  • Where you live

  • Car model and mileage

  • Credit score

  • Personal information (e.g., age, gender, marital status)

  • Amount of coverage

In 2021, the average cost of car insurance in the U.S. is $1,450 annually ($120.83 per month).

Cheapest Car Insurance Companies for Low-Income Drivers

Below, we've compiled the most affordable premiums among national and local auto insurance companies.

Affordable Car Insurance from National Carriers


Monthly Premium



State Farm


American Family










Liberty Mutual


Find Cheap Insurance for Low-Income Drivers

Affordable Car Insurance from Small Carriers

National Carrier

States Served

Monthly Premium

Concord Group

Maine, Massachusetts, New Hampshire, Vermont


American National P&C

All 50 states


Countryway Insurance

8 northeastern U.S. states, Virginia and Kentucky


North Carolina Farm Bureau

North Carolina


Bear River



Buckeye Insurance Group

Ohio, Indiana and Kansas


MMG Insurance Company

Maine, New Hampshire, Vermont, Pennsylvania and Virginia


Utica National Insurance Group

All 50 states


Pekin Insurance

Arizona, Indiana, Iowa, Ohio, Wisconsin


Virginia Farm Bureau



State-Subsidized Car Insurance for Low-Income Drivers

State-subsidized car insurance programs are available in California, New Jersey and Hawaii.

In California, the Low-Cost Automobile program (CLCA) provides income-eligible drivers with liability insurance at an affordable rate. Each policy provides liability coverage for the vehicle's primary driver and eligible secondary drivers.

In New Jersey, the Special Automobile Insurance Policy (SAIP) offers low-cost medical coverage for drivers enrolled in federal Medicaid with hospitalization.

In Hawaii, the Assistance to the Aged, Blind and Disabled (AABD) program provides free no-fault car insurance, plus financial assistance and cash benefits for food, clothing, shelter and other essentials.

State-subsidized car insurance programs are available in California, New Jersey and Hawaii.

Below is a summary of the insurance coverage options, cost and requirements for each program.



New Jersey



Low-Cost Automobile (CLCA) Insurance

Special Automobile Insurance Policy (SAIP)

Assistance to the Aged, Blind and Disabled (AABD)


  • Bodily injury liability: $20,000

  • Property damage liability: $3,000

  • Uninsured motorist: $20,000

  • Medical payments: $1,000/person

  • Emergency medical treatment: $250,000

  • Death benefit: $10,000

  • No-fault insurance


Starting at $263




  • Income within 250% of federal poverty limit

  • Car worth less than $25,000

  • Maintain good driving record

  • Be enrolled in Medicaid with hospitalization

  • Meet the SSA definition of disabled or blind.

  • Be 65+ years old

  • Income below 34% of federal poverty line

Ways Low-Income Families Can Save on Car Insurance

If you don't qualify for a state-subsidized insurance program, there are other ways to save on car insurance, including special discounts, paying a higher deductible, reducing your coverages and more.

Take Advantage of Discounts

There are multiple car insurance discounts available based on your driving behaviors, policy and car model. Some common ones include:

  • Try Bundling. If you have auto insurance and home insurance at the same company, bundle the policies together. You'll save money on your premiums.

  • Good Driver Discount. Be a squeaky-clean driver with no at-fault accidents, no speeding tickets, no moving violations, no DUIs and you'll qualify for a good driver discount and save money on car insurance.

  • Check Car Safety Features. Having certain anti-theft features and safety features on your car will lower your car insurance premium. So check to see if the features on your car warrant a discount.

  • Low-Mileage Discount. Drivers who maintain low mileage pay less for car insurance. So cut back on your mileage and save.

  • Take a Driver Safety Class. You'll brush up on the rules of the road and on safe driving behaviors with a driver safety class. Taking the class will save you money on your car insurance.

  • Pay in Full. You can receive a discount if you pay for your entire auto insurance policy upfront. While this may be a significant one-time cost for low-income drivers, the savings may be worth the effort.

  • Affinity. Low-income drivers may qualify for a premium discount if they hold a certain occupation (e.g., nurse, teacher, military) or if they belong to a certain organization, such as a credit union.

  • Good Student. Students that maintain good grades may qualify for a good student car insurance discount. Your insurer may require you to show proof by supplying a copy of your grades and a form signed by your school administrator.

Pay Per Mile

If your mileage is low, then pay-per-mile insurance can be an affordable alternative to a traditional car insurance policy. Pay-per-mile programs are offered by multiple car insurance carriers, including Nationwide, Allstate, Liberty Mutual and MetroMile.

Raise Your Deductible

Raising your deductible — your out-of-pocket cost before insurance covers the difference — can lower your monthly premiums (and vice versa). This tip should only be used by good drivers with a clear or minimal accident history. Accident-prone drivers may be paying more out of pocket than they'd like.

Drive a Safer Car

Cars with better safety ratings are cheaper to insure. Insurance carriers may provide safety discounts on newer models because they have built-in safety features, such as anti-lock brakes, backup cameras and adaptive headlights.

Not sure how your car stacks up? Check safety ratings with the Insurance Institute for Highway Safety and National Highway Traffic Safety Administration.

Drive a Cheaper Car

Another way to get low-income auto insurance is to drive a cheaper car. Luxury cars tend to be more costly to insure and often rack up higher repair bills. While a new car may net you a new car discount, depending on your insurance carrier, older models may cost less to insure because the insurer would have to pay less in the event of a total loss.

Try a Telematics Program

If you're a good driver, consider an insurance program that uses telematics. Telematics is a technology that monitors driving behaviors, such as your speed, braking and driving hours. The insurance carriers use this data to determine your premiums — safer drivers will qualify for lower premiums.

  • With Progressive Snapshot, drivers can save an average of $145 a year with safe driving.

  • Allstate Drivewise, drivers can save 40% or more off premiums.

  • With State Farm Drive Safe & Save, you can save up to 30%.

  • Drivers with Esurance DriveSense gain a 5% discount when signing up.

  • At Nationwide, you can save up to 40%with its SmartRide program.

  • At Liberty Mutual, you can save up to 30% with RightTrack.

Avoid Letting Your Coverage Lapse

Besides breaking the law of driving without insurance (and getting your driver's license suspended), you risk increasing your insurance rates in the future if you let your policy lapse. A cost-saving alternative would be to reduce your coverages to the necessary minimum, increase your deductible and drive cautiously to avoid accidents and insurance claims.

Exclude High-Risk Drivers From Your Policy

If you're a safe driver but there's somebody else in your household increasing your rates, consider excluding that high-risk driver from your insurance policy. That way, your premium can reflect your positive driving history and safe driving habits. Just make sure the excluded driver gets their own insurance so they stay covered.

Reduce Your Coverage

Reducing your car insurance coverage can save you money and is often worth it if your car's value is nominal. But you'll want to be careful about reducing coverages — cut back too much liability insurance and you're financially vulnerable when you're at fault in an accident. If you have inadequate coverage, you may have to pay for medical bills and property damage out of your own pocket.

Compare Rates

When looking for affordable auto insurance, don't accept the first carrier you find. You'll want to obtain cheap auto insurance quotes from multiple carriers to get the price that best meets your budget and coverage needs.

Improve Your Credit Score

Many insurance companies used credit-based insurance scores as one of many factors when determining your insurance premiums. Insurance scores are calculated based on information pulled from your credit report, such as payment timeliness, total outstanding debt and credit utilization ratio. Improving your credit score should also improve your insurance score and may lead to lower premiums.

If you discover an error on your credit report, you can get it removed and ask your insurance company to re-calculate your insurance score. If your score improves, your insurance company can potentially lower your auto insurance premium.

Low-Income Car Insurance FAQs

Does Income Affect Your Car Insurance?

Insurance companies don't look at your income when offering you a rate. However, in many states your credit score is used to determine a rate. Therefore, people with higher incomes generally have higher credit scores because they pay all their bills on time and don't carry as much unresolved debt. With that said, many people with low to moderate incomes have great credit scores so keep your car insurance premiums low by not extending your credit and by paying all your bills on time!

What is low-income car insurance?

Low-income car insurance generally refers to state-subsidized car insurance programs that target low-income individuals. Examples include the California Low-Cost Automobile (CLCA) insurance program and New Jersey's Special Automobile Insurance Policy (SAIP).

Can you get free car insurance?

Hawaii offers free no-fault insurance for the elderly and those who struggle with disabilities. Beyond that, there are generally no providers that offer free car insurance. Some states have affordable insurance programs that are state-subsidized — New Jersey's Special Automobile Insurance Policy, for example, provides medical expenses coverage starting at $1 per day.

How much coverage do I need with low-income car insurance?

You will need to meet the minimum required amount of liability coverage, which varies by state. However, you may want to consider additional coverages, such as collision and comprehensive, to stay protected against theft, vandalism and more.

What happens if I cancel my car insurance?

Car insurance is legally required in most states, even if you leave it parked on the street, and you can face heavy fines and penalties if you're caught driving without car insurance. Most insurance providers frown on lapses in coverage and may charge you higher auto insurance rates when you reactivate your policy.

How do you get car insurance if you're poor?

If you live in California, New Jersey, Maryland or Hawaii, you may qualify for a state-subsidized car insurance policy. The requirements will vary by the program — California's Low-Cost Automobile program, for example, requires that your annual income fall within 250% of the federal poverty level. Other ways to save money is to leverage discounts, such as bundling car and renters insurance and maintaining a clean driving record.

Is car insurance cheaper if you are unemployed?

Most insurance carriers do not price premiums based on your employment status. Instead, the insurance carrier will consider your driving history, car model and coverage add-ons and other factors.

Can you get car insurance with no income?

No. Generally, you will need to pay a premium to gain auto coverage.

How do you get car insurance if you can't afford it?

Some states like New Jersey and California have programs for low income drivers, but if there is not one, you're best off comparing car insurance rates to get the best deals. Ask the agent about discounts, which can lower your rate considerably. Improving your credit score and keeping a clean driving record will lower your rate as well. It may also make sense to buy a used car that has low insurance payments and only requires state minimum insurance. Financing or leasing a car requires that you carry collision and comprehensive coverages, which will increase your premiums.

What happens if you don't pay your car insurance?

You'll likely get a reminder, with a grace period, but it's important to make a payment ASAP or else you'll have a lapse in insurance, which will cause your rate to increase dramatically when you go to reinstate the policy or buy a new one. Lapses in insurance stay on your record.

What is the minimum amount of car insurance you need?

Nearly all states require drivers to carry bodily injury liability insurance with limits ranging from $15,000 to $50,000 per person and $30,000 to $100,000 per accident. Property damage liability minimum limits can range from $5,000 to $2,500 per accident.

Some states also require uninsured/motorist liability insurance, with bodily injury minimum limits ranging from $20,000 to $50,000 per person and $40,000 to $100,000 per accident. Uninsured/underinsured motorist property damage minimum limits can range from $5,000 to $25,000 per accident.

Grab Your Free Quotes for the Lowest Car Insurance Rates

Car insurance is required in most states, and the last thing you want is to get caught driving without it — even if you are strapped for cash. But securing a low-cost car insurance policy when you're driving on a budget is not always quick or easy.

SmartFinancial can help. A comparison of over 200 insurers will show you the lowest car insurance quotes in your area. All you need to do is enter your zip code below and answer a few simple questions.

Get a Free Auto Insurance Quote Online Now.