The Best Car Insurance for Low-Income Drivers 2024

secure Editorial Standards

SmartFinancial Offers Unbiased, Fact-based Information. Our fact-checked articles are intended to educate insurance shoppers so they can make the right buying decisions. Learn More

To find the best car insurance policy as a low-income driver, you should compare quotes from multiple carriers, opt for lower coverage amounts when appropriate and seek out discounts that can easily drop your car insurance premium. In addition, you should note that a small handful of states have government-subsidized car insurance programs that can provide free or low-cost coverage to residents who meet certain eligibility requirements.

Continue reading for more information on low-income car insurance such as what car insurance companies tend to offer cheap coverage and what steps you may be able to take to make auto insurance more affordable for yourself.

Key Takeaways

  • Low-income drivers may encounter lower-than-average car insurance premiums from midsize insurance companies like American National and California Casualty or large insurance companies like USAA and GEICO.
  • Car insurance is required by law in nearly every state, so you should attempt to find a cheaper policy by shopping around, forgoing unnecessary coverage types and asking about discounts you may be eligible for rather than canceling your auto insurance.
  • There are state-funded programs in California, Hawaii and New Jersey that offer free or cheap car insurance coverage to eligible low-income residents.

What Happens if I Can’t Afford Car Insurance?

In general, forgoing car insurance because you feel you cannot afford it is not an option because auto insurance is required by law in almost every state. Even states that don’t mandate coverage do impose an alternative financial requirement on drivers who opt to remain uninsured.

For example, you must pay an annual $500 fee to drive without car insurance in Virginia, while you must prove that you have enough money to cover someone else’s medical or repair bills out of pocket after an at-fault accident if you want to go without coverage in New Hampshire.[1][2]

Similarly, you should not cancel your policy temporarily with the intention of starting your coverage again later when you have saved up more money because a car insurance lapse can cause your auto insurance rates to go up whenever you reinstate your policy. As a result, if you are struggling to pay your car insurance bill, you should look into various options for lowering your bill rather than getting rid of your car insurance coverage altogether.

Which Car Insurance Companies Are Cheapest for Low-Income Drivers?

See the below table for a rundown of large and midsize auto insurers that tend to charge less than the national average premium of $40.25 per month for minimum coverage, making them some of the cheapest car insurance companies for low-income drivers.[3][4]

Insurance Company

Median Monthly Premium

American National




California Casualty












State Farm


American Family


*USAA only sells coverage to current or former military personnel and their families

Are There Programs That Help Low-Income Drivers Get Insurance?

California, Hawaii and New Jersey offer government-funded programs that can make auto insurance more accessible for low-income drivers who meet certain eligibility requirements. See the sections below for a more thorough overview of each state’s program.


The California Low Cost Auto Insurance Program, also known as CLCA, charges around $16.50 to $66.83 per month for coverage depending on factors like your county, driving history and payment method. To qualify for the CLCA, you must meet the following eligibility criteria:[5]

  • Possess a valid California driver’s license
  • Own a car worth $25,000 or less
  • Be at least 16 years old if legally emancipated or 18 years old otherwise
  • Have a clean driving record
  • Meet the income requirements outlined in the table below

Number of People in Household

Maximum Annual Income











CLCA policies come with 10/20/3 liability coverage limits, meaning they include $10,000 in bodily injury liability insurance per person, $20,000 in bodily injury liability insurance per accident and $3,000 in property damage liability insurance per accident, which is less than California’s minimum requirement of 15/30/5 in liability coverage for all non-CLCA policies.[5][6]

For an extra charge of around $3 to $7 per month, you may also be able to add $1,000 worth of medical payments coverage, $10,000 worth of uninsured motorist bodily injury coverage per person and $20,000 worth of uninsured motorist bodily injury coverage per accident to your CLCA policy.[5]


Residents of Hawaii can get no-fault auto insurance for free if they meet the following eligibility requirements:[7]

  • Receive public assistance benefits through the Social Security Administration or the Hawaii Department of Human Services
  • Have a valid Hawaii driver’s license or are unable to operate their own vehicle due to a permanent disability
  • Be the only registered owner of their vehicle
  • Have exhausted all other paid no-fault coverage that was in effect

In general, no-cost coverage only applies to one vehicle per household but may be extended to additional non-commercial vehicles if they are used for employment or transportation to a medical facility at least twice per month.[7]

New Jersey

New Jersey’s Special Automobile Insurance Policy (SAIP) initiative offers cheap coverage to people enrolled in federal Medicaid with hospitalization. It is colloquially known as dollar-a-day insurance because it costs $360 per year if you pay in one installment or $365 per year if you pay in two installments, which comes out to around $30 per month. SAIP coverage includes a $10,000 death benefit and $250,000 worth of medical coverage for emergency care following a car accident and subsequent treatments for serious brain and spinal cord injuries.[8]

If you aren’t eligible for SAIP, you could also save money by purchasing a basic policy from any licensed insurance carrier in New Jersey. Basic policies do not have strict eligibility requirements and may be cheaper than standard policies because they provide less coverage. Specifically, basic policies are only legally required to include $5,000 in property damage liability coverage and $15,000 per person in personal injury protection (PIP), while standard policies must include 25/50/25 in liability coverage and $15,000 per person in PIP.[9]

How Can Low-Income Families Save On Insurance?

The best way for low-income families to save on auto insurance is to find the cheapest car insurance company by comparing quotes. Car insurance companies have different methods for calculating premiums, meaning one insurer may offer you a more favorable rate than another. Click here to begin a seamless car insurance quote comparison process through SmartFinancial.

Another step to consider is removing unnecessary coverage types from your policy. For example, if you have an older vehicle that is paid off, you may want to drop comprehensive and collision coverage if you are spending more than 10% of your car’s value on their combined premiums.[10] That said, you should note that state-mandated liability coverage limits are generally low as is, so you should try to purchase a policy with higher coverage limits if you can afford it.

You may also be able to lower your premium by improving your credit score or raising your deductible as long as you have enough money saved up to cover it in case of an accident. Finally, consider taking advantage of common car insurance discounts such as the following:

  • Safe driving: One of the best ways to keep your car insurance costs low is by practicing safe driving behaviors. Many insurance companies offer good driver discounts to drivers who have gone multiple years with no at-fault car accidents or other traffic violations.
  • Student: Insurers often offer discounts for families with students in their households. For example, you may qualify for a good student discount if your child maintains a B average in school or a student-away-from-home discount if your child is away at college and rarely drives their car.
  • Anti-theft: While it may require a bit of an upfront investment to purchase an anti-theft device like a car alarm, doing so may enable you to secure a lower car insurance rate.
  • Bundling: You may be able to earn a bundling discount by purchasing auto insurance from the same company that underwrites your homeowners or renters insurance.
  • Multi-car: If there are multiple drivers in your household, you may be able to earn a multi-car discount simply by adding all of your vehicles to the same policy.
  • Preferred payment: Some insurers will give you a discounted premium if you pay for coverage through their preferred payment method. This may involve paying automatically through an electronic funds transfer (EFT) or paying for an entire year up front rather than paying in monthly installments.
  • Telematics: When you use a telematics device or app, your insurance company can remotely track your driving data and may reward you with a lower premium if you consistently exhibit safe driving habits. Similarly, you may be able to opt into a pay-per-mile car insurance program that rewards you with a lower rate if the telematics technology reveals that you drive infrequently. However, this could also lead to your rate increasing if you drive frequently or exhibit unsafe driving habits like speeding.

common car insurance discounts

Find Cheap Insurance for Low-Income Drivers


Does income affect car insurance rates?

Auto insurance companies don’t explicitly take your income into account when setting your premiums but they may consider factors that are correlated with your income such as your address, homeownership status, level of education and credit score.

Can I get free car insurance?

Free government car insurance for low-income drivers is only available in Hawaii for people who receive public assistance benefits from the state or federal government.[7]

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

Regardless of your income, you will generally need to purchase a car insurance policy that meets your state’s minimum requirements. That said, some states like California and New Jersey allow lower coverage limits on certain specialized low-income auto insurance policies that may be a good fit for some drivers.[5][9]

How much is standard car insurance for low-income drivers?

The average cost of car insurance across the country is around $40 per month for minimum coverage car insurance and around $142 per month for full coverage car insurance.[3]


  1. Virginia Department of Motor Vehicles. “Insurance Requirements.” Accessed June 6, 2024.
  2. New Hampshire Insurance Department. “2022 Automobile Insurance Consumer Frequently Asked Questions,” Page 5. Accessed June 6, 2024.
  3. NerdWallet. “Average Cost of Car Insurance.” Accessed June 6, 2024.
  4. NerdWallet. “Don’t Overpay: Cheapest Car Insurance Companies in 2024.” Accessed June 6, 2024.
  5. California’s Low Cost Insurance. “FAQ.” Accessed June 6, 2024.
  6. California Department of Motor Vehicles. “Auto Insurance Requirements.” Accessed June 6, 2024.
  7. Hawaii Department of Human Services. “Chapter 654. Hawaii No-Fault Insurance,” Pages 2-3. Accessed June 6, 2024.
  8. New Jersey Department of Banking and Insurance. “Special Automobile Insurance Policy.” Accessed June 6, 2024.
  9. New Jersey Department of Banking and Insurance. “New Jersey’s Basic Auto Insurance Policy.” Accessed June 6, 2024.
  10. Insurance Information Institute. “Nine Ways To Lower Your Auto Insurance Costs.” Accessed June 6, 2024.

Get a Free Auto Insurance Quote Online Now.