If you own a car, car insurance is a required expense in 48 of the 50 states. And if you don't shop around for your car insurance, you could be paying a much higher monthly premium than you need to be.
We researched and analyzed quotes from 51 companies in thousands of cities to determine which insurers had the lowest costs, nationally and in each state. Our team also evaluated which companies had the cheapest rates for certain types of drivers.
Find Cheap Auto Insurance Quotes in Your Area
Table of contents
What is the cheapest car insurance company?
After our analysis, we found that Erie was the most affordable major insurer in the country, with an average yearly rate of $1,521 based on our sample driver — about 46% cheaper than the national average across all 50 states and the District of Columbia.
How we determined the cheapest insurers: We collected quotes from 51 insurance companies across hundreds of ZIP codes (or more) in every state. Only insurers with rate data in at least five states were included in our list. Quotes were for a sample driver and policy as described in our methodology.
In the table below, you can see how the average annual rates for the 13 most affordable large auto insurers in the country compared based on online quotes we obtained for a sample 30-year-old driver.
Read past the table to see our recommendations for the cheapest insurers for particular driver profiles and states.
|3||Farm Bureau Mutual (IA Group)||$1,781|
The three cheapest car insurance companies
How rates with the cheapest insurers might change depending on your driver profile
A variety of factors can affect your car insurance rates, including your location, age, driving history, financial profile and, maybe most importantly, elected coverage. Our rates above were for a sample 30-year-old driver with a clean driving history.
Below, we show what the cheapest five insurers charge when we alter the sample driver's age, driving record and coverage limits.
|Company||30-year-old driver: Clean record||30-year-old driver: Accident history||30-year-old: Minimum coverage policy||18-year-old driver|
|Farm Bureau Mutual (IA Group)||$1,781||$2,675||$436||$3,580|
As you can see:
- Very young drivers and those with an accident history are charged much more than older drivers and those who have a clean record.
- Those who opt for a minimum coverage policy can also get considerable savings on their premiums, though they risk not being fully covered in the event of a major accident.
The cheapest insurers by state
The price of car insurance can vary greatly between states. One company may be expensive in Utah but inexpensive in New York. Although State Farm did not rank as our cheapest car insurance company overall, it was the cheapest widely available insurer, meaning it operates in more than 40 states.
Of the two cheaper options, Erie is limited to 12 states and Washington, D.C., and USAA's eligibility requirements make it restrictive.
In some states, a small, local company or affiliate could even offer you the best price. For example, the cheapest insurers on average in Georgia, Nebraska, Virginia and Utah are their local Farm Bureau affiliates.
Here, we've provided a list of the cheapest insurer in each state based on our data analysis. Click on your state to see a deeper analysis on the least expensive car insurance in your area.
|Georgia||Georgia Farm Bureau|
|Nebraska||Nebraska Farm Bureau|
|New Jersey||State Farm|
|New Mexico||State Farm|
|North Dakota||Grinnell Mutual|
|South Dakota||American Family|
|Utah||Farm Bureau Mutual|
|Virginia||Virginia Farm Bureau|
|Washington||Mutual of Enumclaw|
What is the cheapest car insurance company for you?
We identified the auto insurance companies with the cheapest rates, but depending on a variety of factors — location, driving history, financial profile and more — some insurers may be cheaper for certain types of drivers than others.
The cheapest car insurance companies
These are our recommendations for the cheapest companies on average and will guide you if you're just looking to get the lowest price. Shoppers looking for the best balance of affordability, strong customer service and features can read our recommendations for the best auto insurance companies.
Cheapest car insurance company overall: Erie
Erie is the cheapest insurance company — and reliable to boot, given its strong customer service reputation. Erie's main downside is that it's only available in certain states.
Whether you're looking for a car insurance policy that only meets your state requirements or a more extensive full-coverage policy, Erie was either the most affordable option, or close, for our sample driver.
Cheapest companies for a full coverage policy
|3||Farm Bureau Mutual (IA Group)||$1,781|
|5||Auto-Owners Insurance Co||$2,112|
Cheapest companies for a minimum coverage policy
|1||Farm Bureau Mutual (IA Group)||$436|
|3||Auto-Owners Insurance Co||$649|
Erie customers who are eligible for its rate lock program can avoid premium hikes that could cause rates to creep up over the years. This is a unique program where customers won't see their rates increase except for three reasons: you move to a different area, add or remove someone from your policy or add or remove a car.
Additionally, despite its smaller size, Erie offers the same types of discounts that larger national insurers provide. These include premium reductions for having multiple policies, a vehicle equipped with anti-lock brakes or anti-theft equipment, as well as savings for young and senior drivers.
Erie also scored high marks for policy options: It offers pet coverage, free accident forgiveness, free vanishing deductibles and roadside assistance, giving its customers a degree of flexibility not even found among the largest insurers.
The biggest downside to Erie is that it is only available in the following areas:
- District of Columbia
- New York
- North Carolina
- West Virginia
Cheapest auto insurance company after an accident: State Farm
We found State Farm raises car insurance rates the least after a driver is in a recent at-fault accident, compared to the many auto insurance companies we surveyed. State Farm's average rates after an accident increased by 19%, from $1,737 to $2,075, the smallest rate increase we saw of any company. On average, insurers increased rates by 41%.
How insurance rates increase after an accident
|Rank||Insurance company||Starting rate||After-accident rate||Percentage change|
|4||Auto-Owners Insurance Co||$2,112||$2,742||30%|
|10||Farm Bureau Mutual (IA Group)||$1,781||$2,675||50%|
Although Erie raised rates by 26% after an accident, a bigger penalty than State Farm, it remained the cheapest insurer for a driver with an at-fault accident on his record. But car insurance rates are highly variable, and the fact that State Farm penalizes drivers the least indicates that it is a good starting point for shoppers with an accident history looking for cheap insurance.
Other pros of State Farm include its positive marks for its customer service and claims handling.
- Our survey of current customers revealed that most customers are happy with the way they are treated by State Farm.
- 73% of respondents reported they were extremely satisfied with their most recent claims process with the insurer.
Cheapest car insurance company for military members: USAA
If you're a service member, a veteran or a family member of one, then you could be eligible for USAA auto insurance. If so, we found that USAA, not Erie, is the cheapest insurer in the country on average.
In fact, USAA is the cheapest company by quite a wide margin. With an average annual rate of $1,307 per year, it's 14% cheaper than Erie, the next most affordable option.
|Insurer||Average annual rate|
USAA stands out for more than just its affordability: It also has one of the best customer service reputations in the industry. According to our survey of current insurance customers, 62% of respondents rated its customer service as excellent and 78% were extremely satisfied with their most recent claim. Both those figures topped all qualifying insurers in the survey.
For more information, read about USAA's insurance offerings here.
Cheapest car insurance for low-mileage drivers: Metromile
If you find yourself away from the wheel more times than not, a pay-per-mile auto insurance company such as Metromile may be the best company to go with.
Metromile was one of the first companies in the U.S. to determine the bulk of a driver's premium based on how much they drive. How much driving is too much when shopping with Metromile? Generally, for Metromile to be a good deal, drivers should only drive fewer than 7,500 miles per year.
The biggest downside to Metromile is that it is only available in eight states: Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington.
Cheapest car insurance for those with a poor credit history: Farm Bureau Insurance
In many states, your local Farm Bureau office may provide some of the cheapest auto insurance rates around. Farm Bureau Insurance rates are particularly cheap for those who have a poor credit history.
Except in California, Massachusetts and Hawaii — where the practice is banned — insurers often use your credit score to calculate your rates. Poor credit scores can result in much higher car insurance rates.
Our analysis found that when an identical driver had a poor credit score instead of an identical credit score, he only paid 36% more with a Farm Bureau affiliate. This was the fourth-lowest percentage increase among our sample insurers, but the three companies ahead of the Farm Bureau have high rates (Nationwide or Metrolife) or restricted eligibility (USAA).
|Company||Rates with excellent credit||Rates with poor credit||% difference|
|Farm Bureau Mutual||$320||$436||36%|
|Auto-Owners Insurance Co||$347||$649||87%|
Shoppers should note that the Farm Bureau and its affiliates will often have an annual membership fee, which should be taken into account when comparing premiums to other insurers.
On average, our sample insurers charged rates 58% higher if a driver had poor credit instead of excellent credit, so improving your credit score is a great way to garner big savings on your insurance policy.
Finding the cheapest car insurance coverage for you
Broadly speaking, you should take two key steps to find the cheapest car insurance for you.
- Ensure you're shopping for the appropriate level of car insurance coverage.
- Shop for quotes between multiple insurers, including our top recommendations. When shopping, be sure to take advantage of all available discounts.
Taking the first step — knowing how much car insurance you need — is important for finding appropriately cheap car insurance because:
- You don't want to overpay for unnecessary coverage.
- But you do want to purchase enough to fulfill legal requirements and to appropriately cover your risk.
- Finally, you'll have to define your appropriate coverage limits to make fair price comparisons across insurers.
Determining how much auto insurance you need comes down to understanding your current economic circumstances, how the different types of coverage work together and your state requirements.
The following table gives a quick summary of the types of auto insurance coverage, whether you need them and how much you should have.
|Type of coverage||Do you need it?||How much coverage do we recommend?|
|Bodily injury liability||Required in every state except Florida||Per accident limits approximating your net worth|
|Property damage liability||Required in every state||Per accident limits approximating your net worth|
|Uninsured/underinsured motorist coverage||Only required in 22 states||Per accident limits approximating your net worth if you don't have both personal injury protection and collision insurance|
|Collision and comprehensive||If you lease a car or finance your purchase, your lender may require it. Otherwise, it's not required by state law||As a rule of thumb, recommended only if your car is worth more than $2,000|
|Personal injury protection (PIP) or medical payments coverage||Only required in 14 states||If you don't have health insurance or your health insurance doesn't cover auto-related injuries, we advise purchasing an affordable amount of PIP|
How much coverage limits you should buy will depend on your economic situation. For example, high-net-worth individuals should get liability limits approximating their net worth, which will probably exceed the state-required minimums.
Read more about how much coverage you need for each part of a car insurance policy.
Now that you've determined how much car insurance you need, shop around between insurers and apply all discounts possible
Once you know how much coverage to buy, it's time to compare car insurance companies. Even when you opt for the exact same coverage levels with two different insurers, one company could be much cheaper for you than another based on how it calculates its rates.
It's easier than ever to compare insurance quotes using online quote tools. But you may want to talk to an insurance agent to ensure you get the most accurate quote possible
By talking to an agent, you can see if you qualify for discounts that may not be applied in the online quote tool process. Car insurance discounts are generally broken into four categories:
- Driver safety discount: Cheaper rates for having a safe driver history or taking defensive driving courses.
- Driver status discount: Discounts lifestyle elements that insurers reward with cheaper rates. These can range from incentives — such as a student getting savings for obtaining good grades — to elements you can't control, such as a senior discount for those of a certain age.
- Policy discount: Savings offered for buying more products or coverage from a particular insurer. The most common discount of this type is a home and auto bundle, in which you get big savings from buying home and auto insurance with the same company.
- Vehicle discount: If features of your vehicle increase its safety, such as anti-theft technology, you may qualify for a discount.
Chances are you're overpaying for your insurance policy
ValuePenguin analyzed nationwide insurance rates and found that a driver looking for a state-mandated insurance policy — the minimum coverage required — overpays by an average of $330 per year. Extrapolated across the country as a whole, this means Americans are overpaying for car insurance by almost $37 billion per year.
Once you know how much coverage you need, the best way to find cheap car insurance is to compare quotes from multiple companies.
This can be done online, as most companies have quote tools that can be used to get car insurance rates. Additionally, if you prefer to work with an actual person when looking for car insurance, you could talk to an independent insurance agent who can help you compare rates from multiple companies.
Younger drivers feel more loyal to their insurance providers, yet are least happy with their current service
Despite feeling dissatisfied with their insurance experience, younger drivers feel the most loyalty to their insurers, according to ValuePenguin’s consumer survey. The findings indicate that young drivers may not always be aware of the financial upside of shopping between insurance companies, a fact that could eventually hurt insurance companies should policyholders realize cheaper rates may be available elsewhere.
While Gen Z drivers were found to be the least happy with their insurance provider of any age group, they are also the most loyal age group to their providers: 79% of Gen Z drivers report feeling loyal to their insurance provider, compared to just 66% of Boomers. Despite their loyalty, Gen Z was also the most savings-driven age group: They were the most likely to spend time looking for a deal if they knew they could save $100.
|Query||Gen Z||Millennials||Gen X||Boomers||Silent Generation|
|Happiness with their current provider would keep them from comparing auto insurance quotes||51%||59%||67%||69%||70%|
|Would spend an hour each year comparing quotes to save $100||70%||70%||62%||46%||52%|
|Feels loyalty to their insurance provider||79%||72%||74%||66%||63%|
In fact, all age groups looking for cheaper car insurance could benefit from comparing quotes. Seventy percent of drivers would be willing to switch insurance companies if they can save $25 to $200 per year. The difference between our second cheapest insurer in our analysis (State Farm) and our cheapest insurer (Erie) is over $200 annually, showing how even switching between two comparably affordable insurers can result in big savings.
Methodology: How we got our info
We collected quotes for thousands of ZIP codes in the U.S. for 51 insurance companies. Our sample driver was a single 30-year-old man who drove a 2015 Honda Civic EX and had a clean driving record. The only parameter that changed was the ZIP code where he lived in the U.S. These rates are for this specific driver profile and your results may vary. The amount of coverage we opted for gave our driver a bit more than what is required of state minimums:
|Coverage type||Study limits|
|Bodily liability||$50,000 per person/$100,000 per accident|
|Property damage||$25,000 per accident|
|Uninsured/underinsured motorist BI||$50,000 per person/$100,000 per accident|
|Comprehensive and collision||$500 deductible|
|Personal injury protection||Minimum when required by state|
ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.
For its consumer survey, ValuePenguin commissioned Qualtrics to conduct an online survey of 866 Americans who have home and/or auto insurance, with the sample base proportioned to represent the general population.
ValuePenguin calculated the average amount drivers overpay for car insurance by calculating the difference between:
- The average cost of a minimum coverage policy across all sample insurers in each state
- The average cost of the cheapest sampled insurers in that state
These figures were then averaged across all 50 states and Washington, D.C., to find a national average. This average was multiplied by the Federal Highway Administration's latest figure for the number of registered automobiles in the country to find the aggregate amount drivers overpay for insurance.