The Cheapest Car Insurance Companies (August 2022)

The Cheapest Car Insurance Companies (August 2022)

State Farm has the cheapest car insurance quotes among the top insurance companies, at $44 per month.

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Did you know the exact same driver could be charged $39 per month by one car insurance company and $255 per month by another? Our analysis — based on millions of car insurance quotes from 37 companies across the country — confirms the best way to save on car insurance is to shop around and get multiple quotes.

To rank the best cheap insurance companies according to our methodology, ValuePenguin's editorial team spent hundreds of hours collecting quotes from 37 insurance companies across thousands of ZIP codes in every state. Our insurance experts analyzed each company's cost, availability and customer support to help you find a company near you that offers both affordable coverage and great service.

The 10 cheapest car insurance companies

State Farm and USAA are the most affordable major car insurance companies in the country. State Farm offers an average rate of $44 per month for a minimum-liability policy, 26% below the national average. USAA costs an average of $36 per month, although only active military members, veterans or their families can qualify.

Cheapest car insurance companies

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Among companies that have a smaller national footprint, Farm Bureau Insurance, at $39 per month, and Auto-Owners, at $40 per month, rank as the cheapest. Erie's in a close third place at $42 per month.

Smaller car insurance companies sometimes offer lower rates because they compete with much bigger companies. Some also deliver more local knowledge or a personal touch because they're based in your state or community.

Monthly cost
USAA logo
Farm Bureau logo
Farm Bureau$39
Auto-Owners logo
Erie logo
State Farm logo
State Farm$44
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What is the cheapest car insurance company for you?

To find the cheapest car insurance for you, start by getting quotes from the auto insurance companies with the cheapest rates. Depending on a variety of factors — location, driving history, credit score and more — some companies may have cheaper quotes for certain drivers than others.

If you're looking for the cheapest companies that also offer the best balance of affordable rates, strong customer service and coverage options, compare the best auto insurance companies.

Cheapest car insurance company overall: State Farm

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State Farm is the largest auto insurance company in the country, with the cheapest widely available quotes in 29 states. Additionally, the company boasts an enormous network of local agents, meaning there's likely a State Farm agent in your city who can help you compare rates.

State Farm is the best and cheapest car insurance company for most drivers, considering that USAA has eligibility restrictions, and Farm Bureau and Auto-Owners are disproportionately expensive when you add more coverage.

Cheapest for full coverage

Cheapest for minimum liability

Monthly cost
2State Farm$109
4Farm Bureau$131

A full-coverage policy includes both collision and comprehensive insurance, protecting you against damage to your car, not just the legal liability of hurting or injuring other drivers.

Cheapest for full coverage

Monthly cost
2State Farm$109
4Farm Bureau$131

A full-coverage policy includes both collision and comprehensive insurance, protecting you against damage to your car, not just the legal liability of hurting or injuring other drivers.

Cheapest for minimum liability

Monthly cost
2Farm Bureau$39
5State Farm$44

State Farm also scores high marks for policy options. It offers pet coverage, rideshare insurance and roadside assistance. Customers also have plenty of options to bundle and even further lower their rates.

Drivers with State Farm can enroll in programs such as Drive Safe & Save to turn good driving habits into affordable quotes. You can also qualify for a range of discounts, including an accident-free discount, multicar discount and anti-theft discount.

Cheapest car insurance rates after discounts: Geico

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Geico has some of the cheapest car insurance in the country, second only to State Farm among the biggest companies.

Depending on where you live, Geico may have cheaper quotes for you than State Farm. Geico's the cheapest company in seven states, including California and Florida.

Geico stands out when it comes to potential savings through discounts. Though Geico's car insurance rates are slightly more expensive than State Farm on average, you may pay less overall if you qualify for Geico's many car insurance discounts.

Geico has one of the longest lists of discounts available, and how much you can save with each discount is higher with Geico than most companies.

For example, Geico offers safe drivers a discount of up to 22%, compared to the average of 10%. Having anti-theft devices installed in your car typically saves you up to 15%, but Geico promises savings up to 23%.

Number of car insurance discounts
American Family16
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Cheapest auto insurance company for a bad driving record: Erie

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Erie has some of the most affordable car insurance quotes for drivers with a ticket or accident on their driving record. And you probably won't find a better rate if you have a DUI (driving under the influence) on your driving record. Erie also increases auto insurance rates the least after a driving incident.

Erie will only raise your rates by an average of 7% if you get a ticket, while most insurers increase premiums by 22% or more. For an at-fault accident, Erie will only raise your rates by 25% instead of the average 44%. And Erie's average quote with a DUI is $188 per month, an increase of 64%. Expect other companies to double your rates after a DUI.

Cheapest car insurance companies after a driving incident

State Farm$122$136$299
Farm Bureau$148$176$234
American Family$171$226$236
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Monthly quotes for a full-coverage policy

Erie also has a strong customer service reputation and a good set of insurance options.

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 or change where you park your car, add or remove someone from your policy or add or remove a car.

That means your car insurance costs won't go up even if you happen to get a ticket or file a claim.

Erie also offers the same car insurance discounts as larger national companies, including bundling multiple insurance policies, having a vehicle equipped with anti-lock brakes or anti-theft equipment or driving safely as a young or senior driver.

The biggest downside to Erie is that it's only available in 12 states plus DC:

  • District of Columbia
  • Illinois
  • Indiana
  • Kentucky
  • Maryland
  • New York
  • North Carolina
  • Ohio
  • Pennsylvania
  • Tennessee
  • Virginia
  • West Virginia
  • Wisconsin

Cheapest car insurance for teens and parents: Auto-Owners

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The cheapest way to get car insurance for a teen driver is usually to stay on a parent's policy. Auto-Owners has some of the cheapest rates for drivers under age 21 on their parent's plan.

The biggest downsides are that Auto-Owners is only available in 26 states, and that you'll need to contact an agent to get a quote.

Parent and teen
Teen only
Farm Bureau$190$350
State Farm$218$293

Monthly quotes for a full-coverage policy for an 18-year-old driver versus a 50-year-old parent with a teen driver

Auto-Owners also consistently scores well on customer service ratings. You can contact support or make a claim through your dedicated agent, the mobile app or your online account. That's especially important for young drivers away at college who might not be able to get home to talk to their local agent in person.

Cheapest car insurance for safe and low-mileage drivers: Metromile

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If you drive less than average or are generally a safe driver, a usage-based or pay-per-mile auto insurance company such as Metromile may be the cheapest insurance for you.

Metromile was one of the first companies in the U.S. to determine car insurance quotes largely based on mileage. How much driving is too much when shopping with Metromile? Generally, for Metromile to be a good deal, you should drive fewer than 10,000 miles per year.

Usage-based insurance is often cheaper than standard car insurance because your rates are largely based on how often and how well you drive. It's a good option for people who are generally safe drivers but can't find cheap rates elsewhere because they're young, have poor credit, live in a congested city or have other risk factors that raise their insurance rates.

That means Metromile could offer cheap car insurance for people who are retired or work from home, students who live on campus and young drivers with a clean driving record.

The biggest downside to Metromile is that it's only available in eight states: Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington. If you don't live in one of those states, consider other telematics programs that offer discounts for less driving or safer driving, like Nationwide, Liberty Mutual or State Farm.

Cheapest car insurance for drivers with poor credit: Farm Bureau

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Overall, Farm Bureau is the cheapest auto insurance company for drivers with poor credit, averaging $107 per month. Farm Bureau's average rate is 12% cheaper than average for drivers with poor credit.

Poor credit
Very good credit
Rate hike
Farm Bureau$107$5883%
American Family$113$6283%
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Monthly fully coverage rates for a typical driver

Farm Bureau operates like AAA: nearly every state has a local chapter that offers cheap insurance policies and other benefits to members. Anyone can become a member, not just farmers, but you'll need to pay an annual membership fee, which can range from $20 to $100 per year. Membership benefits also include discounts on car purchases, farm equipment, produce, healthcare, travel, rental cars and more.

Drivers with poor credit typically receive insurance quotes that are 99% higher on average compared to drivers with excellent credit. Improving your credit score is a great way to get big savings on your insurance policy.

Cheapest car insurance quotes for military members: USAA

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USAA is the cheapest car insurance company on average by quite a wide margin for drivers who qualify, beating average car insurance quotes by $24 per month.

Monthly cost
Farm Bureau$39
State Farm$44
Average of all insurers$60

USAA covers drivers in all 50 states and Washington, D.C., but only active military members, veterans and their families may be eligible. However, as the fifth-largest auto insurance company in the country, it serves almost as many drivers as other big names like Progressive and Allstate.

USAA stands out for more than just affordable rates: It also has one of the best customer service reputations in the industry. The company takes the top spots in J.D. Power's Auto Insurance Claims Satisfaction Study every year. USAA also has a low complaint index from the National Association of Insurance Commissioners (NAIC), which means customers don't have many complaints about support or claims.

Cheapest car insurance by state

The cost of car insurance varies between states. One company may be expensive in Utah but inexpensive in New York. USAA is almost always the cheapest car insurance in every state, but its eligibility requirements make it restrictive. State Farm was the cheapest widely available and accessible insurer in most states.

In some states, a small, local company or affiliate could offer you the least expensive car insurance. For example, Farm Bureau has the cheapest insurance in Arkansas, Georgia, Kentucky, Louisiana and Nebraska.

Cheapest company
Monthly cost
AlabamaState Farm$46
AlaskaState Farm$30
ArizonaState Farm$54
ArkansasFarm Bureau$30
ColoradoState Farm$38
Show All Rows

Which drivers can get the cheapest car insurance quotes?

A variety of factors affect your car insurance quotes, including your location, age, driving history, vehicle, credit score and, perhaps most importantly, coverage.

Cheapest rates by age and coverage

Having more driving experience and not having any tickets or accidents helps make car insurance cheap. Drivers who opt for a minimum-coverage policy can get cheaper auto insurance premiums, though they risk not being fully covered after a major accident.

You should take two key steps to find the cheapest car insurance for you.

  1. Decide the right level of car insurance coverage
  2. Get quotes between multiple companies and take advantage of all available discounts.

Taking the first step — knowing how much car insurance you need — is important for finding the right cheap car insurance. You don't want to overpay for unnecessary coverage, but you do want to purchase enough coverage to fulfill legal requirements and to appropriately cover your risk. This also makes comparison shopping easier, since different insurers might recommend different coverage levels by default.

How much auto insurance you need comes down to your budget, your state's car insurance requirements and how coverage types work together.

How much to get
Bodily injury liabilityRequired in every state except FL, NH and VALimits close to your net worth
Property damage liabilityRequired in every state except NH and VALimits close to your net worth
Uninsured and underinsured motorist coverageRequired in 22 statesLimits close to your net worth if you don't have PIP and collision
Collision and comprehensiveRequired if you have a car loan or lease a carRecommended if your car is worth more than $5,000
Personal injury protection (PIP) or medical paymentsRequired in 14 statesRecommended if you don't have health insurance or you have high deductibles or copays

How much coverage you need will depend on your finances. For example, high-net-worth individuals should get liability limits similar to their net worth, which will probably exceed the state-required minimums.

How to get cheaper car insurance with discounts

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 cheap 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 discount: Discounts lifestyle elements that insurers reward with cheaper rates. These can range from incentives — such as a student getting savings for getting 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.
  • Safe car discount: If your car has safety features, such as anti-theft technology or automatic braking, 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 $384 per year. Extrapolated across the country as a whole, this means Americans are overpaying for car insurance by almost $41 billion per year.

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icon of insurance policy

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.

Frequently asked questions

Who has the cheapest car insurance?

Among national insurers, USAA has the cheapest rates, at $36 per month, with State Farm in second place, at $44 per month. The cheapest local company is Farm Bureau, at $39 per month.

What's the cheapest online car insurance?

Geico, Progressive, USAA and State Farm are some of the cheapest companies that let you get quotes and buy a policy online. It's often cheaper to buy car insurance online than it is to work with an agent, since you won't have to pay agent fees and you can often get a discount for buying online.

How can I save money on car insurance?

The best way to save on auto insurance is to compare quotes from multiple companies. Consider every factor that goes into your quote, such as your coverage amounts, deductibles and discounts. And don't just get quotes from big national companies — regional companies like Erie, Farm Bureau and Auto-Owners could have some of the cheapest rates if you live in a state they serve.

What's the cheapest type of car insurance?

State-minimum liability coverage is the cheapest type of car insurance. Liability-only insurance is $1,333 cheaper on average than a full-coverage policy. Switching to a liability-only policy could help you save if your car isn't worth much and you don't have a car loan or lease.

Is it a good idea to get the cheapest car insurance?

It depends on what you're giving up in exchange for the cheapest rate. If you raised your deductible or lowered your coverage, for example, consider how much extra you'd have to pay out of pocket after an expensive accident. Or, if you choose a company known for a slow claims process, consider how long you could afford to be without a car or pay for a rental car while you wait for the repair check in the mail.

What credit score do I need to get the cheapest car insurance?

Typically you can get the cheapest auto insurance rates if you have good to excellent credit, which means having a credit score of at least 700. But not every state allows car insurance companies to base your quotes on your credit-based insurance score.

When does car insurance get cheaper for young drivers?

Car insurance for young drivers costs up to three times more on average. Teen drivers can expect car insurance rates to go down with each year of driving experience, with significant drops when they turn 21 and 25.

Methodology: How we got our info

We collected quotes for thousands of ZIP codes in the U.S. for 37 insurance companies. Our sample driver was a single 30-year-old man who drives a 2015 Honda Civic EX and has a clean driving record. The only parameter that changed was the ZIP code where he lives in the U.S. These rates are for this specific driver profile — your results may vary. The amount of coverage we opted for gave our driver the state minimum required coverage, which varies by state but is typically:

Coverage type
Study limits
Bodily injury liability$20,000 per person/ $50,000 per accident
Property damage liability$25,000 per accident
Uninsured/ underinsured motorist BI$50,000 per person/ $100,000 per accident
Personal injury protectionMinimum 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.

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 and 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.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.