The Cheapest Car Insurance Companies (January 2022)

The Cheapest Car Insurance Companies (January 2022)

If you don't shop around for your car insurance, you could be missing out on savings worth hundreds of dollars per year.

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Did you know the exact same driver could be charged $39 per month by one insurance company and $255 per month by another? Our car insurance analysis — based on millions of quotes collected across the country — backs that up.

Beyond the data, the best advice we can give drivers looking for their best car insurance rates is to shop around. No single insurer will have the cheapest rate for every driver, but our research can give you a good foundation to start your search.

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What is the cheapest car insurance company?

Our analysis found that USAA and State Farm are the most affordable major insurers in the country. USAA costs an average of $432 per year, 40% below the national average. State Farm costs $532 per year, 26% below the national average.

Although USAA is the cheapest option among major insurers, only active military members, veterans or their families can qualify for a policy.

Among insurers that have a smaller national footprint, Farm Bureau Insurance, at $472 per year, and Auto-Owners, at $484 per year, rank as the cheapest.

Smaller 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.

The graph shows the ten cheapest car insurance companies in the United States

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The 3 cheapest major car insurance companies

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A minimum-coverage auto insurance policy with State Farm costs $532 per year. State Farm is the largest auto insurance company in the country, with the cheapest widely-available rates 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.

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A minimum-coverage policy with Geico costs $667 per year. Geico is the second-largest auto insurance company in the country and operates in all 50 states and D.C. Geico also has one of the auto insurance market's best quote tools, so it's easy to get an instant rate online and comparison shop.

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Minimum-coverage auto insurance costs $432 per year, on average, which is the lowest rate by far. Like Geico, USAA operates in all 50 states and D.C. USAA offers some of the cheapest rates in the country, 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 customers as other big names like Progressive and Allstate.

Compare the average annual rates for 13 of the biggest auto insurers in the country based on online quotes for a 30-year-old driver.

Annual Rate
Monthly Rate
Farm Bureau$472$39
State Farm$532$44
Show All Rows

How we determined the cheapest insurers: We collected quotes from 37 insurance companies across thousands of ZIP codes in every state.

Quotes were for a sample driver and policy as described in our methodology.

How rates with the cheapest insurers might change depending on your driver profile

A variety of factors affect your car insurance rates, including your location, age, driving history, vehicle, financial profile and, perhaps most importantly, coverage.

cheapest rates for a 30-year-old driver vs a 18-year-old driver

Young drivers and those with an accident history typically pay much more than older drivers and those who have a clean record. Those who opt for a minimum-coverage policy can get considerable savings on their premiums, though they risk not being fully covered in the event of a major accident.

All rates are for an annual policy with full coverage, rather than minimum coverage, unless noted otherwise.

The cheapest insurers by state

The price of car insurance varies 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 and accessible insurer, meaning it's available in more than 40 states and there are no eligibility requirements.

USAA was often the cheapest company in any given state, but its eligibility requirements make it restrictive. If you are eligible, you should get a quote from USAA, as it's available across the country.

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

Cheapest company
AlabamaState Farm
AlaskaState Farm
ArizonaState Farm
ArkansasFarm Bureau
ColoradoState Farm
ConnecticutState Farm
DelawareState Farm
GeorgiaFarm Bureau
Show All Rows

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.

Shoppers looking for not just the cheapest companies but also the best balance of affordability, strong customer service and features can compare the best auto insurance companies.

Cheapest car insurance company overall: State Farm

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Given that USAA has eligibility restrictions, and Farm Bureau and Auto-Owners are disproportionately expensive when you add more coverage types, we rate State Farm as the cheapest insurance company. It has the cheapest widely available rates between full and minimum coverage, and the company offers a wide range of options and other types of insurance.

Whether you're looking for a car insurance policy that only meets your state requirements or a more extensive full-coverage policy, State Farm is one of the most affordable non-USAA options.

Cheapest companies for a minimum-coverage policy

Cheapest companies for a full-coverage policy

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

Cheapest companies for a minimum-coverage policy

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

Cheapest companies for a full-coverage policy

Monthly rate
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.

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 lower rates. They can also qualify for a range of discounts, including an accident-free discount, multi-car discount and anti-theft discount.

Cheapest auto insurance company after a DUI: Erie

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We found Erie has the lowest car insurance rates after a driver is convicted of DUI. Erie's average rates after a DUI are $2,257 per year, an increase of 64%. On average, insurers double rates after a DUI.

How insurance rates increase after a DUI

Clean record
Rate hike
Farm Bureau$1,576$2,81378%
American Family$1,755$2,83261%
Show All Rows

Rates are for a 12-month full-coverage policy, which includes comprehensive and collision insurance, plus state-mandated liability insurance.

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.

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, and savings for young and senior drivers.

The biggest downside to Erie is that it is only available in the following areas:

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

Cheapest car insurance for low-mileage drivers: Metromile

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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 choice for you.

Metromile was one of the first companies in the U.S. to determine premiums largely based on mileage. How much driving is too much when shopping with Metromile? Generally, for Metromile to be a good deal, drivers should drive fewer than 7,500 miles per year.

The biggest downside to Metromile is that it's 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

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Overall, Farm Bureau is the cheapest auto insurance company for drivers with poor credit, averaging $1,278 per year.

Farm Bureau's average rate is $32 per year cheaper than the next closest widely available competitor, Geico. The company's rates are 12% cheaper than average.

Poor credit
Very good credit
Rate hike
Farm Bureau$1,278$69983%
American Family$1,354$74183%
Show All Rows

Rates are for our designated sample driver shopping for a full-coverage policy.

On average, our sample insurers charged rates 99% higher if a driver had poor credit instead of excellent credit, so improving your credit score is a great way to get big savings on your insurance policy.

Cheapest car insurance company for military members: USAA

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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 State Farm, is the cheapest insurer in the country on average.

In fact, USAA is the cheapest company by quite a wide margin. While the average cost of minimum coverage only beats Farm Bureau by $40 for an annual policy, Farm Bureau policies often require membership dues, which can range from $20 to $50 annually.

Average annual rate
Farm Bureau$472
Average of all insurers$717

USAA stands out for more than just its affordability: It also has one of the best customer service reputations in the industry. The company has the top spot in the J.D. Power's Auto Insurance Claims Satisfaction Survey and it also has a low Complaint Index from the National Association of Insurance Commissioners.

For more information, read about USAA's insurance offerings.

Broadly speaking, you should take two key steps to find the cheapest car insurance for you.

  1. Ensure you're shopping for the appropriate level of car insurance coverage.
  2. Shop for quotes between multiple insurers, including our top recommendations. When shopping, 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. 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. You'll also 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.

How much to get
Bodily injury liabilityRequired in every state except Florida, New Hampshire and VirginiaPer accident limits close to your net worth
Property damage liabilityRequired in every state except New Hampshire and VirginiaPer accident limits close to your net worth
Uninsured and underinsured motorist coverageRequired in 22 statesPer accident limits 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 $3,000
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 economic situation. 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 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 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 $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 insurers are Auto-Owners, at $40 per month, and 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. Make sure you 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 American Family 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 be a good option to help you save if your car isn’t worth much and you own it outright.

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 maximums, 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.

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 a bit more than what is required of state minimums:

Coverage type
Study limits
Bodily injury liability$50,000 per person/$100,000 per accident
Property damage liability$25,000 per accident
Uninsured/underinsured motorist BI$50,000 per person/$100,000 per accident
Comprehensive and collision$500 deductible
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.