Who Has the Best Cheap Car Insurance?

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

Currently insured?
{"id":3,"isAgeFieldVisible":true,"isInsuranceTypeFieldVisible":true,"isInsuredStatusFieldVisible":true,"buttonText":"Find Insurers","customEventLabel":"","defaultZip":"","defaultProduct":"auto","quoteWizardEndpoint":"https:\/\/quotes.valuepenguin.com","trackingKey":"_best-cheap-car-insurance","title":"Find Cheap Auto Insurance Quotes in Your Area","vendor":"vp"}

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.

Graph shows the five cheapest car insurance companies in the United States
Graph shows the five cheapest car insurance companies in the United States

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.

Rank

CompanyAnnual Rate
1Erie$1,521
2State Farm$1,737
3Farm Bureau Mutual (IA Group)$1,781
4American Family$2,041
5Auto-Owners Insurance$2,112
6GEICO$2,158
7Nationwide$2,293
8Progressive$2,393
9Metropolitan$2,447
10Travelers$3,017
11Allstate$3,545
12Farmers$4,280
NA*USAA$1,307

* USAA only provides insurance coverage to current and former military members as well as their families, and was therefore excluded from our overall rankings.

The three cheapest car insurance companies

  • Erie

    Erie is the 12th largest insurer in the U.S., even though it's only available in 12 states and Washington, D.C. Overall, it was frequently the cheapest insurer for drivers in its market, beating state averages by 19%. In Pennsylvania, drivers who choose Erie could save 32% compared to the state mean.

  • State Farm

    State Farm is the largest auto insurance company in the country, providing policies nationwide and rates that beat the average in 46 states and D.C. Additionally, this company boasts an enormous network of local agents, meaning there is likely a State Farm agent who can help you with a policy in your city.

  • Farm Bureau Mutual

    Offering coverage to eight states, mostly in the Midwest and West regions, Farm Bureau Mutual's rates regularly beat out those offered by larger insurers. In Utah, this insurer's rate for our profile driver was 36% cheaper than the state average and nearly half the price of Allstate's.

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.

Company30-year-old driver: Clean record30-year-old driver: Accident history30-year-old: Minimum coverage policy18-year-old driver
USAA$1,307$1,766$430$3,254
Erie$1,521$1,924$451$3,614
State Farm$1,737$2,075$712$5,119
Farm Bureau Mutual (IA Group)$1,781$2,675$436$3,580
American Family$2,041$2,962$812$6,831

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.

statecheapest insurer
AlabamaNationwide
AlaskaGEICO
ArizonaGEICO
ArkansasState Farm
CaliforniaGEICO
ColoradoState Farm
ConnecticutState Farm
DelawareGEICO
FloridaState Farm
GeorgiaGeorgia Farm Bureau
HawaiiIsland Insurance
IdahoState Farm
IllinoisState Farm
IndianaErie
IowaIMT Insurance
KansasState Farm
KentuckyState Farm
LouisianaState Farm
MaineGEICO
MarylandErie
MassachusettsSafety Insurance
MichiganAuto-Owners
MinnesotaState Farm
MississippiState Farm
MissouriState Farm
MontanaState Farm
NebraskaNebraska Farm Bureau
NevadaState Farm
New HampshireGEICO
New JerseyState Farm
New MexicoState Farm
New YorkGEICO
North CarolinaGEICO
North DakotaGrinnell Mutual
OhioGEICO
OklahomaState Farm
OregonCountry Financial
PennsylvaniaErie
Rhode IslandProgressive
South CarolinaAuto-Owners
South DakotaAmerican Family
TennesseeState Farm
TexasState Farm
UtahFarm Bureau Mutual
VermontState Farm
VirginiaVirginia Farm Bureau
WashingtonMutual of Enumclaw
Washington D.C.Erie
West VirginiaWestfield
WisconsinState Farm
WyomingState Farm

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.

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

RankCompanyAnnual premium
1Erie$1,521
2State Farm$1,737
3Farm Bureau Mutual (IA Group)$1,781
4American Family$2,041
5Auto-Owners Insurance Co$2,112
6GEICO$2,158
7Nationwide$2,293
8Progressive$2,393
9Metropolitan$2,447
10Travelers$3,017 1
11Allstate$3,545
12Farmers$4,280
N/AUSAA$1,307

Cheapest companies for a minimum coverage policy

RankCompanyAnnual premium
1Farm Bureau Mutual (IA Group)$436
2Erie$451
3Auto-Owners Insurance Co$649
4State Farm$712
5American Family$811
6GEICO$819
7Progressive$924
8Metropolitan$971
9Nationwide$1,004
10Allstate$1,390
11Travelers$1,412
12Farmers$1,469
N/AUSAA$430

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

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

RankInsurance companyStarting rateAfter-accident ratePercentage change
1State Farm$1,737$2,07519%
2Erie$1,521$1,92426%
3Travelers$3,017$3,85828%
4Auto-Owners Insurance Co$2,112$2,74230%
5USAA$1,307$1,76635%
6Nationwide$2,293$3,13237%
7Farmers$4,280$6,02241%
8American Family$2,041$2,96245%
9GEICO$2,158$3,14046%
10Farm Bureau Mutual (IA Group)$1,781$2,67550%
11Allstate$3,545$5,36051%
12Progressive$2,393$3,81359%
13Metropolitan$2,447$3,95962%
USAA rates are included here but are excluded from recommendations due to its eligibility requirements.

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.

InsurerAverage annual rate
USAA$1,307
Erie$1,521
All insurers$2,399

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).

CompanyRates with excellent creditRates with poor credit% difference
Metropolitan$980$1,10813%
Nationwide$755$1,00433%
USAA$324$43233%
Farm Bureau Mutual$320$43636%
Erie$325$45139%
Travelers$967$1,48654%
Progressive$582$93861%
GEICO$520$84262%
American Family$496$81164%
Allstate$843$1,42269%
Auto-Owners Insurance Co$347$64987%
State Farm$375$71691%
Farmers$692$1,509118%
Rates are for our designated sample driver shopping for a minimum coverage policy.

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.

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, 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 coverageDo you need it?How much coverage do we recommend?
Bodily injury liabilityRequired in every state except FloridaPer accident limits approximating your net worth
Property damage liabilityRequired in every statePer accident limits approximating your net worth
Uninsured/underinsured motorist coverageOnly required in 22 statesPer accident limits approximating your net worth if you don't have both personal injury protection and collision insurance
Collision and comprehensiveIf you lease a car or finance your purchase, your lender may require it. Otherwise, it's not required by state lawAs a rule of thumb, recommended only if your car is worth more than $2,000
Personal injury protection (PIP) or medical payments coverageOnly required in 14 statesIf 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.

QueryGen ZMillennialsGen XBoomersSilent Generation
Happiness with their current provider would keep them from comparing auto insurance quotes51%59%67%69%70%
Would spend an hour each year comparing quotes to save $10070%70%62%46%52%
Feels loyalty to their insurance provider79%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 typeStudy 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 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.

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.

Comments and Questions

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.