Affordable. Budget-friendly. Cost-effective. No matter which word you use, sometimes we simply need the best cheap auto insurance.
Today we are going to review the best cheap auto insurance companies. And even though we are labeling them as cheap, it doesn’t mean they skimp on what we need for quality coverage.
Before we get to it, what exactly are we looking for when we say we want the best cheap auto insurance policy? It's not to say we don't want the best car insurance. Instead, we want multiple discounts. Not just one or two here or there. We want numerous car insurance discounts available so we can get the most coverage for the budget. We researched the rates for average annual premiums, for drivers in their thirties, to get an idea of how these companies compare to one another, plus how many discounts the carriers offer.
Secondly, we want options. Sticking to a budget doesn’t mean we don’t want choices for our car insurance policy. We need to be able to customize our policy the way we want.
Finally, we want to know the company is financially stable and will be there should we need to file a claim. Oh, and make sure it has a reputation for good customer service too.
Based on these factors, let’s explore who makes up our list of the best cheap auto insurance companies.
What do a gecko, a slick app, and great customer service all have in common? Turns out it’s an auto insurance company that’s been around for over 75 years.
Geico has made it known it’s a discount auto insurance carrier, with the promise of “Fifteen minutes could save you 15% or more on car insurance.” One could argue discounts are in Geico’s blood, having started as the first direct-to-consumer auto insurance carrier.
Geico offers a ton of coverage options, in addition to the standard auto coverages you need, so you can customize your policy based on your budget. Optional coverages include emergency roadside assistance, car rental reimbursement, and a mechanical breakdown option (think of an extended car warranty). Not to mention a long list of discounts — 16 to be exact — to lower your premium as much as possible.
But having discounted rates doesn’t mean Geico’s technology is sub-par. You can submit your information online or through the app for instant access, or work with an agent. Geico’s website and app are known for being user-friendly, so you can get on with the repair process (and your life) after an accident —you can even file a claim right at your fingertips.
Geico has strong financial ratings, such as the AM Best A++ rating, AA+ S&P Global Rating. Customer service rankings are also strong — including the highest overall ranking in the J.D. Power 2020 U.S. Insurance Shopping Study and fourth overall for the J.D. Power 2019 U.S. Auto Claims Satisfaction Study.
Geico earns our top spot because of its number of discounts available, exceptional customer service ratings, and strong financial marks.
Amica Mutual has long been known as a reputable auto insurance company — but many might not realize the number of discounts available with them. Amica is America’s oldest mutual company at over 100 years old. Unlike other companies where the bottom line is the current stock price, Amica is owned by its policyholders. This means profits are returned to the members each year.
Although members typically pay higher insurance rates the first year, there are lots of ways to save with Amica with one (or more) of its 18 available discounts. For instance, you can save up to 25% by adding another vehicle or a homeowner’s insurance policy.
Amica has numerous ratings and awards under its belt. Ratings like the A+ Rating with AM Best, 5/5 J.D. Power Circle Rating, and the top spot for overall customer satisfaction for 7 years in a row, and consistently ranks above average for customer experience.
Amica offers all the basic auto coverage options you would expect, plus the availability of options through the Platinum Choice Auto® program. This program includes extras like rental car reimbursement, accident forgiveness, and full glass coverage. Amica earns one of the top spots for cheap auto insurance companies based on its financial reputation, available discounts, and great customer experiences.
For our veterans and military families, it’s hard to beat the plentiful number of discounts and options available through USAA.
USAA has a reputation for providing exceptional and competitive rates for its members. In addition to the standard fare of auto coverage options, including roadside assistance and total loss protection. There are at least 12 discounts available to members, from safe drivers to the length of military service.
Although not officially ranked with the 2019 JD Power U.S. Auto Claims Satisfaction survey, USAA scored the highest with 900 out of 1000 points possible. It also enjoys many favorable reviews from customers online. In addition to great customer service, USAA shows its financial strength with an A++ AM Best Rating and AA+ S&P Global Index Rating.
The only reason USAA is ranked lower among cheap insurance companies is because of the strict requirements for membership. Unless you’re part of the military family in some way, you won’t have access to the competitive rates and discounts, and fantastic customer service the members enjoy.
Progressive might be well-known for their witty commercials, but behind the comedy act is auto insurance with serious ways to save on your policy. Progressive is also renowned for providing multiple discounts to make a big dent in your premiums.
Progressive provides all the standard auto insurance coverages you’re required to carry. But there are plenty of options available such as roadside assistance, loan/lease payoff, car rental reimbursement — even coverage on your custom, after-market equipment.
Along with the numerous coverage options, you have plenty of discounts to lower your premiums. Whether you have a multi-car, multi-line policy or take advantage of the Snapshot: Safe driver discount program. Progressive has the Name Your Price® Tool, which helps you customize your auto policy to fit your current budget.
Progressive has a set of strong financial ratings such as an A+ AM Best and AA S&P Global Index Rating. Progressive gets dinged a little in the 2019 JD Power U.S. Auto Claims Satisfaction survey, where it ranks below the industry average. Overall, the coverage options and a multitude of discounts mean, on average, people save up to $750 per year by switching to Progressive.
If you’re looking for a good neighbor, who also happens to be frugal, then State Farm may be your answer. Though it’s the largest auto insurance provider in the U.S., the premiums can be small enough for even the tiniest budgets.
State Farm offers the standard coverage for each state, but an impressive list of coverage options too. You have the option of adding roadside assistance, car rental reimbursement, and rideshare driver coverage. You also have the option of specialty coverages, such as teen drivers or classic cars.
State Farm’s overall customer satisfaction comes in about average among the auto industry ratings, but its Superior (A++) financial rating from A.M. Best makes it worth adding to your list.
The Hartford insurance may not be as well-known with unlimited commercials and fetching musical lyrics, but since 1984 it has offered discounted coverage rates for retirees. If you’re over 50 and a member of AARP, then you owe it to yourself to review all the benefits The Hartford boasts — like discounts and fantastic customer service.
In addition to the standard auto coverages, The Hartford offers useful options such as new car replacement, lifetime car repair assurance, even Recovercare assistance if you’ve had an accident. There are several ways to save further on your premiums with programs such as a disappearing deductible and multi-policy discounts.
The Hartford relies on a network of local agents, which are easily accessible through the website or customer service. But The Hartford takes advantage of awesome technology, too. They have a great app, with convenience features like making payments, summoning roadside assistance, or reporting a claim.
The Hartford has a superior A+ financial rating, highlighting the strength of the company. Customer service marks are high too, with an above industry average ranking in the 2019 JD Power U.S. Auto Claims Satisfaction survey.
Read our review of The Hartford.
Erie Insurance gets high marks as a regional discount auto insurance provider, servicing states from Ohio to North Carolina — and offering tons of discounts along the way. Erie consistently ranks high in overall customer satisfaction and important financial ratings. Erie has a vast network of over 13,000 agents, plus 24/7 customer service ready to help you with your policy needs.
Erie offers the standard auto insurance coverages, but its policies include several standard features other competitors charge extra for. Features such as First Accident Forgiveness, diminishing deductible, and a rate lock are a few of the benefits.
Erie has a wide range of additional options for your policy, which makes them perfect for those looking to customize their policy. Extras such as pet coverage (up to $500 if your pet is with you in an accident) and rideshare coverage are a couple of the unique options available.
Erie Insurance ranks high in the 2019 JD Power U.S. Auto Claims Satisfaction survey, at third overall. The National Association of Insurance Commissioners (NAIC) customer complaint index shows a rating well-below average, with a rating of .22. Erie also has an impressive A+ Superior rating with AM Best to back up its claim of financial strength.
It’s important to note, you can only purchase Erie insurance if you live in one of the following states: Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin, and Washington D.C. — which is why Erie isn’t ranked higher on our list.
You can’t reference cheap car insurance without mentioning Farm Bureau. Farm Bureau consistently offers some of the lowest premiums you can purchase — without sacrificing quality coverage. And by the way, you don’t have to be a farmer to access these rates either.
You do, however, have to pay an annual fee, usually in the $20-$90 range which depends on where you live. Farm Bureau is available in all states and D.C. Each Farm Bureau office is individually operated, which means you’ll get a quote through your state’s Farm Bureau office.
Farm Bureau offers a few discounts on their low-priced premiums. Discounts available include multi-policy and multi-car, to a good student and good driver rates. A full list of discounts and coverage options is only available through your state’s FB office.
Farm Bureau performs well in several regions, including the Southeast and Texas, in the 2019 JD Power U.S. Auto Insurance Study. Farm Bureau also has an A rating (excellent) with A.M. Best and a stable financial outlook.
Nationwide is a well-known auto insurance carrier, offering lots of ways to save through its programs and bundling opportunities. Where Nationwide sets itself apart is with the variety of specialized coverage options and programs available so you can customize your policy.
Nationwide has specialty options such as gap coverage, roadside assistance, total loss deductible waiver, and accident forgiveness.
Nationwide is available in almost every state and offers 12 discounts to lower your premiums. Plus Nationwide offers the On Your Side® Review to ensure you’re getting the most discounts and best coverage possible.
Nationwide ranks slightly below the industry average for the 2019 JD Power U.S. Auto Claims Satisfaction survey but maintains a Superior financial rating (A+) with A.M. Best. With 24/7 customer service, website, local agents, and app, you’ll have access to Nationwide when you need them the most.
American Family Insurance is available in 19 states, but it’s worth adding to your list if you live in one of the covered areas. The company offers a wide range of coverage options, including ones not offered with other big-name companies, such as gap coverage. You can customize your policy with a variety of custom coverage levels, all while still keeping your discounts.
The American Family site claims the average person can save up to 29% by taking advantage of the discounts. Examples of the available discounts range from safe driving and good student to multi-policy and multi-product. There’s even a discount for those who spend time volunteering.
Where American Family Insurance has room for improvement is its customer service rankings. The 2019 JD Power U.S. Auto Claims Satisfaction survey finds the company to be well below industry average. But with the number of discounts available, you’re likely to find the right policy for your budget and still meet your customer service expectations.
Financially speaking, American Family is strong, with an A rating from A.M.Best. Overall, the combination of discounts, options, and strong financials make American Family a great choice for auto insurance.
Other cheap car insurance companies to consider
In addition to the 10 best cheap auto insurance companies mentioned above, there are a few more auto insurance companies to consider.
Root is a newcomer to the auto insurance scene, but it’s worth mentioning because of the premise behind the company. Root uses technology to keep your auto insurance rates down since it is an app-based auto carrier. This is perfect for budget-friendly shoppers because it means you’re not paying for as much employee overhead and commissions.
Root is a bit of a wild card because it is so new in the industry. It doesn’t have any financial ratings or customer satisfaction ratings to establish its strength. It is also currently only available in 30 states for coverage but adding states regularly.
Root uses the app and GPS to follow your driving for 2-3 weeks. Then, based on your driving habits, Root recommends a low-cost policy. You’re encouraged to perform all tasks through the app (to help keep costs down) but there is a customer service line available. Root only insures good drivers, which also helps keep costs down.
Although still very early, Root has a 4.7 out of 5 ratings in the App store, based on over 45,000 ratings, and 3.9 out of 5 for thousands of Google reviews. If you are a good driver, comfortable with app-based technology, then you could potentially save hundreds of dollars each year through Root Insurance.
Founded in 1912, Liberty Mutual is no stranger to providing comprehensive insurance policies. Whether it’s homeowner’s, renter’s, or auto insurance, Liberty Mutual can save you money by bundling your insurance policies and through various other discounts.
Liberty Mutual offers basic auto coverage but has a wide range of options to further customize your policy. Options such as collision, Liberty Mutual Deductible Fund® where your deductible reduces over time, gap coverage, and roadside assistance.
Liberty Mutual offers several discounts — among the most of any auto insurance carrier. For starters, if you go online to obtain your quote, you automatically receive a 12% discount. Other discounts include bundling policies, paperless statements, good grades, safe driving, and many others.
Liberty Mutual receives an A rating from A.M. Best for its strong financial outlook. Where Liberty Mutual struggles with performance is overall customer satisfaction. In 2019, customer’s ranked them eight spots below the industry average.
Allstate came in with the highest premiums on our list, but it’s worth mentioning that Allstate will insure drivers often considered high-risk.
Allstate features coverage options you don’t always find with other big-name companies. Specialty coverage such as classic cars, rideshare insurance, and even custom sound equipment coverage. Allstate has an impressive list of discounts, so you might be able to get the premium to work for your budget. Not to mention the accident forgiveness and Deductible Rewards® to further help with premiums.
Allstate struggles with the overall customer satisfaction ratings too, scoring well below the industry average for the 2019 J.D. Power rankings. Allstate does have a strong, stable outlook with an A+ A.M. Best rating.
*average annual car insurance premiums based on drivers in their thirties
Finding cheap car insurance rates
Our list may provide a background of all of the big players in auto insurance but to truly find the cheapest means obtaining quotes. Rather than contacting each company directly, you can find online comparison companies providing auto insurance quotes.
Companies, such as Gabi and CarInsurance.net, are not insurance companies nor do they have insurance agents. Instead, the online tools they provide can give you a side-by-side look at various auto insurers and see which one offers you the cheapest car insurance based on soft quotes. Once you decide on a company you want to purchase from, you'll be connected to an agent.
You don't pay fees for using these tools. Instead, the insurance companies pay them for getting their quotes to you. You'll be getting free car insurance quotes from all of the insurance companies, even ones you may not have thought of.
There are several ways to save on your car insurance. In the short term, you can get quotes and compare prices for multiple companies. You can also raise your deductible, which lowers your premiums. In the long run, safe driving and improving your credit score, and driving a newer vehicle can all improve the amount you pay for premiums. You can also find discounts by bundling your auto insurance with your home insurance, rental insurance, and perhaps life insurance. There are also student driver discounts that can help younger drivers.
What affects my rates?
Your driving history plays heavily into your auto insurance rates. If your driving record shows a history of speeding tickets, accidents (especially your fault accidents), and DUI, you'll pay a higher premium. A clean driving record will get you the lowest rates.
What if I have bad credit?
Having bad credit will likely make your auto insurance premium higher. However, it’s not impossible to purchase a policy, even with less-than-ideal credit scores. Be aware, when you are finalizing a policy, the insurance company will conduct a soft pull on your credit report and will finalize your premium based on what is reported back.
What states are most expensive for car insurance?
You may be surprised to know the average cost of auto insurance varies widely depending on your location. According to the Insurance Information Institute (iii), Louisiana residents pay the highest in premiums in the country, with an average of $1,443 per year. Rounding out the Top 5 most expensive states are Michigan, Florida, New York, and New Jersey.
Do I really need the extra coverage the insurance agent told me to purchase?
Each state has minimum auto insurance coverage requirements, so it’s important to review what is required so you have adequate coverage. Many features such as rideshare coverage, roadside assistance, gap insurance, and many others, are optional but will increase your premium. Ultimately, you have to balance what is best for your budget. You'll want personal injury protection, bodily injury coverage, liability insurance, property damage, and uninsured motorists.
How can I be sure I’m getting the best deal?
Using an insurance broker or a service like Gabi to get multiple quotes is best. Getting several quotes means you can conduct your own head-to-head comparison to decide what fits your budget and lifestyle.
The bottom line
Overall, we think Geico deserves the number one spot for the best cheap car insurance companies — and it’s not because they have an adorable gecko for a mascot. Geico has the financial and customer satisfaction ratings we are looking for in a reputable company, all while offering us multiple options and discounts.
As you can see, watching your spending doesn’t mean you have to sacrifice quality auto insurance coverage. You may not be able to get all the bells and whistles, but you can rest assured knowing you can find affordable policies that work for your budget.
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