Cheapest Car Insurance Companies (June 2024)

Going into the insurance buying process without knowing what coverage you need makes it easy to overpay. It’s required to have both collision and comprehensive coverage if you have an outstanding loan, but even so, the question of how much liability car insurance to get still remains. While the decision is ultimately based on your tolerance for risk, it mostly comes down to these considerations:

• Location: If you’re in a densely populated area with a lot of traffic, consider getting collision coverage and a higher liability limit so you’re financially protected in the event of an accident.
• Driving habits: The more you drive and the more trips you take, the higher your chances are of being in an accident.
• Your financial situation: If you can afford to pay out-of-pocket for possible damages to your vehicle, you’ll likely only need liability coverage.
• Your vehicle: If you have a vehicle over 10 years old, you’ll likely not need full-coverage car insurance due to the low value of the vehicle.

Read more: How Much Car Insurance Do You Need?

According to the Bureau of Labor Statistics’ (BLS) consumer price index (CPI), the total cost for motor vehicle insurance has increased by 42.8% since 2020. To keep a low rate, we recommend comparing your policy to new options when renewal is coming up and when you have major life changes (like marriage) to avoid these rising costs as much as possible.

Read more: What To Do About Rising Insurance Rates

It can be tempting to go with the first option that seems like a good deal, but comparing multiple options can get you the lowest price. There are three options for getting quotes: talking to insurance agents one-on-one, using an independent insurance agency to compare quotes or getting pricing online.

One of our team members, Connor Bolton, was in the market for new car insurance coverage after moving to South Carolina. He tested out each of these methods in his search and came to the following conclusion.

“I would recommend comparing online and through brokers since it is easier to find the best and cheapest option. If you are going to talk to any agents, research online about coverage, insurance prices and any discounts you may qualify for, and write down questions before speaking to anyone.”

Learn more about our first-hand experience. 

Read more: How To Shop for Car Insurance

Depending on the state you live in, your credit score could be an influential factor in determining your car insurance rates. In states that allow credit to be considered in determining premiums, a bad credit score can increase pricing by 96% based on our cost analysis. Taking measures such as paying debts on time, keeping the balances on credit cards low and making sure to keep your oldest account can all help improve your credit score and get you lower rates over time.

Read more: How To Improve Your Credit Score

There are many common car insurance discount options available with most major companies that may help you save:

• Bundling: You can save a large sum on car insurance when bundling policies, and you’ll get the biggest discounts with a home and auto insurance bundle with average savings of $650 per year.
• Multi-Car: With a multi-car insurance policy, you can save up to 25% on premiums.
• Telematics Programs: With either a plug-in device or app that tracks your speed, braking and other factors, you can save up to 40% on your car insurance for good driving habits. Keep in mind that some telematics programs penalize bad habits with higher rates.
• Defensive Driving Course: Taking a defensive driving course or passing a program can save you a minimum of 5% of your policy and as much as 10%.

If your vehicle is older and you’re in the market for getting a new car, you should consider getting a vehicle that gets you lower insurance rates. For cheap rates, we recommend avoiding luxury vehicles and electric cars due to their high price tag and sticking to base models of affordable car brands. 

Read more: Cheapest Cars to Insure and Most Expensive Cars to Insure

While minimum coverage may seem like a good deal, it can be risky to go without higher coverage limits if you can’t afford accident costs, especially if you drive a lot. Even if you can pay for out-of-pocket expenses, if your car gets totaled, your limits won’t cover another driver in an accident, and they may sue. If this is the case, you would be on the line for expenses for injuries, a lawyer — and if you lose your case — a settlement.

Not all companies handle claims or inform you about your policy in the same manner. Cheaper providers may lack the customer support and experience you get from more well-established companies that may cost a little more.

Who offers strong customer service: Allstate earned a high rating in our 2024 auto insurance customer sentiment analysis. This reflects strong customer reviews across a variety of platforms and review scores from J.D. Power.

Some car insurance companies tend to take longer to process a claim than others. While your claim is being processed, you may be without a vehicle, which can be a major headache. Waiting longer for a company that processes claims slowly could cause more issues than the savings are worth.

Who you can trust to handle claims: Erie Insurance claimed the second highest score of providers offering cheap car insurance in the J.D. Power 2023 U.S. Auto Claims Satisfaction Study™. This score indicates that Erie customers were happier with their claims process than those of other providers.

Larger companies offer mobile apps and online services that can make the entire insurance experience more convenient. Budget providers may lack some of these tools.

Who offers useful resources: State Farm has consistently high ratings for its apps and online services. These ratings suggest that State Farm customers are satisfied with its resources and tools.

Smaller companies with the lowest rates don’t always offer add-ons like roadside assistance and rental car reimbursement. Sticking with a larger company may cost a little more, but you’ll have more choices available to get you the coverage you want and need.

Who offers great add-on options: Travelers has the largest array of add-on coverages among national insurers and some of the lowest rates based on our cost research.

Overall, USAA is the cheapest car insurance company with average rates of $471 per year for minimum coverage and $1,741 per year for full coverage. However, if you’re not a military member or family member, Country Financial is the lowest rate option regionally. If you’re not in Country Financial’s service area, Travelers will most likely be your cheapest national option.

Minimum coverage policies, which only satisfy your state’s minimum insurance requirements, are the cheapest type of car insurance. However, these policies can put you at significantly more financial risk in the event of an accident than full-coverage or higher liability limits.

Those who are 55 years old tend to pay the lowest rates — no matter what driver profile they have — at an average rate of $804 per year for minimum coverage and $2,375 per year for full coverage.

Geico tends to be cheaper for most drivers than Progressive, based on our research. However, Progressive tends to have favorable rates for some drivers in some areas — namely drivers in high-risk categories like those with recent DUIs, accidents, tickets or poor credit (depending on the state you live in).

State Farm is the largest auto insurance company in the U.S. according to the National Association of Insurance Commissioners (NAIC). The company accounts for 18.31% of the total auto insurance market.