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Which Car Insurance Company Has the Cheapest Rates?

by Agnieszka Fratczak,  Oct 28 2020

Compare car insurance quotes in minutes to find the cheapest rate!

Finding the cheapest car insurance is not always easy, especially after an accident, ticket, or DUI. But what premium price is considered cheap? The average cost for full coverage car insurance in the United States is $1,416 per year, which works out to about $118 per month, according to U.S. News & World Report. 

If you think you are paying too much or are wondering if you could pay less, check out these nine auto insurance companies with the cheapest rates. By switching companies, you may be able to gain significant savings. Plus, learn how to get the best rates from any provider! 

9 cheapest car insurance providers 

Finding the best cheap car insurance means striking a balance between good coverage, high-quality service, and a competitive premium. To save you time researching, here are the top nine cheapest car insurance companies and how they stack up. 

Methodology: To get the study rates shown here, Quadrant Information Services worked with U.S. News & World Report. They analyzed a report of insurance rates from the nine largest national car insurance companies in all 50 states. The results are based on profiles for both male and female drivers ages 25, 35, and 60 who drive between 6,000 and 12,000 miles annually. The vehicles used for each comparison include the 2015 Toyota RAV4, 2015 Ford F-150, and the 2015 Honda Civic. For car insurance coverage, three levels were used, along with three credit history tiers. Please note that the car insurance rate you receive is based on individual factors and may differ from the rates shown.

1.    USAA

–     $885

–     Known for friendly customer service and the cheapest auto insurer of the nine major auto insurance companies on this list. 

–     Disclaimer: It’s important to note that USAA is not available to the general public as it is intended for current and former military members and their families.

2.    Geico

–     $1,168

–     Available in all 50 states and the District of Columbia and comes in second place for value and customer service behind USAA. Also, recommended for those with less-than-perfect credit.

3.    State Farm

–     $1,234

–     Offers the cheapest coverage on our list for drivers with a DUI and the second cheapest for drivers with an accident. 

4.    Travelers

–     $1,267

–     Offers affordable coverage and made all three of the top 5 cheapest insurance lists for drivers with bad credit, a DUI, and an accident. 

5.    Progressive

–     $1,373

–     Offers helpful discount programs and savings bundles for drivers. It also made the top 5 cheapest insurance lists for drivers with a DUI and bad credit. 

6.    American Family

–     $1,391

–     While sixth overall, American Family ranked in the top 5 cheapest providers for drivers with a DUI, a speeding ticket, and bad credit. 

7.    Farmers

–     $1,682

–     Farmers is a long-standing reputable company but it falls to the back of the pack when it comes to premium prices. 

8.    Nationwide

–     $1,864

–     Nationwide is also well-known but isn’t likely to be the cheapest choice. 

9.    Allstate

–     $1,880

–     Allstate comes in last in terms of the cheapest car insurance rates and didn’t make any of the top 5 lists for drivers with a ticket, DUI, or lower credit score. 

* All rates and annual averages in this article are subject to change and are based on several different factors.

When comparing the cheapest auto insurance companies, you’ll want to keep the benefits, customer service quality, and average rates in mind to get the overall best value.

Find the cheapest car insurance rates with Gabi!

Cheapest car insurance after an accident 

After having an accident, car insurance premiums have been shown to increase by about $600 per year. Looking to minimize that impact? Here are the top five cheapest car insurance companies for drivers with one accident on their records and their average yearly costs.

1.    USAA

–     $1,229

2.    State Farm

–     $1,487

3.    American Family

–     $1,684

4.    Geico

–     $1,802

5.    Travelers

–     $1,842

If you were in an accident and have a military affiliation, USAA is the best option for cheap car insurance. However, for those who aren’t military-affiliated, State Farm is your best bet. 

Cheapest car insurance after a DUI 

We hate to be the bearer of bad news but having a DUI on your driving record is one of the worst things you can do if you want cheap auto insurance premiums. But if it happens, here are the five insurance providers with the cheapest rates post-DUI.  

1.    State Farm

–     $1,681

2.    USAA

–     $1,683

3.    American Family

–     $1,726

4.    Progressive

–     $1,793

5.    Travelers

–     $2,430

State Farm and USAA once again lead the way in this circumstance for the best rates. 

Cheapest car insurance with bad credit 

Credit scores help to show the level of risk that an individual presents so insurance companies typically check them when assessing a driver’s premium cost. However, if you have bad credit, you can still find affordable rates from these providers. 

1.    USAA

–     $1,653

2.    Geico

–     $1,855

3.    Travelers

–     $2,095

4.    American Family

–     $2,277

5.    Progressive

–     $2,308

As your credit improves, you will likely qualify for cheaper rates!

How to reduce your car insurance premium 

There are many ways to get cheap insurance while also having the coverage you need on the road. Here are the top ways to reduce your auto premiums and find the best cheap car insurance.

Comparison shop 

Figuring out who has the cheapest auto insurance typically means doing some comparison shopping. Insurance costs vary from company to company as does the coverage they provide. To compare effectively, aim to get quotes from at least three or four different providers. You can call companies directly, or you can get a quote instantly by using an online comparison tool like Gabi to compare rates.

In addition to getting a quote, ask your friends, family, or colleagues for their recommendations. Obviously, you want to get the most coverage for the least amount of money, but you also want to work with a company that has great customer service and a solid financial history. 

Discounts 

Different car insurance companies offer discounts for a variety of reasons. Below is a list of the most common car insurance discounts and how you can qualify for each of them.  

•      Organization: Affiliating with a specific organization could mean big savings. Many car insurance providers offer discounts to alumni of specific universities, members of clubs, firefighters, military, police officers, and teachers, to name a few.

•      Demographic: Certain groups of people, such as college students or senior citizens, may qualify for additional savings. 

•      Multi-car: If you own multiple vehicles, you could qualify for a multi-car discount. Combining two or more of your vehicles into one policy will oftentimes reduce the price per vehicle you are paying, compared to insuring each vehicle separately.

•      Payments: Changing up how you pay is another popular way to get a discount on your auto premium. For example, you may get a discount when you pay your policy in full, sign up for auto-pay, or go paperless with statements.

•      Driver history: Popular driver history discounts can include rewarding you for an accident-free record, enrolling in a defensive driving course, or having low mileage usage. Do your best to avoid accidents by driving the speed limit, don’t text or use your phone, and use defensive driving techniques. 

•      Car-related: If your car is new, runs on alternative energy, has additional safety features, or is equipped with anti-theft, you will likely be able to get discounts on your car insurance policy.

•      Customer loyalty: Loyal customers could get a discount on premium costs as well as access to other perks like early renewal discounts.

•      Policy bundles: You could save big by bundling other insurance policies with your car. If you own a home or have life insurance, these policies could be bundled together for a potentially bigger discount.

When looking for the lowest rates on car insurance, you can cut down your monthly premium by asking about one or more of the discounts mentioned above. Talk to your car insurance company to see which discounts you can get. 

Deductibles 

A deductible is the portion of money you agree to pay for repairs or damages before your insurance policy kicks in. For example, say your car needs to be repaired and it will cost $2,000. If your deductible is $500, then you will have to pay $500 up-front before your insurance company will pay the remaining $1,500. And insurance deductibles often cover each claim individually. So, if you have a fender bender a month later, you will have to pay the deductible again.

Typically, the higher your deductible is, the lower your car insurance premium will be, and vice versa. Having a higher deductible may save you money on your monthly premium payment, but if you file a lot of claims, it will end up costing you more. Likewise, if you choose the lowest deductible but never file a claim, you could likely save on your premium by raising your deductible amount. You’ll need to find the right balance for your situation. 

Coverage levels 

The amount of coverage you get will also impact your price. Each type of insurance will have a maximum limit. That limit is the most the insurer will pay for a claim. Many states require a minimum amount of insurance. Further, if you are financing or leasing your vehicle, you may also have to meet certain requirements. Beyond that, you can select the amount of coverage you need. It’s a good idea to ask your insurer how different coverage limits will impact your premium. 

Credit 

Auto insurance companies typically consider credit history as a way of calculating your coverage and policy rates. Your credit score is an indicator of how likely you are to file an insurance claim and pay your policy on time. If you have credit problems, you can still find affordable rates. And as you increase your credit score, you will likely qualify for even better rates.  

Improving your credit score means paying your bills on time, having a good length of credit history, and a good mix of credit.

Mileage 

Some insurance companies offer a reduced premium for drivers who accumulate a lower-than-average number of miles per year. According to the United States Federal Highway Administration, the average motorist drives a little more than 13,000 miles annually or about 1,100 miles per month. If you drive less than this amount, you may qualify for a low-mileage discount. The exact discount you will receive varies from state-to-state and between insurance companies.

Vehicle(s) 

As mentioned in the discounts section above, having a car that comes equipped with additional safety features could mean getting helpful discounts on your insurance policy. For example, anti-theft features may reduce the likelihood of theft and anti-lock brakes could help avoid major accidents. Factors like these can reduce the price of car insurance premiums.

The size and model of your car can also play a role in what it costs to insure it. An expensive sports car will cost more to insure than a dependable minivan. Larger cars are generally safer in an accident compared to smaller cars that are easier to damage. In some cases, smaller cars with the same safety ratings as a larger vehicle may cost more to insure. 

Vehicle age also plays a role in insurance costs. The older a vehicle is, the more reliable and safe it may be, therefore making it less expensive to insure. When purchasing a vehicle, the overall cost of insurance should be a factor.

Driving record 

Much like your credit score, insurance companies will review your driving record to determine how risky you are to insure. If you have a history of accidents, traffic violations, or speeding, you will have to pay higher insurance premiums. As shown above, car insurance premiums will increase by about $600 on average after having an accident. So if you have a clean driving record, you’d pay an average of $885 per year with USAA. However, you could pay $1,229 after an accident and up to $1,683 after a DUI. One of the best ways to get the cheapest car insurance is to maintain a clean driving record.

Gabi can help you find your cheapest car insurance coverage 

Finding the best value in car insurance is about getting the cheapest cost but it’s also about the best price for the coverage you need. Using an online comparison tool is the perfect way to compare rates from different car insurance companies while getting the most coverage. Use Gabi’s online comparison tool to see which provider has the cheapest auto insurance for your situation. 

Editorial content on Gabi.com is not written by a licensed insurance agent. It is intended for informational purposes only and should not be considered legal or financial advice.

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