Your income doesn’t factor into the cost of car insurance, so you won’t pay higher rates simply because you don’t make a lot of money. Still, high car insurance costs can be a problem for low-income families and individuals.
California, Hawaii, and New Jersey have programs that offer cheaper car insurance to low-income families. In other states, low-income drivers should start by getting quotes from the cheapest car insurance companies and comparing options to find the best rates.
Is there government car insurance for low-income drivers?
Unlike with health insurance, where low-income families can get covered with Medicaid or by qualifying for tax breaks, there is no low-income auto insurance for families provided by the federal government.
Drivers who need help with their car insurance payments may be able to qualify for cheaper rates through a state-run program, depending on where they live. But there are only a few states that offer low-income car insurance programs:
If you live in any other state and you’re looking for low-income car insurance, you’ll simply have to shop around to find the company with the cheapest insurance rates.
Companies all have different rates for low-income drivers depending on things like location or driving history, but some of the cheapest car insurance companies by average rate include:
Cheapest car insurance rates among the largest companies in the country.
Can you get free car insurance if you have a low income?
Unfortunately, there’s not a way for low-income households to get free car insurance. Even in places that have state-subsidized car insurance, most low-income families will still have to pay something for their insurance.
Car insurance for low-income drivers in California
California’s Low Cost Auto Insurance program (CLCA) is the state’s government-administered car insurance program for low-income drivers. It provides eligible drivers with basic liability insurance, plus the option to get uninsured motorist and medical payments coverages.
Who can qualify: In order to get low-income car insurance through the California CLCA program, drivers have to:
Be at least 16 and have a California driver's license
Own a car that’s worth less than $25,000
Have a clean or new driving record
Meet income requirements that are based on your family’s size
How to get coverage: If you’re eligible to get low-income insurance through CLCA, you’ll have to show your current vehicle registration, plus proof of your income, along with the initial deposit for your first insurance payment.
Car insurance for low-income drivers in Hawaii
Some low-income drivers in Hawaii may qualify for free auto insurance from the state’s Office of Health and Human Services. This makes Hawaii the only state that offers free car insurance for any low-income drivers.
Who can qualify: To be eligible for Hawaii’s no-cost car insurance, you have to have been receiving supplemental security income through the Social Security Administration (SSA). This means you must also meet the SSA’s income and residency requirements.
How to get coverage: As long as you’re the sole legal owner of your vehicle and are licensed to drive, you can fill out an eligibility form from the state’s Office of Health and Human Services to apply for coverage.
Car insurance for low-income drivers in New Jersey
New Jersey’s Special Automobile Insurance Policy (SAIP) is a program that provides car insurance to some low-income drivers in the state. It’s sometimes referred to as dollar-a-day car insurance because of the low rate.
But an SAIP policy only covers emergency medical care after a car accident, and doesn’t include coverage for damage you cause in an accident.
Who can qualify: Not every low-income driver in New Jersey qualifies for SAIP. Instead, you can only enroll in the program if you already qualify for Federal Medicaid with Hospitalization.
How to get coverage: You can get SAIP from most insurance companies in New Jersey, but if you’re having trouble finding coverage, the state has a database that lets you find companies that offer SAIP plans.
How low-income drivers can get cheaper car insurance
If you don’t live in a state that offers subsidized auto insurance to low-income drivers, there are still ways to get a cheaper policy. To get cheaper rates as a low-income driver, you should:
Get the right amount of coverage for your car: Not every driver needs full-coverage insurance. If you own an older car and don’t have a loan on it, you may be able to drop any extra insurance and reduce your rates by hundreds of dollars a year.
Bundle insurance policies: If you already have another insurance policy, like renters, condo, or home insurance, you should get your car insurance from the same company. You’ll get a discount for bundling your insurance from the same place.
Try a usage-based insurance policy: Some companies have usage-based insurance plans that are cheaper than a regular policy. With a usage-based plan, your driving habits will be tracked and your rates will go down if you’re a safe driver.
Compare quotes from multiple companies: The most effective way for low-income drivers to find the cheapest insurance rates is by comparing quotes before buying.
Improve your credit: While income doesn’t have an impact on your car insurance rates, your credit score can, so taking small steps to improve your credit can lower your car insurance.
There are other ways to get low-income car insurance after you buy a policy. Low-income drivers can make their rates cheaper (and avoid rising costs) by:
Signing up for a defensive driving class
Avoiding a lapse in coverage by making regular payments
Checking for good student discounts and keeping up good grades
Enrolling in automatic monthly payments
Staying out of accidents and avoiding tickets
Best car insurance for low-income drivers in every state
Our analysis found that if your household income is at the national poverty level, the average cost of car insurance would take up 12% of your yearly income. That’s expensive, but it’s possible to get much cheaper rates from some companies — even for a full-coverage policy.
Here’s a list of the cheapest car insurance companies (on average) in every state, along with the average rate for a minimum-coverage policy.
Average monthly cost
Companies that have an asterisk are the second-cheapest company behind USAA, which is only available to drivers who are in the military or part of a military family.
While the cheapest car insurance company in your state may not be the cheapest option for every driver, it may be the best place for most low-income drivers to start their search for affordable insurance.
Our team of data and insurance experts at Policygenius found the best rates for low-income drivers by analyzing hundreds of thousands of rates from every ZIP code and every state (including the District of Columbia).
These rates were for a 30-year-old driver of a 2017 Toyota Camry with a clean driving record, who was insured with the following limits:
Bodily injury liability: $50,000 per person, $100,000 per accident
Property damage liability: $50,000 per accident
Uninsured/underinsured motorist: $50,000 per person, $100,000 per accident
Comprehensive: $500 deductible
Collision: $500 deductible
Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of costs. Your actual quotes may differ.