Best Cheap Car Insurance Companies

Erie offers the best cheap car insurance

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Car insurance can quickly get expensive, especially if you are a high-risk driver or have a DUI on your record.

If you’re looking for the cheapest car insurance companies, it’s important to consider what kind of coverage you’re getting for that low price. Our expert analysis includes industry ratings to offer a well-rounded portrait of each insurance provider so you can make the best choice for your family.

These are the best cheap car insurance companies of 2022.

Best Cheap Car Insurance Companies of May 2022

Best Overall : Erie

Investopedia's Rating
4.2

Erie Insurance

Erie Insurance

  • Price: $1,082 per year
  • Purchasing Options: Online, phone, local agent
  • Available Discounts: 8
Why We Chose It

Erie is not only convenient and accessible, but it offers some of the most affordable car insurance rates of 2022. 

Pros and Cons
Pros
  • Excellent accessibility

  • Extended coverage

Cons
  • Limited service area

  • Lacking mobile app capability

  • No online claims

Overview

Founded in 1925, Erie is a Fortune 500 company still based today out of Pennsylvania. It has a limited reach with service in just D.C. and 12 states: Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Wisconsin. Combined, over 13,000 agents are available to help with your policy. 

With Erie, you can purchase several types of auto insurance:

  • Comprehensive
  • Collision
  • Bodily injury liability
  • Property damage liability
  • Uninsured or underinsured motorist coverage
  • Roadside assistance
  • Rental car expense coverage
  • New car protection
  • Motorcycle insurance
  • Pet injury coverage
  • Rideshare insurance
  • Gap insurance

There are just eight car insurance discounts available, but they’re some of the discounts that matter most. They include signature programs like Erie Rate Lock, which protects your rate from inflation, and Erie Auto Plus, which bundles key services like increased policy limits and a waived or diminishing deductible option. Young drivers can benefit from a host of youth- and student-related discounts, while the family can save when everyone signs up with Erie for their insurance. Discounts like these help make already affordable rates even cheaper. 

When you’re ready to purchase, it’s made easy with online, phone, and local agent options. 

Erie holds high scores for customer satisfaction from J.D. Power, performing especially well within the North Central region. It also scores high with AM Best for financial strength. However, it scores about average in its loss ratio (based on NAIC data), suggesting average financial reliability.

Read our full Erie car insurance review.

Best for Discounts and Drivers Younger Than 25 : Allstate

Investopedia's Rating
4.1

Allstate

Allstate

  • Price: $1,674 per year
  • Purchasing Options: Online, phone, local agent
  • Available Discounts: 14
Why We Chose It

Allstate has been a long-standing source of support for young drivers, especially due to its wide-ranging coverage and high number of discounts.

Pros and Cons
Pros
  • Fantastic discounts

  • Expanded coverage

  • Multi-faceted roadside support

Cons
  • Restricted policy terms

  • Poor customer satisfaction

  • Roadside assistance costs extra

Overview

Established in 1931, Allstate has its headquarters in Illinois and provides services in all 50 states and D.C.

Allstate offers several types of insurance:

  • Collision
  • Comprehensive
  • Liability
  • Medical payments
  • Uninsured and underinsured motorist
  • Personal injury protection
  • Custom equipment
  • Personal umbrella 
  • Rental reimbursement
  • Classic car insurance
  • Mexico tourist car insurance
  • Gap insurance

Two types of roadside assistance are also available, for both occasional and heavy drivers, so you don’t have to pay any more than necessary for your insurance. 

Policies are sold in six-month terms, which may be a problem for some drivers accustomed to full 12-month terms. You have multiple ways to save, like the Drivewise program which uses telematics to set your auto insurance rates. Many other discounts are available for students with good grades, bundling home and auto insurance, and insuring a new car, for example.

There are excellent tools to help you navigate and make changes to your policy. In addition to online quotes and phone support, you have the option of meeting a local agent who can work side-by-side with you to ensure all of your concerns are addressed.

Just beware of the customer service: Allstate fails to score well among J.D. Power rankings, although AM Best deems it financially sound.

Read our full Allstate car insurance review.

Best with a Bad Driving Record : New Jersey Manufacturers

Investopedia's Rating
4.5

New Jersey Manufacturers Insurance

New Jersey Manufacturers Insurance

  • Price: $1,310 per year
  • Purchasing Options: Phone, local agent
  • Available Discounts: 12
Why We Chose It

New Jersey Manufacturers (NJM) Group may not be as big as some of its competitors, but it’s the company to choose if you prioritize safe driving.

Pros and Cons
Pros
  • Financially sound

  • Superior customer satisfaction

  • Offers online quotes

Cons
  • Limited service area

  • Roadside support costs extra

  • No mobile app

Overview

As a smaller insurer, New Jersey Manufacturers Group focuses on more of a niche market than other companies, with service in only five states: Connecticut, Maryland, New Jersey, Ohio, and Pennsylvania. Still, NJM brings decades of experience, offering a variety of insurance products since its establishment in 1913. 

NJM has several insurance products available:

  • Liability coverage
  • Medical expenses
  • Underinsured and uninsured motorist coverage
  • Gap insurance
  • Collision
  • Comprehensive
  • Classic and collector car
  • Motorcycle and ATV
  • Boat and personal watercraft

While online quotes are available, policies must be purchased either over the phone or directly through a licensed insurance agent. To help lower the cost of auto insurance, there are 12 discounts available, offering savings for everything from safe driving to being a student or setting up autopay. However, roadside assistance does come at an extra cost, making it even more important that you leverage NJM car insurance discounts wherever possible. 

Once you are an NJM client, you can look forward to highly-rated service from a company that consistently receives top scores for customer satisfaction from J.D. Power. NJM also receives strong ratings from AM Best, signifying strong financial stability and efficient claims processing when you need it most. Policy management, payments, and claims processing can all be conveniently done online.

Read our full New Jersey Manufacturers Group car insurance review.

Best for Safe Drivers : Auto-Owners

Investopedia's Rating
4.3

Auto Owners

Auto Owners

  • Price: $1,157 per year
  • Purchasing Options: Local agent
  • Available Discounts: 13
Why We Chose It

If you’re a safe driver, Auto-Owners could be the best auto insurance company for you with excellent rates and discounts for drivers with no or few accidents.  

Pros and Cons
Pros
  • Financially strong

  • Exclusive discount programs

  • Multiple other discounts

Cons
  • No quotes online

  • Restricted customer support

  • Limited area served

Overview

Established in 1916, Auto-Owners holds its headquarters in Michigan. It’s a smaller operation, servicing just 26 states, but there are many different types of car insurance available, including boat, ATV, motorcycle, and RV insurance. There are other types of insurance too, such as home, life, pet, and flood, to round out your coverage.

 Auto-Owners offers several options for your auto insurance policy:

  • Collision
  • Comprehensive
  • Liability
  • Uninsured and underinsured motorist
  • Medical payments
  • Personal injury protection
  • Additional expenses
  • Gap insurance
  • Rental car coverage
  • Purchase Price Guarantee
  • Gap coverage
  • Diminished value coverage

Auto-Owners provides quite a few ways to save on your insurance. There are 13 discounts, including Auto-Owners’ signature program— the Personal Price Guarantee—make sure you always get the best price. There’s also the Personal Automobile Plus Package: a combination of several of Auto-Owners’ top services, such as identity theft and cell phone protection. However, if you want a quote for a car insurance policy, you will need to contact an agent directly for assistance.

According to AM Best rankings, Auto-Owners is a financially sound company. It also consistently receives above-average scores from J.D. Power for customer satisfaction, making it a safe bet, in addition to an affordable one.

Read our full Auto-Owners car insurance review.

Best for Military Families : USAA

Investopedia's Rating
4.5

USAA

USAA

  • Price: $1,471 per year
  • Purchasing Options: Online, phone, agent
  • Available Discounts: 12
Why We Chose It

USAA is a membership-based insurance provider for active-duty and veteran military members and their families. There are several military-specific resources available to help with everything from car buying to auto insurance. 

Pros and Cons
Pros
  • Fantastic customer service ratings

  • Expanded insurance protections

  • Military-specific savings program

Cons
  • USAA membership required

  • No local agent network

Overview

USAA was founded in 1922 and is headquartered in San Antonio, Texas. It provides a full menu of insurance coverage to the military community in all 50 states.

USAA offers the following types of car insurance coverage:

  • Comprehensive
  • Collision
  • Liability
  • Uninsured and underinsured
  • Gap insurance
  • Roadside assistance
  • Rental reimbursement
  • Rideshare insurance

In addition to auto insurance, USAA provides other policies including homeowners, life, property, and even health insurance. If you bundle multiple policies with USAA, you can save money with added discounts. Online quotes are available or you can contact an agent for more assistance. 

In all, USAA has 12 car insurance discounts. This includes discounts for student drivers, good students, and safe drivers. If your parents are USAA policyholders, you can apply a legacy discount to your premium. There are also military-specific discounts, such as a discount when you store your car on a military base and discounts while on deployment, plus savings for low annual mileage. 

Few companies are able to provide the level of customer service and satisfaction that USAA offers. USAA is consistently rated the top provider for customer service from J.D. Power throughout the U.S., although it has a different customer base than most insurance companies.

Read our full USAA auto insurance review.

Final Verdict

The best car insurance companies offer extensive coverage, flexible policies, affordable pricing, and award-winning customer service. Based on our analysis, Erie is the best cheap auto insurance company because it offers policies that are affordable, accessible, and flexible for your family’s needs. However, Erie services a restricted area of just 12 states and D.C, so you may have to check the rest of the list to find a company that works for you.

Compare Best Cheap Car Insurance Companies

Provider Price Purchasing Options Available Discounts Other Available Coverage
Erie
Best Overall
$1,621 Online, phone, local agent 8 Motorcycle, RV, marine, renters, flood, personal valuables, life, umbrella, business, identity theft
Allstate
Best for Discounts and Drivers Younger Than 25
$2,641 Online, phone, local agent 14 Homeowners, renters, motorcycle, marine, classic car, RV/ATV, business, life, pet, identity theft, tuition
New Jersey Manufacturers (NJM) Group
Best With a Bad Driving Record
$1,694 Phone, local agent 12 Liability, comprehensive, collision, underinsured/uninsured, medical expenses, classic and collector car, motorcycle and ATV, boat and personal watercraft
Auto-Owners
Best for Safe Drivers
$1,785 Local agent 13 Bodily injury liability, collision, comprehensive, property damage liability, medical payments, uninsured/underinsured motorist coverage
USAA
Best for Military Families
$1,471 Online, phone, agent 12 Motorcycle, ATV/RV, classic car, marine, aviation, renters, landlord, umbrella, flood, farm, mobile phone, life, health, business

Guide for Choosing the Best Cheap Car Insurance Companies

Should You Purchase Cheap Car Insurance?

Auto insurance is a requirement for drivers in most states. Should you become involved in an accident, the right kind of auto insurance can protect you, regardless of who is at fault. You can get coverage for accidents with other vehicles, people, or objects, and even with uninsured or underinsured drivers. Without car insurance, you could find yourself on the hook for both financial and legal penalties if you are in an accident, and this could mean paying a huge expense out of your own pocket. 

But what happens when you have a small budget for car insurance? Cheap car insurance can sometimes be a gamble—you could end up with a company that has terrible customer service, or worse, inadequate coverage at a time when you need it most. Our list of the best cheap car insurance companies combines reliable coverage, financial strength, and first-rate customer service at an affordable price for your family. 

How to Compare Affordable Car Insurance Companies

There are several factors to consider when comparing affordable car insurance companies.

  • Coverage: Insurance companies can vary in the coverage they offer. While some stick to just the traditional forms like collision and comprehensive insurance, others may go the extra mile with additional options like gap insurance and rideshare insurance. 
  • Cost: Budget can be a determining factor when determining which car insurance company is best for your needs. We’ve picked the most affordable providers for our list.
  • Discounts: Many insurance companies offer a variety of discounts that can help you save money, such as savings for setting up autopay, being a safe driver, or being a college student.
  • Quotes: Certain companies make it quick and easy to get a quote online; others are not so convenient.
  • Claim submittal: If you get in an accident, how easy is it to submit a claim? Can you submit it online, or do you need to call?
  • Policy management: Some companies have better online interfaces than others, or allow you to speak with a local agent to discuss your policy and claims. Some even have mobile apps.
  • Ratings: From AM Best for financial stability to J.D. Power for customer service, industry ratings can help you determine what to expect from an insurance company.

Selecting a Cheap Car Insurance Company

Before you choose any car insurance company, we strongly recommend taking the time to shop your options. Gather and compare car insurance quotes from multiple providers to find the right coverage for your needs at the best price.

Once you decide which insurer is best for you, it’s time to purchase your policy. Some companies will allow you to buy a car insurance policy online, while others may require you to call or visit an agent. 

Once you purchase your policy, you will gain access to an online dashboard, and sometimes also a mobile app, that will allow you to make payments, file claims, and manage your policy.

FAQs

Can I Get Cheap Car Insurance If I’m Under 25?

While teens and young drivers under 25 traditionally face higher car insurance rates, it is possible to find affordable rates if you choose a cheap car insurance company. Our list of the best cheap car insurance companies is an excellent place to begin your search.

What Are the Different Types of Cheap Car Insurance?

Traditional auto insurance policies include collision, comprehensive, medical payments, and uninsured/underinsured motorist coverage. Higher coverage limits and policy additions will increase your price, of course, but you can find many inexpensive basic policies. Be sure to inquire about the specific forms of car insurance coverage available as this can vary between providers.

Is Cheap Car Insurance Worth It?

You need car insurance, but that doesn’t mean you need to spend a fortune. It is possible to find comprehensive car insurance at an affordable price, especially when you shop and compare our picks for the best cheap car insurance companies. But be aware that if you’re looking for a cheap policy, you’ll get what you pay for.

How Can I Find Cheap Car Insurance?

Before committing to one car insurance company, it's always a wise decision to shop around and collect multiple quotes before committing to a provider; be sure to peruse the list of available discounts with each insurance company and be sure of what's available in your state.

On your own behalf, maintain a clean driving record and find ways to improve your credit score. Also, if the company offers different types of property insurance, consider bundling your auto and homeowners policies for additional savings.

How Much Coverage Do I Need?

When you look into car insurance, it's important to remember that different types of coverage take care of a variety of damages. When determining how much car insurance you need, you first should verify what your state's required coverages include. Base your decisions on which coverages and deductibles you select on the age and value of your car. While things like GAP coverage and collision/comprehensive make sense for newer vehicles, they don't always provide any real benefits to drivers with older, high-mileage cars.

How We Chose the Best Cheap Car Insurance Companies

Our team evaluated 25 insurance companies and collected thousands of data points before selecting our top choices. We weighed eight criteria and gave a higher weight to those with a more significant impact on potential customers. 

The top picks were selected based on factors like median annual premium (weighted 30%), fairness in pricing methodology (weighted 10%), and regional availability (weighted 15%). We also took into account other features that are important to buyers including complaint scores, consumer satisfaction reports from J.D. Power and Consumer Reports, and company loss ratios.

For further information about our selection criteria and process, our complete methodology is available.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
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