Affordable Low-Income Car Insurance in 2024

There have been a lot of changes happening in the last couple of years. Some of us are relying on less income than we previously had, while others are finding their driving habits have changed as remote work remains a staple. In both these scenarios a change in car insurance might be warranted, but how do you know what you need?

Finding the best car insurance for your budget and lifestyle may feel confusing, but it doesn’t have to be an overwhelming process. While everyone who owns and operates a vehicle needs auto insurance, cost and coverage vary, and peoples’ insurance needs aren’t cookie cutter. There are plenty of affordable, low-income car insurance options out there, so, let’s break it down a little bit.

Factors in Choosing Low-Income Car Insurance

When choosing the best auto insurance for your budget, you have to consider a few things:

First, each state has its own set of laws that dictate the absolute minimum of coverage one can have for their vehicle. Some states require very little, while others are far more stringent. Typically this information can be found on the DMV or Secretary of State website for your state.

Second, the make and model of the car can also determine cost. For example, a brand new sports car is generally going to cost a lot more to insure than a used minivan.

Third, understanding that there is a spectrum of auto insurance plans and coverages they provide. From basic liability coverage and personal injury protection to comprehensive coverage, where your plan lands on this spectrum will determine your rates.

Additional factors are: age, driving record and accident history, credit score, ZIP code, and marital status.

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Different Kinds of Insurance Coverage

When choosing the kind of package that makes the most sense for you, keep in mind that there are on average seven types of coverage.

• Liability Insurance. Liability insurance protects others in the event they are injured or their vehicle is damaged and you (the driver) are at fault.  This type of insurance is almost always required by law.
  • Bodily Injury Liability. Again, this one protects others. It assists injured drivers and passengers by covering medical expenses if you’re responsible for the accident. It may also help cover the cost of your legal fees if you end up being sued for damages by the other party.
  • Property Damage. This insurance, as it sounds, pays for damages to another person’s vehicle and also their personal property, such as a damaged building front. Most states require this type of insurance.
• Collision. Collision helps pay for damages done to your car whether it occurs from actually colliding with another motorist or say a tree branch falls on it and breaks your windshield. Generally, when one is leasing a car, collision is required. It is also typically required by the lender if your car isn’t yet paid off.
• Comprehensive. This type of insurance will cover damage done to your vehicle whether it’s from another vehicle, theft, or a naturally occurring disaster. This type of coverage is rarely required by state law or if you own your car outright, but if you are leasing or dealing with a lender, it generally will be.
• Personal Injury Protection (PIP). This coverage helps pay medical costs for the driver if they are injured in an accident. This insurance is only required in states with no-fault insurance laws, but can be a helpful add-on.
• Uninsured/Underinsured Motorist Coverage. This option helps you pay for damages to your vehicle if you are hit by an underinsured or uninsured motorist, which unfortunately can and does happen.

So, now that you have a better understanding of the different kinds of coverage offered, let’s see which companies have some of the more affordable rates.

USAA

While this insurance is only available to active or retired military members and approved family members, USAA is the most affordable insurance, hands down. Whether you have a squeaky clean driving record or there have been a few mishaps along the way, USAA still offers the most competitive rates for many drivers across the board. Its national average for a plan runs $1,381 annually.

Pros

• lowest national rates
• not penalized for driving history (including a DUI)
• high customer satisfaction score

Cons

• only military members and their families can participate

 Geico

Geico is a leader in its field and consistently receives positive customer feedback while offering very competitive rates. Its national annual auto premiums range from $1,182 for drivers with clean records to $1,579 for drivers with a speeding ticket, making Geico one of the more affordable companies with a solid reputation.

Pros

•  Low consumer complaint record
•  Good for those with low credit scores
•  Offers accident forgiveness
•  Good options for those with speeding tickets or a history of driving uninsured
•  Great rates for teen drivers

Cons

• Higher rates for those with DUI history
• Not the best option for bundling home and auto

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State Farm

With a century-long history in providing insurance and an A+ rating with the BBB, this company’s reputation precedes itself. State Farm is very lenient when it comes to driving record faux pas, and with an annual average rate of $1,402 for good drivers and around $1600 for those with a speeding ticket, it is one of the top-ranking affordable insurances in the country.

Pros

• Lenient about driving record (including DUI)
• Well established history
• A+ rating with the BBB
• Good rates for teens
• Good rates for seniors

Cons

• Not the best option for those with poor credit
• Doesn’t offer accident forgiveness

Progressive

Progressive is the third largest auto insurance company in the nation and prides itself on being one of the first to offer non-standard insurance. This company incentivizes those with good driving records and rates are still on the lower end compared with other large insurance companies. On average, you will pay around $1892 annually with a clean driving record.

Pros

•  Competitive rates for those with a good driving record
• Low customer complaint profile
• Offers commercial rideshare insurance

Cons

• Aren’t particularly lenient for those with poor driving records
• Not the best choice for bad credit

The Right Low Income Car Insurance

With changing lifestyles and economic influences, sometimes we find our budgets get a little tighter and we need to make some adjustments. Choosing a more affordable auto insurance option can be a great place to start.

Having an understanding of the kinds of plans offered, while being aware of the factors that influence your insurance rates, such as age, driving history, credit score, and ZIP code can help you make a more informed decision. There are many wonderful insurance companies out there, large and small, each with their own sets of pros and cons, but when it comes to affordability, USAA, Geico, State Farm, and Progressive rank high.

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