Low-Income Car Insurance Guide
Quick Answer
Low-income car insurance programs offered by California, Hawaii and New Jersey provide low-cost car insurance to drivers who can’t afford regular coverage. If you don’t live in these states, you can consider a policy with insurers who offer the cheapest minimum coverage car insurance in the U.S.
Car insurance is essential, but can also be expensive, especially if you're on a low income. Low-income car insurance at reduced rates is available to drivers in California, Hawaii and New Jersey who meet each state's criteria. Low-income auto insurance plans help motorists who can't afford car insurance maintain bare-bones coverage, protecting them and other drivers.
While your income doesn't affect your car insurance rate, it does affect your ability to qualify for low-income auto insurance programs. Here's a closer look at how low-income car insurance works and other options for finding low-cost car insurance.
States With Low-Income Car Insurance
Three states offer low-income auto insurance assistance programs: California, Hawaii and New Jersey. Here are the qualifications for each state's low-income car insurance program.
Low-Income Car Insurance for California
Qualifying California drivers can buy basic auto insurance through California's Low Cost Auto Insurance (CLCA) program. Applicants must have a valid California driver's license, own a vehicle worth $25,000 or less, have a good driving record (or be a new driver) and meet age and income guidelines.
The basic CLCA policy provides less coverage than California's minimum liability insurance requirements. CLCA's coverage includes bodily injury liability coverage of $10,000 per person and $20,000 per accident, plus $3,000 in property damage liability coverage. Annual premiums range from $199 to $920 depending on your county. Drivers also have the option to buy uninsured motorist coverage and medical payments coverage.
To learn more or apply for coverage, visit the CLCA website or call 866-602-8861.
Low-Income Car Insurance for Hawaii
Hawaii residents may qualify for free no-fault auto insurance for one vehicle if they meet all the following conditions:
- Receive public assistance benefits consisting of direct cash payments, receive Supplemental Security Income (SSI) benefits or received public assistance in the form of medical services prior to July 1, 1994, and are still receiving the medical benefit
- Have a valid driver's license
- Are the sole registered owner of the vehicle
Insured vehicles cannot be used for business purposes (such as rideshare driving).
Additional vehicles may be eligible for free auto insurance if they are used for transportation to and from your place of employment or are necessary for transportation to medical appointments.
For more information, call the statewide Public Assistance Information System at 855-643-1643 or visit the Hawaii Department of Human Services website and submit a message requesting further information through the Contact Us option.
Low-Income Car Insurance for New Jersey
New Jersey has two low-income auto insurance options, both of which are available from most insurance providers.
The Basic Policy is designed for drivers who have minimal assets, can't afford minimum liability insurance and are considering driving uninsured. This bare-bones policy includes property damage liability coverage of $5,000 per accident and personal injury protect (PIP) coverage of $15,000 per person, per accident (up to $250,000 for certain injuries). Some insurers also offer the option to buy bodily injury liability coverage of $10,000 per accident, as well as comprehensive and collision coverage.
The Special Automobile Insurance Policy (SAIP) is available to qualifying Medicaid recipients. It covers emergency treatment immediately after a car accident, treatment of serious brain and spinal cord injuries up to $250,000, and a $10,000 death benefit.
Bare-bones auto insurance offered through low-income assistance programs is preferable to driving uninsured. However, purchasing the cheapest car insurance you can find may cost you more in the long run. The average auto accident with no injuries costs $6,100 per car, according to National Safety Council data; accidents involving injuries can cost hundreds of thousands of dollars. If you're involved in an accident, you could be financially responsible for any costs your car insurance doesn't cover.
Learn more: What to Do if You Can't Afford Car Insurance
Who Offers the Cheapest Car Insurance?
The average cost of minimum coverage car insurance is $2,024 annually, and the average cost of full coverage car insurance is $4,051 annually, according to Experian data as of April 2025. Purchasing the minimum liability insurance that your state requires is usually the cheapest option. The table below shows the insurance carriers offering the cheapest minimum coverage car insurance in the U.S.
| Carrier | Annual Cost | Monthly Cost |
|---|---|---|
| Mercury | $1,141 | $95 |
| Liberty Mutual | $1,229 | $102 |
| Safeco | $1,309 | $109 |
| Root | $1,482 | $124 |
| Grange | $1,605 | $134 |
Source: Experian data as of January 2025
Note: Costs above represent insurance quotes, not policy premiums
It's important to keep in mind that minimum coverage car insurance may not offer enough financial protection if you're involved in an accident—especially if you're found to be at fault. Insurance professionals typically advise carrying liability coverage of at least $100,000 per person and $300,000 per accident for bodily injuries, and $100,000 for property damage.
If your car is financed or leased, your lender or lessor may require you to carry full coverage auto insurance, which includes comprehensive and collision coverage to protect the vehicle. For example, if your car sustains major damage in a crash, full coverage insurance would pay to repair it. Without full coverage, you'd be on the hook for repairs—so even if your car is paid off, spending a little more for full coverage insurance could make financial sense.
The table below shows the insurance carriers offering the cheapest full coverage car insurance in the U.S.
| Carrier | Annual Cost | Monthly Cost |
|---|---|---|
| Grange | $2,445 | $204 |
| Integrity | $2,488 | $207 |
| Mercury | $2,537 | $211 |
| Root | $2,541 | $212 |
| Liberty Mutual | $2,602 | $217 |
Source: Experian data as of January 2025
Note: Costs above represent insurance quotes, not policy premiums
Learn more: How Much Car Insurance Do I Need?
What Factors Affect Your Car Insurance Rates?
Several factors affect your insurance premiums, including:
- The car you drive: Vehicles that are expensive to replace or repair generally cost more to insure.
- Your driving record: A history of accidents, moving violations or insurance claims can indicate you're a high-risk driver, which typically means higher insurance premiums.
- Your age and gender: Younger drivers and men generally pay more for car insurance because they're statistically more likely to be involved in accidents.
- Your annual mileage: The more miles you drive annually, the greater your chances of being involved in an accident, so a long commute could translate to higher insurance rates.
- Your location: Your car insurance premiums may be higher if you live somewhere with a lot of traffic, auto theft or extreme weather.
- The type and amount of coverage you buy: Buying full coverage car insurance, adding PIP or extra coverage such as rental car reimbursement, or increasing your coverage limits generally costs more than purchasing minimum coverage.
- Your credit: Insurers in most states can consider your credit-based insurance scores when you apply for car insurance. (California and Hawaii are among the states that prohibit this practice.) A low score could mean paying more for car insurance.
While our cheapest auto insurance figures may be good general guidelines, the cost of your car insurance can vary.
How to Save Money on Car Insurance
Even if your state doesn't offer low-income car insurance, there are things you can do to help lower your premiums.
- Choose a higher deductible. You can typically choose from an auto insurance deductible of $250 to $2,000. Higher deductibles usually mean lower premiums; just make sure you could afford to pay the deductible in case of a claim.
- Explore discounts. Check to see if auto insurance providers offer discounts for things like bundling home and auto insurance, paying premiums upfront, automating payments or getting quotes online. Your employer and membership groups you belong to might offer discounts on car insurance too.
- Drive less. Can you reduce your annual mileage by taking public transportation, walking, carpooling or biking more often? Driving less than 7,500 miles annually may qualify you for low-mileage discounts.
- Be a safe driver. Maintaining a clean driving record without moving violations or accidents can help keep your auto insurance premiums down.
- Switch cars. Cars that cost less to replace or repair are generally cheaper to insure. Consider selling or trading in your car for one with more affordable insurance.
- Improve your credit. Insurers in most states can check your credit-based insurance score when you apply for car insurance; a poor score could mean higher premiums. Although credit-based insurance scores differ from consumer credit scores, they're calculated using the same information, so actions to improve your consumer credit score may boost both scores.
- Shop around. Comparing quotes from a variety of insurers is a smart way to find the lowest prices on auto insurance. You can get auto insurance quotes online, by contacting insurance companies directly or by using an online insurance marketplace.
Learn more: Best Car Insurance Discounts
Get Help Finding Affordable Car Insurance
Checking your credit report and credit score can give you an idea of where your credit-based insurance score may fall. Paying bills on time and reducing your credit utilization rate could help improve your credit, potentially saving you money on auto insurance.
To save time shopping for car insurance, try Experian's free car insurance comparison tool. It gathers car insurance quotes from multiple top insurance companies in your state so you can easily see which provider offers the lowest rates.
Don’t overpay for auto insurance
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About the author
Karen Axelton
Karen Axelton specializes in writing about business and entrepreneurship. She has created content for companies including American Express, Bank of America, MetLife, Amazon, Cox Media, Intel, Intuit, Microsoft and Xerox.
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