How to Get Low-Income Car Insurance
If you have a low income, you might be able to get car insurance through a government program. You can also shop around for a cheap policy from regular car insurance companies.
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Car insurance companies don't give special rates to people with low incomes. But California, Hawaii and New Jersey have state-sponsored car insurance programs for people with low incomes. If you live in another state, you should shop around, buy only the coverage you need and drive as safely as possible.
Key takeaways
- California, Hawaii and New Jersey have car insurance programs for people with low incomes.
- Insurance companies don't offer special "low-income" rates.
- State minimum coverage offers very little protection, but it's better than not having insurance if you can't afford anything else.
Government auto insurance for people with low incomes
If you live in California, Hawaii or New Jersey, you may be able to get car insurance through a government program specifically for people with low incomes.
California
A policy from the California Low Cost Automobile (CLCA) costs between $244 and $966 per month, depending on where you live in California. You can get coverage if you meet the income requirements, which are based on how many people are in your household.
Number of people | Annual income limit |
|---|---|
| 1 person | $32,200 |
| 2 people | $43,550 |
| 3 people | $54,900 |
| 4 people | $66,250 |
You also have to meet four other requirements to get coverage:
- Have a valid driver’s license in California Own a car that's worth $25,000 or less Are at least 16 years old Have a good driving record
A good record means you haven't caused any accidents that resulted in injuries within three years and you haven't had any felony or misdemeanor convictions related to your driving. You can have one at-fault accident where you caused damage to someone's car or a moving violation that put one point on your license in the last three years.
If you're an immigrant, you can still get coverage through the CLCA, as long as you meet the other requirements.
Hawaii
Hawaii offers free no-fault car insurance to people who have low incomes. To qualify, you must:
- Get Supplemental Security Income (SSI) or state financial help
- Have a valid Hawaiian driver's license
- Be the only owner of the vehicle that's going to be covered
You also can't have other no-fault car insurance coverage available to you.
Typically, you can only insure one car in your household with this program. In a few scenarios, such as needing a specific car for work or doctor appointments, you might be able to get courage for more than one car.
New Jersey
New Jersey offers the Special Automobile Insurance Policy (SAIP), which is often called "dollar-a-day" coverage, because it costs $365 each year. If you pay all at once, though, you can get a discount of $5 off your rate.
You can only get this coverage if you're on Medicaid.
Coverage from the SAIP is extremely limited. You only have coverage for emergency medical care that you get right after an accident and treatment for brain and spinal injuries up to $250,000. The policy will also pay $10,000 if you pass away in a car accident.
Coverage from the SAIP isn't the best option for most people. You only have coverage for some your own medical bills after an accident. You don't have any coverage for the injuries or damage that you cause to anyone else or any coverage for damage to your own car. You also don't have coverage for your damages if you get hit by an uninsured motorist.
The coverage is better than nothing if it's the only thing you can afford, but it could also leave you with massive bills if you cause an accident.
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Government car insurance for high-risk drivers
If you have a low income, you may have been driving without insurance or have a low credit score. These factors can mean you're a "high-risk driver," even if you don't have tickets or accidents on your record.
If you can't get car insurance from a regular insurance company, you may need to fall back on your state's high-risk program. Once you've had insurance through the program for six months to a year, you can probably get coverage through a regular car insurance company.
High-risk car insurance programs by state
Best cheap car insurance companies if you have a low income
Auto-Owners balance cheap minimum coverage with good service. It's a great option if you have a low income.
If you have a low income but you don't live in a state where you can get coverage through a government program, your best option is to shop around and buy your own policy.
Good car insurance companies with cheap minimum coverage
Find Cheap Car Insurance Quotes in Your Area
Minimum coverage car insurance isn't usually a good choice unless you can't afford anything else. If you have a low income, minimum coverage is better than nothing. But the limits are very low and can leave you with large bills to pay if you get into an accident. Higher limits can save you money overall, if you can afford a bigger monthly car insurance bill.
Good car insurance companies with cheap minimum coverage
Company |
ValuePenguin score
| Avg. min. cov. rate | |
|---|---|---|---|
| Auto-Owners | $52 | ||
| Geico | $65 | ||
| Travelers | $68 | ||
| State Farm | $73 | ||
| USAA* | $41 | ||
*USAA is only available to military members, veterans and certain family members.
ValuePenguin reviews insurance companies using average rates, discounts, coverage options, customer service and unique features. Our team has over 50 years of experience and includes licensed insurance agents. ValuePenguin reviews are always unbiased and objective.
Read the full breakdown of how ValuePenguin reviews car insurance companies and gathers rates.
Cheapest minimum coverage by state
Geico has the cheapest minimum coverage car insurance in 11 states.
- State Farm is the cheapest company for minimum coverage in eight states.
- Looking into regional companies, such as Erie and Auto-Owners, can also help you get cheaper rates.
Cheapest minimum insurance quotes in each state
State | Avg. min cost | Cheapest company | Company rate |
|---|---|---|---|
| Alabama | $66 | Travelers | $43 |
| Alaska | $55 | Geico | $45 |
| Arizona | $90 | Travelers | $70 |
| Arkansas | $63 | State Farm | $47 |
| California | $75 | Geico | $41 |
All rates are monthly rates for each state's minimum coverage requirements.
Does income affect your car insurance rates?
Income doesn't directly affect your car insurance rates, but it can be tied in with other factors that do.
Age
Younger people usually pay more for insurance, and are also more likely to have lower incomes because they're just starting their careers.
Credit score
In most states, a lower credit score means higher insurance rates. People with low incomes may be more likely to have lower credit scores.
Insurance history
If you have been driving without insurance because you can't afford it, you'll likely pay more for a policy when you do sign up.
Homeownership status
Many insurance companies offer discounts for homeowners. If you can't afford a home, you might pay higher car insurance rates too.
How to save on insurance if you have a low income
If you struggle to afford car insurance, there are a few strategies you can use to get a cheaper rate.
These include shopping around, using discounts, buying pay-per-mile coverage and only buying the coverage you need.
Shop around
Car insurance companies have different rates, which means shopping around could help you find a cheaper price for the same policy. Get quotes from a handful of companies so you can review your options and pick the best one for your budget.
Use discounts
Most car insurance companies offer discounts to help you save on your rate.
You may be able to save by:
- Being a safe driver
- Being a good student
- Being part of a membership organization
- Buying more than one policy
- Not driving often
- Paying in full
Each car insurance company has its own discounts. Part of shopping around involves checking the discounts you can get and how they affect your rate.
Consider pay-per-mile car insurance
If you don't drive often, consider pay-per-mile car insurance. This type of insurance bases your rate mostly off how much you drive. If you drive less, you pay less.
However, you can't get pay-per-mile coverage everywhere. Not all companies offer it, and those that do only offer it in certain states. Some common pay-per-mile programs include Nationwide SmartMiles, Allstate MileWise and Mile Auto.
Review your coverage
Most car insurance companies offer add-on coverages that can help you personalize your car insurance. While add-ons can be helpful, they also increase your bill. If you're on a tight budget, it can be helpful to review your coverage and make sure you're only paying for what you need.
For example, if you have an older car, it might not make sense to keep comprehensive and collision coverage on your policy. If you remove those coverages, your rate will go down, but you'll also have to pay for the damage to your car if you cause an accident.
Don't cancel your car insurance to save money
You might be tempted to cancel your car insurance to save money. This is a bad idea.
First, the penalties for driving without insurance are severe. If you're caught, you'll probably have your license suspended and will likely have to pay fines.
Even worse, if you cause an accident, you'll have to pay for any damage and injuries you caused. Repair bills and medical costs can add up fast, and without insurance, you have to find a way to pay.
Finally, if you've been driving without insurance, you're going to have a harder time getting a policy when you need it. You'll likely pay higher rates and might even have to use your state's government program for high-risk drivers.
If you need to lower your bill, call your insurance company to make sure you have all the discounts you can get. If that isn't enough, you could consider lowering the amount of coverage you have. It's not an ideal solution, but it's better than canceling your policy entirely.
Frequently asked questions
How do I get car insurance if I can't afford it?
First, check to see if your state has a car insurance program for people with low incomes, or if you can get other financial assistance to help with the bills. If those aren't options, your best bet is to shop around and compare quotes to find the cheapest coverage possible.
What happens if you don’t pay your car insurance?
If you don't pay your car insurance, the coverage will eventually lapse. Most companies offer a grace period for late payments, but if you still don't pay, the company will cancel your policy and might even send your account to collections.
Can you get car insurance with no income?
Income doesn't affect your eligibility for car insurance, so yes, you can get car insurance if you don't have an income. But all car insurance companies require payment, usually at least a one-month payment, to start a policy. Making the payments could be hard if you don't have an income. Shop around, get discounts and build up an emergency fund if you're in this situation.
Methodology
ValuePenguin's car insurance rates are for a 30-year-old man with a 2018 Honda Civic EX.
Minimum coverage quotes are for the state minimum insurance amounts required in each state. All rate data is from Quadrant Information Services, which gets its rates from public insurance company flings. Rates are for comparison purposes only. Your quotes will vary.
ValuePenguin ratings include an analysis of each company's average rates, coverages, discounts, customer service and unique features. Customer service info comes from the National Association of Insurance Commissioners (NAIC) and J.D. Power surveys.
About the Author
Senior Writer
Cate Deventer is a Senior Writer who specializes in health insurance, Medicare, auto and home insurance. She's been a licensed insurance agent since 2011.
She started her insurance career working as a customer service agent for State Farm. She later moved to an independent agency, where she worked with several insurance companies and hundreds of clients. She quoted policies, filed claims and answered insurance questions. In 2021, she pivoted her career and began writing about insurance for Bankrate. She moved to ValuePenguin in 2023 and began writing about health insurance and Medicare.
Cate has a passion for helping readers choose insurance to fit their needs. She enjoys knowing that her research and knowledge help people choose insurance products that make a positive difference in their lives.
How insurance helped Cate
Cate used her health insurance knowledge to navigate a surgery in 2023. Understanding how her policy worked let her focus on recovery instead of worrying about bills.
Expertise
- Health insurance
- Medicare & Medicaid
- Auto insurance
- Home insurance
- Life insurance
Credentials
- Licensed Life, Accident & Health Insurance Agent
- Licensed Property & Casualty Insurance Agent
Referenced by
- CBS
- NBC
- Wall Street Journal
Education
- BA, Theatre, Purdue University
- BA, English, Indiana University
Editorial Note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
