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Car insurance for low-income drivers: everything you need to know

Car insurance safeguards your property from theft, accidents and mechanical breakdowns. But safety has its price, and affordable auto insurance for low-income families and individuals isn't always easy to find. Our data shows people who earn between $10,000 and $19,000 per year pay nearly as much as those who earn more than $200,000 per year. Based on the necessity and expense of car insurance, it's not hard to understand why people are looking for car insurance they can afford on a low income. This is where it gets tricky.

Policies built specifically for low-income families are a bit of a gray area for insurance companies because your income isn’t technically a factor in setting your rates. Insurers use your credit score, education level, homeownership status, insurance history and ZIP code (among other factors) to determine the insurance rate reflected in your quote— each of which could be correlated with your income level.

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Key takeaways
  • Income is not a factor in your car insurance rates
  • Some states offer assistance programs
  • Telematics may be a good option for those who don't drive often
  • Shopping for multiple quotes is the best way to find cheaper insurance

How to find low-income car insurance

If you’re on a tight budget, finding cheap car insurance is important. One of the best ways to find affordable auto insurance is to compare rates from multiple companies.

Insurance companies assess your driving profile and their own loss/revenue ratio in order to profile a premium. This means that your rate with one company isn't the same for all companies. Below are some average rates based on an average driver profile in our methodology. As you can see, rates vary substantially depending on which carrier you choose.

One of the best ways to find affordable auto insurance is to compare rates from multiple companies.

Insurance Company 6-Month Premium Monthly Premium
Allstate $1,019 $170
Farmers $788 $131
GEICO $562 $94
Liberty Mutual $863 $144
Nationwide $541 $90
Progressive $627 $104
State Farm $646 $108
USAA $636 $106

ZEBRA TIP: Buy an older vehicle

Buy an older vehicle to keep your insurance costs down. Newer vehicles cost more than used cars, meaning they also carry a higher insurance bill. If your car has a value of less than $4,000, you might consider dropping "full coverage" (comprehensive and collision). Find more information in our guide to the cheapest cars to insure, including average costs. 

Government insurance programs for low-income drivers

Because household income isn't directly used to determine monthly rates, most companies don't create special programs for low-income families. But there are state-operated programs and companies that are specifically designed to help low-income drivers find more affordable car insurance.


California has a program called California’s Low-Cost Automobile Insurance Program, or CLCA, and is designed to provide low-cost insurance rates for eligible drivers.

What are the requirements for CLCA eligibility?
  • Combined household income, based on the number of people:
    • 1 = $30,150
    • 2 = $40,600
    • 3 = $51,050
    • 4 = $60,500
  • A good driving record
  • No at-fault accidents in the past three years
  • Must be at least 19 years old
  • Must own a valid driver’s license
  • Must own a vehicle that is valued at less than $25,000
  • And, naturally, a California resident

If you meet the above qualifications and decide to opt to participate in CLCA, your insurance limits for bodily injury liability and property damage liability would actually be lower than the state limits. As participants in this program are exempt from state requirements, your limits would be $10,000 for bodily injury or death per person, $20,000 total for bodily injury or death, and $3,000 total for property damage. The amount of the premium ranges based on your insurance history, your county and your age.



Hawaii provides additional coverage for some of its residents through the state’s Aid to Aged, Blind, and Disabled program (AABD). This program, which provides free auto insurance for those who qualify, has a few requirements:

  • You are blind
  • You have suffered from a physical or mental disability for at least 12 months which causes you to be unable to work
  • You live with and take care of someone who receives AABD benefits
  • You have a terminal condition that prevents you from working
  • Your Social Security or Supplemental Security Income doesn’t provide you with enough money
How to get coverage under Hawaii's AABD program:

Because this is a government program, you would need to speak with the Hawaiian Department of Human Services in order to receive any benefits from AABD.


New Jersey

New Jersey’s plan, Special Automobile Insurance Policy (SAIP), provides only the medical coverage portion of your auto insurance after a car accident. Eligibility is dependent upon you already being qualified for Federal Medicaid with Hospitalization, which an insurance agent can determine from your Medicaid ID card.

How much does SAIP cost and what are the requirements?

SAIP costs $365 per year. This coverage is also contingent upon the annual renewal of your Medicaid benefits. For example, if your Medicaid benefits were to lapse mid-year, your SAIP benefits would continue until the next renewal.

What does SAIP cover?

This coverage pays for emergency medical treatment immediately following an accident, including the treatment of serious brain and spinal injuries up at $250,000. In the event of death, a $10,000 benefit is available.

What doesn’t SAIP cover?

As stated, this policy is for medical coverage only — so things like comprehensive or collision coverage aren't provided.

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Non-state-affiliated programs for low-income car insurance


CURE, or Citizens United Reciprocal Exchange, advertises themselves as an insurance provider in New Jersey and Pennsylvania that only uses your driving record as a factor for your rate. It works pretty similarly to other insurance providers in terms of coverage options, discounts and payment plans.

The Maryland Automobile Insurance Fund

The Maryland Automobile Insurance Fund is a government-created program in the state of Maryland specifically designed to provide liability insurance for residents who are unable to receive auto insurance on the open market. Independent from the actual state government, they cater to people who have been denied coverage because of poor or no credit, lapses in insurance or a poor driving record.

Other ways to find auto insurance with a lower income

Insurance companies can’t legally use your income to determine your rate, but they may use other metrics that are often — but not always — correlated to your income level. Car insurance data suggests that people with higher incomes file fewer claims, but that could be because they simply are able to pay for damages out of pocket rather than filing a claim.

Because these factors are not necessarily within your control, here are some actionable ways to save on car insurance.

Pay for claims out of pocket

Use your car insurance only if the value of damage in an accident exceeds your reasonable ability to pay for it. Unless you have some form of accident forgiveness in your car insurance policy, your company will raise your rate for three to five years after an incident. See below how much this would impact your rate.

At-Fault Accident Surcharge Annual Premium Monthly Premium
No Violation $1,483 $124
After Violation $2,153 $179
2nd Year after Charge $2,823 $235
3rd Year after Charge $3,493 $291


Over the course of three years, this claim could cost you over $2,000 in surcharges. Adding in a $500 deductible, your total amount paid for an at-fault accident is over $2,500. If you have an accident and the out-of-pocket costs are less than $2,500, it makes more financial sense to pay for the damages yourself. Below is a helpful guideline to do so.

  • Get a cost estimate for the repairs.
  • Use The Zebra's State of Insurance study to see how much an at-fault accident raised rates in your state, and consider that value over the course of three years.
  • Compare the value of the out-of-pocket repairs to the rate increase over three years plus your deductible. If it's cheaper to file a claim, go for it.

Consider usage-based insurance companies

Usage-based auto insurance policies are designed to create your premium based on how you drive rather than who you are. In theory, if you're a safe driver, you can save. Below are some estimates from popular insurance companies. If you're interested in learning more, see our guide to telematics insurance options.

Telematics Program Estimated Savings
Progressive Snapshot Average of $130
Allstate Drivewise Average of 10-25%
State Farm Drive Safe & Save Up to 15%
Esurance DriveSense Varies
Nationwide SmartRide
Up to 40%
Liberty Mutual RightTrack
Average of 5-30%
GEICO DriveEasy

In addition to the companies mentioned above, consider Root and Metromile. While not available in every state, these companies might offer some savings.

Be conservative with your coverage

If your vehicle is worth less than $4,000, you should consider dropping collision and comprehensive coverage from your insurance policy. These coverages are designed to protect the physical integrity of your vehicle. But if the vehicle isn’t worth much to begin with, you might be paying for coverage you do not need.

If you do decide to drop comprehensive and collision, consider if underinsured or uninsured motorist property damage is right for you. This will protect your vehicle if it’s damaged by another driver with any insurance or not enough to repair or replace it. Bear in mind, you still have to keep your state’s liability coverage by law.

ZEBRA TIP: Get higher liability limits if you can

While it can be tempting to just carry the lowest liability limits required by your state, try to increase this level to as much as you can comfortably afford. This way, your coverage is more likely to fully cover any damages that you may cause in an accident. We generally recommend limits of at least 50/100/50 to be safe.


Avoid letting your coverage lapse

Even small gaps in your insurance history can increase your rates when trying to find a new policy. If you are going to be without a vehicle temporarily, consider purchasing a non-owners policy to keep continuous coverage. That way, when you are ready to get insurance again, your rates will be more reasonable.

Double-check for discounts

Although some of the following discounts are automatically added, you will still want to comb through your insurance policy to ensure you’re getting the best auto insurance rates. Here are some of the most common car insurance discounts:

Multi-policy discount

This discount refers to having two types of insurance policies under one insurance company. This is often known as bundling. Common policies are home/auto or renters/auto. The discounts affect both your policies, typically.

Average Premium by Bundling.png
Defensive driver discount

If you’ve taken a defensive driving course, your insurance company may reward you with a discount on your premium. Learn more about what the big companies will offer you for your good driving record.

Equipment discount

If your vehicle comes with an anti-theft device or services like LoJack, your insurance company usually provides a discount.

Anti-Theft Device 6-Month Premium % Difference
None $741  
Audible Alarm $739 -0.38%
Active Disabling Device $738 -0.41%
Tracking Device $736 -0.7%
Passive Disabling Device $736 -0.75%


Good driver discount

This discount is typically added automatically to your policy and tends to be beneficial. Just like its name implies, this discount refers to having a safe driving record.

Multi-car discount

Like a multi-policy discount, a multi-car discount refers to having more than one vehicle with a single insurance company.

Preferred payment discount

This method refers to the manner you choose to pay your insurance premiums. While it varies by company, you can usually receive a discount if you pay your premium upfront, pay through your bank account or opt for paperless billing.

Electronic Funds Transfer 6-Month Premium % Savings
No $742
Yes $736 -1.43%
Advance payment

If you pay your insurer your premium ahead of its policy inception date, a lot of companies will give you a discount on your premium.

Advanced Purchases 6-Month Premium % Savings
0 Days $742
7 Days $716 -3.4%
10 Days $711 -4.15%
Profession/affinity discount

Statistically, some occupations like teachers, physicians or police officers are less likely to file a claim. Additionally, many companies like GEICO and Nationwide offer discounts to certain groups or organizations. Because of this, some insurers return the savings back to you.

For more information, see our guide to insurance affinity discounts.

Good student discount

Most companies will require the student on your policy to have a GPA above 3.0 in order to receive this discount. You can provide the insurance companies with a transcript or report card for each policy period as proof.

For more information, see our guide to student insurance discounts.

Drive safely

It might be a fairly obvious suggestion, but if you're already struggling to pay for car insurance you really need to take care while driving. A poor driving record is a major red flag to any insurance company. Depending on your violation type, you could end up paying surcharges on your premiums for between three and ten years.

Compare companies and find the best policy for your budget.

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How your annual income might impact your auto insurance rates

There are a few things insurance companies use to set insurance rates that could be indirectly tied to a driver's income.

Your credit score

While some states consider the use of a credit score to determine your insurance rate discriminatory, it’s still a pretty common practice. This is because data from the Federal Trade Commission shows drivers with low credit scores are more likely to file a claim than drivers with high credit scores.

Moreover, when they do file a claim it tends to be more expensive. As you can see from the data below, drivers with poor credit pay $783 more per six-month policy than drivers with excellent credit. Per month, that’s a $130 difference! Raising your credit score can save you around 18% on your auto insurance.

credit score and insurance
Average Car Insurance Rates by Credit Score.png

The Zebra's resources for drivers with poor credit

While credit is a major rating factor in most states, there are definitely ways to find affordable car insurance coverage. The Zebra has compiled resources with information on car insurance with bad credit or no credit history, including car insurance company rates.


Your education

Statistically speaking, the more education you have received, the more likely your insurance rate is going to decrease. Bear in mind, the difference is quite small — the six-month premium difference between a driver without a high-school degree vs. a Ph.D. is $24.

Education Level

6-Month Premium

None $763
High School $754
Bachelors $741
Masters $739
PhD $739

Your insurance history

This is a major rating factor for two reasons. Firstly, car insurance companies see drivers who are licensed but have no insurance history as a major risk. Second, car insurance companies see a correlation between low liability limits and filing claims. As you can see below, the difference between no insurance history and five years of high-level coverage is $167 annually.

Learn more about finding car insurance with no insurance history.

Insurance History

6-Month Premium

None $819
6 Months $768
1 Year $763
3 Years $747
5 Years $735
insurance history

ZEBRA TIP: Be careful with non-standard carriers

If you are looking for rock-bottom car insurance prices, it's likely that you'll encounter non-standard carriers. A non-standard car insurance company focuses on customers who typically have a high number of accidents or otherwise struggle to find a policy. While coverage may be cheaper, you aren't likely to have as many coverage options and customer service may be lacking. Bottom line: do your research to avoid companies with poor customer service ratings.

Your homeownership status

Homeowners, regardless of whether they bundle home insurance with their car insurance, typically pay less for car insurance. Insurance companies see homeowners as more financially stable and historical data shows they file fewer claims than renters. If you're a low-income individual or family, owning a home might not be within your budget. As such, you might be paying slightly more for car insurance because of it.

Homeowner Status

6-Month Premium

Renter $741
Condo owner $726
Homeowner $726

Learn more about how to save money on auto insurance via home-and-auto bundling.

home ownership

Your location

Your insurance rate depends on your ZIP code. Insurers use a variety of factors such as the number of claims in an area, road conditions, and population size to help determine rates in your zip code. Because your insurance company assumes a portion of financial responsibility, living in an area with a high rate of car theft or property damage claims can be seen as a risky investment to an insurance company.

Learn more about car insurance rates by state or by city.

Low income car insurance: FAQs

Below you'll find answers to some of the most common questions regarding auto insurance for low-income drivers.

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Does income affect your car insurance?

No, your income has no bearing on how much you pay for car insurance. Depending on your state, it's far more likely that your rates are determined by factors such as credit history, driving record and your address.

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How do I get car insurance if I can't afford it?

Your first option is to see if your state has a government-backed option that is more affordable. California, New Jersey, and Hawaii all have programs that can assist low-income drivers in getting coverage. Otherwise, compare quotes from a number of companies to see if there are more affordable options out there. Insurance comparison sites such as The Zebra allow you to do this all in one place. 

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What happens if you don’t pay your car insurance?

Customers who don't pay their car insurance run the risk of being dropped by their insurer. The grace period allowed for late payments will vary widely by company, and you should never assume that you are alright to be a few days late. If you know that you won't be able to make your payment, contact your insurance company as soon as possible. They may be able to work something out with you so that you can avoid penalties or having your coverage dropped.

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Can you get car insurance with no income?

Income is not a factor in determining how much you pay for insurance. Still, if an insurance company feels that you may not be able to meet your premium payments, they may deny coverage – all companies will require a down payment for coverage to begin. While this is often called a "deposit," it is actually just your first month's premium (plus some additional fees for onboarding costs usually). In short, while you may be able to get coverage with no income, keeping it may prove more difficult without a reliable income.

Find an affordable policy today!

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Ava Lynch photo
Ava LynchSenior Analyst

Ava joined The Zebra as a writer and licensed insurance agent in 2016. She now works as a senior analyst, providing insights and data analysis as one of The Zebra's property and casualty insurance experts.

Ava’s insurance career began as an agent with Farmers Insurance. Over the years, she has become an authority in all things property and casualty insurance, helping her to write informative guides for shoppers.

Ava’s work has been cited in publications such as InvestopediaThe BalanceMoney.comLiberty Mutual, U.S. News & World Report, GasBuddy, Car and Driver and Yahoo! Finance.

About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
  • The Zebra’s insurance content is not subject to review or alteration by insurance companies or partners.
  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.