Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our opinions or reviews. Learn how we make money.
Compare car insurance for drivers with limited incomes
Get a deal on car insurance to stay protected on the road.
Compare the cheapest rates on car insurance to fit your limited or fixed budget. Some states also offer insurance programs for drivers who qualify.
What's in this guide?
- How do I get car insurance with a limited income?
- Cheapest car insurance for low-income drivers
- How much does car insurance cost for a low-income driver?
- How can I get car insurance on a budget?
- What discounts should I look for?
- What if I can't afford car insurance?
- What should I watch out for?
- What kind of coverage can I opt out of?
- Bottom line
- Frequently asked questions about limited-income car insurance
How do I get car insurance with a limited income?
Drivers in almost every state are required to carry insurance before getting behind the wheel. But that doesn’t mean you have to get the most expensive insurance.
Dropping collision and comprehensive coverage could save you $500 a year. And making sure you don’t have any extra coverage or high maximums on your policy can shave even more off your annual rate.
Start by looking into limited-income insurance programs in your state. If you live in California, Hawaii or New Jersey, you could qualify for special state-run insurance programs. Each program includes its own requirements, such as a maximum income level, driver age or value of the car driven.
Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
- Broad coverage, including for custom car parts or ridesharing
- Transparent pricing tools that help you buy within budget
- Accident forgiveness on small claims or for staying claim-free
- Stack a variety of discounts for multiple cars, autopay or homeownership
California’s Low-Cost Auto Insurance program
California drivers can get liability insurance at affordable rates.
Coverage: Coverage options include bodily injury liability, property damage liability, uninsured motorist coverage and medical payments coverage. Collision, comprehensive and gap coverage aren’t currently available.
Cost: Average annual premiums range from $247 to $980, depending on driving record and other factors. Drivers can pay in full or pay in seven installments with a 20% deposit and $4 transaction fee.
Eligibility: To qualify, drivers must meet the following requirements and provide their driver’s license, vehicle registration, initial deposit and proof of income.
- Be at least 16 years old with a valid California driver’s license
- Make less than a certain income, starting at $31,225 max for a single person home
- Own a vehicle worth $25,000 or less
Apply: Drivers can apply online at mylowcostauto.com.
Hawaii Aid to Aged, Blind and Disabled program
In Hawaii, this free program serves low-income elderly people, and those who are low-income and blind or disabled by the Social Security Administration’s (SSA) definition.
Coverage: Low-income drivers in Hawaii can get property damage and bodily injury liability coverage. Collision, personal injury and comprehensive coverage aren’t offered currently.
Cost: The Department of Human Services offers this service completely free to qualifying drivers.
Eligibility: This program is available to drivers who receive financial assistance through the Department of Human Services’s Aid to the Aged, Blind and Disabled (AABD) program. To qualify for the AABD, individuals must be at least 65 years old or meet the SSA’s definition of blind or disabled.
The income cap to qualify is 34% of the 2006 federal poverty level. Applicants must also not have more than $2,000 in resources for an individual and $3,000 for a couple.
Apply: Reach out to the Hawaii Department of Human Services to get started.
New Jersey Special Auto Insurance Policy
New Jersey offers medical-only coverage through the Special Auto Insurance Policy (SAIP), which doesn’t replace state-minimum required auto insurance.
Coverage: New Jersey’s SAIP covers $10,000 in death benefits and up to $250,000 in post-accident emergency aid. It doesn’t cover follow-up treatments or damage to your car.
Cost: The NJ low income program costs $365 a year if you pay in two installments or $360 if you pay in full.
Eligibility: Drivers who are eligible for federal Medicaid with hospitalization benefits are eligible for the SAIP. Drivers are also required to have a current driver’s license and registration to qualify.
Apply: Start your application online at the State of New Jersey website. You’ll need to show proof of your Medicaid eligibility when you apply.
Cheapest car insurance for low-income drivers
How much does car insurance cost for a low-income driver?
The average car insurance rate overall is around $1,300 per year. A low-income driver with a good record on the road can expect to stay around this rate or lower.
However, one study by the Consumer Federation of America of five major insurers showed that low-income drivers can sometimes be charged more than other drivers. In some cases, the increase was over 50% more, even for low-income drivers with a perfect driving record.
What income factors affect your insurance premium?
Why the higher rates? The study above merely shows a correlation between a person’s income and insurance premium.
Insurance companies don’t use your income level to determine rates, but they do consider several factors that are indirectly tied to your income.
- Homeowner status. Homeowners are considered more financially stable than renters by insurance companies. Because of this, homeowners often get discounts and rate drops.
- Education. While it’s only a minor difference, more education points to lower premiums, and higher education levels are linked with higher income.
- Location. Insurance rates are specific to your ZIP code. Areas that experience high amounts of property damage or car theft claims may be considered higher risk.
- Credit score. Higher claim levels and amounts have been associated with lower credit scores, according to data from The Federal Trade Commission. Insurers in California, Hawaii and Massachusetts aren’t legally allowed to use your credit score to determine car insurance rates.
- Insurance history. The longer you’ve had insurance in the past, the less you’ll pay. Drivers who couldn’t afford their premiums face increased rates due to any lapses in coverage.
How can I get car insurance on a budget?
Your earnings shouldn’t stop you from saving extra on your premium. You can:
- Shop around. Since some companies may charge low-income drivers more, consider quotes from several insurers to get the best value.
- Keep a squeaky clean driving record. Your safe driving will help keep those rates low, no matter your income. Take a defensive driver course to drop your premium if you don’t have a perfect record.
- Stack the discounts. Keep an eye out for providers that offer multiple discounts you’d qualify for, such as military, safe driver and automatic payments.
- Bundle policies. If you can get your auto and homeowners insurance in one place, you could save big on both. Some insurers also offer auto and life insurance bundle deals.
- Lower coverage when possible. Consider nixing unnecessary coverage add-ons, like better car replacement, towing and original manufacturer parts.
- Use pay-as-you-go insurance. You could opt for a company that offers telematics or pay-per-mile service. This way you’ll only pay for the miles you drive and may get rewarded for safe driving habits. Pay-per-mile works best for those with low annual mileage and a clean driving history.
- If you can, pay out of pocket. In some cases, you might be able to find a deal to get your car fixed instead of filing a claim. It’s a good idea to reconsider making a claim if the damage is fairly inexpensive to fix out of pocket and only involves your vehicle. Otherwise you’ll pay more over time in higher insurance premiums. Ask your mechanic about no interest payment plans.
What discounts should I look for?
- Safe driver
- Good student
- Low mileage
- Online quote
- Switch and save
- Safe car
- Paid in full
What if I can’t afford car insurance?
About 13% of drivers nationwide were uninsured in 2015, according to the Insurance Research Council. Although it may be tempting to forgo insurance if you have a limited income, the payout of getting into an accident without it will likely be greater than the insurance cost.
The costs of an accident when you’re at fault and don’t have insurance aren’t just limited to damages. You could also get penalized by your state for not having insurance.
If you can’t afford insurance, sometimes it’s better to make a drastic change, like selling your car for a used car that’s cheaper to insure, or seeing if you can get around without a car.
Case study: Paying for an accident out of pocket
Brandon lives on a tight budget and decides to forgo car insurance for a few months. During that time, he gets into an accident with property damage to both vehicles that totals $5,000.
In addition, Brandon is penalized by the state and is now required to file an SR-22 with his insurance, which will increase his annual premium by $900. If he can’t pay out of pocket, he might have to take out a loan as well.
If he had purchased insurance, Brandon would have paid $1,500 for the year, plus another $1,000 for his collision deductible. He would have paid $2,500 for coverage and the accident deductible that year — saving him $3,400 on the accident and insurance combined.
What should I watch out for?
For the most part, getting insurance works in a similar way for you as for others. Just keep the following in mind:
- Changes in life situation. Providers offer different rates based on location, driving record for all drivers on the policy and type of vehicle insured. If any of these factors change, consider shopping around to find the best value for your new situation.
- Income qualifications. If you’re opting for a limited-income insurance program, you may need to prove your income with a pay stub, employee ID or other employer-verified document.
- Deductible adjustments. Increasing financial responsibility after an accident may not be ideal for your situation. Make sure you can clear your deductible in case you need to make a claim.
What kind of coverage can I opt out of?
As a driver with a limited income, you could opt for coverage that sticks to the necessities.
- Collision. Optional coverage that keeps you from paying out of pocket for your own vehicle damage in an accident. Consider skipping this coverage if you don’t drive a lot or you drive an older car.
- Underinsured and uninsured motorist. Helpful when at-fault drivers don’t have enough insurance. You could skip this if it’s not required in your state, but it’s typically only a few extra dollars a month to add this to your policy.
- Comprehensive. Optional coverage that protects from extraordinary situations like theft or storm damage. Skip this coverage if your car is older or not worth much.
- Personal injury protection. Assists with your medical bills and income loss after an accident. In states where this isn’t required, you might be able to skip this coverage if you have good health insurance.
- Gap insurance. Optional coverage that pays off your loan or lease if your car is totaled and the claim doesn’t cover the full amount left on your loan or lease. Skip this if you don’t have a car loan or are close to paying your loan off.
Getting a policy that fits all your coverage needs and your budget can be a trick and a half. To keep safe on the roads and some cash in your wallet, compare your car insurance options and make sure you’re not paying more than necessary.
Frequently asked questions about limited-income car insurance
Ask an Expert