How to Get Affordable Car Insurance with a Low Income

Only three states offer state-sponsored car insurance for low-income drivers. But comparison shopping can also help you find affordable low-income car insurance.

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How Income Can Affect Car Insurance Rates

Several factors can affect your auto insurance rates. And while your income isn’t one of those factors, it can certainly have an indirect impact on your insurance rates and make it more challenging to find an affordable policy that offers everything you need.

Some states have programs to help drivers with low incomes afford adequate car insurance coverage. Drivers with low incomes can also save in other ways, including comparison shopping and taking advantage of discounts.

Key Takeaways:

  • California, New Jersey, and Maryland offer state-sponsored programs to help low-income drivers obtain coverage.
  • Low-income drivers in Michigan and Pennsylvania might find affordable coverage through CURE.
  • American Family, Erie Insurance, and SafeAuto offer the most affordable rates for drivers with bad credit.

Car Insurance Programs for Low-Income Drivers

woman using a calculator

Nearly every state requires drivers to carry a minimum amount of liability insurance. This coverage applies when a driver is at fault for an accident that results in bodily injury or property damage to others. Liability insurance minimums vary from state to state — you might need as little as $10,000 per accident of bodily injury coverage in one state but $50,000 in another.

Your state’s minimum coverage requirements can affect your ability to afford car insurance. The higher the requirements, the more expensive the policy will likely be. However, a handful of states have programs that offer subsidized insurance for drivers with low income. Others have programs to help high-risk drivers find coverage, which may benefit other drivers as well.

Low-income car insurance in California

California’s Low Cost Automobile (CLCA) Insurance program is designed to help drivers with low income access affordable car insurance. The program has annual premiums ranging from $232 to $932 (with the potential for discounts) and meets the state’s minimum insurance requirements.

To be eligible for the CLCA Insurance program, drivers must meet the following requirements:

  • Hold a valid California driver’s license
  • Have an income below the thresholds outlined in the table below
  • Have a vehicle worth $25,000 or less
  • Be at least 16 years old
  • Have a good driving record or be a new driver

You must meet the following income requirements to qualify for the CLCA Insurance program:

Household Size Income Cap
1 $36,450
2 $49,300
3 $62,150
4 $75,000
5 $87,850

Drivers who qualify for the program will get the following coverages:

Low-income car insurance in New Jersey

New Jersey’s Special Automobile Insurance Policy (SAIP) helps certain drivers with low income access car insurance coverage. The program is designed to help drivers who are at risk of going uninsured because of their income.

To be eligible for SAIP, you must be currently enrolled in federal Medicaid with hospitalization. The program costs $360 per year if you pay up front or $365 split into two six-month installments.

SAIP coverage is quite limited and only covers emergency treatment after an accident and treatment of serious brain and spinal cord injuries, with a limit of $250,000. It also provides a $10,000 death benefit. The program doesn’t provide:

Additionally, while it’s not a state-sponsored program, New Jersey residents also have access to car insurance through the Citizens United Reciprocal Exchange. CURE doesn’t use discriminatory factors like education, occupation, or credit score when deciding whether to offer someone insurance (or deciding how much to charge).

Low-income car insurance in Maryland

The Maryland Automobile Insurance Fund (now known as Maryland Auto) is a state-sponsored program designed to offer car insurance to drivers who can’t get it through other means. To qualify, you must’ve been rejected by at least two other insurance companies or had your policy canceled or nonrenewed.

To qualify for Maryland Auto, you must meet the following requirements:

  • Be a Maryland resident
  • Hold a valid Maryland driver’s license
  • Have been rejected by at least two insurance companies or have your policy canceled or not renewed
  • Not owe any unpaid premiums to Maryland Auto

It’s important to note that Maryland Auto Insurance isn’t subsidized by the state government in the same way as the other programs we’ve discussed. As a result, while it may be easier to qualify for coverage, your premiums may not actually be any lower.

Low-income car insurance in Pennsylvania and Michigan

Neither Pennsylvania nor Michigan has a state-sponsored insurance program for drivers with low income (or those who can’t get insurance elsewhere). However, like New Jersey, drivers in both states can get insurance coverage through the Citizens United Reciprocal Exchange (CURE), which doesn’t use education, occupation, or credit score when setting insurance rates.

By not relying on those discriminatory rating factors, CURE is able to charge lower rates to drivers who may have a low-income job, who are working to rebuild their credit score, or who haven’t pursued higher education.

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Average Cost of Car Insurance for Low-Income Drivers

Blue car with skyline

Income isn’t an insurance rating factor, meaning you don’t have to worry about being denied insurance or charged a higher premium just for having a low income. However, it can have an indirect effect since it’s related to other factors, including credit score.

Insurers generally charge higher premiums to drivers with poor credit scores. Credit score is considered a risk indicator because people with poor credit may be more likely to file insurance claims or not pay their premiums. However, four states — California, Hawaii, Maryland, and Massachusetts — ban insurance companies from using credit scores as a rating factor.

The table below shows the average insurance rates from several top insurers for drivers with poor credit scores. Keep in mind that rates may be higher for drivers with other risk factors as well.

Insurance Company Average Monthly Quote
American Family $155
Erie $155
SafeAuto $158
Shelter $161
Direct Auto $165

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Factors That Affect Car Insurance Costs

White woman with red hair and blue shirt driving

Insurance companies use their own unique rating systems when determining your auto insurance rates. These systems account for several different factors, including driving record, age, gender, credit score, and more. Your unique combination of factors will determine how much you pay for car insurance.

“The greatest influence [on your] premium comes from the insurance score,” says Alaina Hixson, director of sales and operations with the Nashville-based insurance agency The Churchill Group. “For example, a middle-aged, married homeowner with a good credit score living in a community with low crime, minimal traffic, and no prior claims will qualify for the best rates.”

Here are some of the factors insurance companies consider:

  • Age: Young drivers tend to pay more for insurance because of a lack of driving experience and an increased risk of filing claims.
  • Gender: Women have been shown to get into fewer car accidents, have fewer DUIs, and generally engage in fewer high-risk driving activities. As a result, women often pay less for car insurance.
  • Driving record: Your driving record is one of the most important factors when it comes to your insurance rates. The better your driving record, the lower your rates. Meanwhile, violations — such as accidents, tickets, or DUIs — can cause your premiums to spike.
  • Credit score: As we’ve already discussed, insurance companies associate credit scores with risk and charge higher premiums to drivers with poor credit scores.
  • Location: You could pay more for insurance if you live in an area with a high rate of uninsured drivers, accidents, vehicle theft, or vandalism.
  • Education: Generally speaking, more educated drivers will pay less for car insurance. Unfortunately, this means drivers with less education — and often lower incomes — tend to pay more.
  • Housing: While your type of housing may not directly affect your insurance premiums, owning your own home may qualify you for insurance discounts.
  • Vehicle: Your vehicle — including its make, model, and age — affects your insurance premiums. You could pay more if your vehicle is more expensive to fix or has a lower safety rating.
  • Insurance record: Insurance companies may charge more to drivers with a coverage gap, meaning a period of driving without insurance.

“The most effective way low-income drivers can save money on insurance is by having a clean driving record — no tickets, accidents, or claims — as these factors have the greatest impact on [your] rate,” says Hixson.

Other Ways Low-Income Drivers Can Save on Car Insurance

traffic queue

In addition to the factors listed above, here are some additional ways that low-income drivers can save on their monthly premiums.

Pay-per-mile car insurance

Do you drive a relatively low number of miles? If so, you could save money by switching to pay-per-mile car insurance. Unlike regular insurance, which charges you a set premium no matter what, pay-per-mile coverage charges you based on how much you drive each month.

With pay-per-mile insurance, you’ll usually pay a set daily rate. You’ll also pay a certain amount for each mile you drive. Because pay-per-mile and usage-based insurance companies often track your driving with an app or Bluetooth device, you might be able to save even more money if you practice safe driving habits.

Temporary car insurance

Typical insurance policies usually have durations of either six months or one year. But you might only need coverage for a short period if you’re borrowing a car, only commute seasonally, or for any other reason. In those cases, you can find temporary or short-term car insurance from companies like Hugo.

Temporary car insurance policies can provide coverage for as little as one day and up to one month. And because you’re only buying insurance for a short period, you don’t have to worry about an annual or biannual premium.

Discounts for affordable car insurance

Discounts are an excellent way for drivers of any income to save money on car insurance. Discounts are available for a variety of reasons, including:

Coverage options for affordable car insurance

Another way to save money on car insurance is to adjust your coverage. The higher your coverage limits, the more you can expect to pay for your premiums. When it comes to reducing your coverage, you have two options: reducing your coverage amount or eliminating certain coverages altogether.

Keep in mind that eliminating coverages isn’t always the most cost-effective move. For example, if you get rid of your collision coverage and later get in an accident and your car is totaled, you’ll have to replace it out of pocket. That could end up being far more expensive than paying for collision coverage.

Deductible options for affordable car insurance

You can reduce your car insurance premiums by increasing your deductible. The deductible is the amount you must pay out of pocket before your insurance coverage applies. A higher deductible means a lower cost for your insurer.

The most popular deductible amount is $500, but you can save money on your premiums by increasing your deductible to $1,000 or more. Just be sure you can afford to pay the deductible if you get in an accident.

Low-Income Auto Insurance FAQs

Want to learn more about affordable car insurance options if you’re on a low income? Below are some answers to the most commonly asked questions about low-income car insurance.

How can you qualify for state low-income car insurance?

Each state has different eligibility requirements for low-income car insurance. For example, California’s program has an income cap, and New Jersey’s requires drivers to be enrolled in Medicaid with hospitalization. Maryland’s program requires drivers to be rejected for insurance elsewhere or have their policies canceled or not renewed.

What car insurance companies have the most affordable rates?

The most affordable car insurance company depends on several factors, including your unique driver profile and where you live. The best way to find the most affordable insurance is to use a comparison site to shop with multiple companies at once.

What happens if your car insurance lapses?

A car insurance lapse is a gap between insurance coverages. It could be the result of failing to pay your premium, not renewing your policy, or another reason. Because nearly every state requires insurance coverage, having a lapse could result in fines or other penalties. It’ll also cause your insurance rates to go up significantly once you decide to get coverage again.

What’s the cheapest coverage available?

The cheapest insurance option is to purchase only your state’s minimum coverage, which varies from state to state. However, choosing the lowest allowable coverage could result in greater out-of-pocket costs if your car is totaled or you cause injury or damage that exceeds your coverage limits.


Data scientists at analyzed more than 50 million real-time auto insurance rates from more than 75 partner insurance providers in order to compile the quotes and statistics seen in this article.’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information. All of the quotes listed in this article have been gathered from a combination of real quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. uses these observations to provide drivers with insight into how auto insurance companies determine their premiums.


  1. Insurance Information Institute, “Automobile Financial Responsibility Laws By State,” Accessed June 19, 2023
  2. California’s Low Cost Auto Insurance, “Who Qualifies?,” Accessed June 19, 2023
  3. New Jersey Department of Banking & Insurance “Special Automobile Insurance Policy (SAIP),” Accessed June 19, 2023
  4. Maryland Manual On-line, “Maryland Automobile Insurance Fund,” Accessed June 19, 2023
  5. National Conference of State Legislatures, “States Consider Limits on Insurers’ Use of Consumer Credit Info,” Accessed June 19, 2023

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Find Cheaper Car Insurance for Low Income Drivers