Budget Auto Insurance

When you budget auto insurance, you can find cost-efficient ways to save money on insurance costs. Financing a new or used automobile requires you to have additional auto insurance coverage, so it may be challenging to find the cheapest rates. If you own the vehicle or pay for the automobile outright, you will only need to meet auto insurance minimum requirements. Ready to buy auto insurance? Start budgeting for a lower rate by comparing multiple auto insurance companies and shopping around.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: May 28, 2021

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It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

What You Should Know
  • The national average for auto insurance is $46 per month.
  • Averages for auto insurance vary state by state. Some states even offer government auto insurance assistance.
  • The higher the deductible, the lower the premium.

Budgeting auto insurance is one of the essential skills needed to lower your cost of living.

If you’re on a strict budget, take advantage of your auto insurance options and select what you need. Once you’re in a position of understanding auto insurance, you can save hundreds per year.

But how much can you save when you budget car insurance? The national average for auto insurance is $46 per month. However, your rates could be more expensive because of several factors that determine auto insurance.

Continue reading to learn more about how to budget for lower auto insurance costs and compare auto insurance rates based on major factors that determine insurance policy costs.

Compare and budget auto insurance right now by entering your ZIP code into the FREE comparison tool above and find affordable auto insurance quotes now.

Can I save money on auto insurance by enrolling in liability-only coverage?

According to the National Association of Insurance Commissioners (NAIC), the national average cost of minimum coverage is $46 per month.

However, the average is different for each state because coverage limits vary. Nevertheless, it’s easier on your finances if you add liability-only auto insurance to your budget.

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Is liability-only auto insurance enough coverage?

Each state requires that every driver has a minimum level of coverage or liability auto insurance. Minimum coverage limits and coverage types vary by state.

What does that mean? Coverage limits are the maximum amount in dollars that an auto insurer will cover if you’re in an accident.

For example, the standard coverage limits are $25,000 for bodily injury of one person per accident, $50,000 for bodily injury of multiple people per accident, and $25,000 for property damage.

The parts that make up liability coverage limits are bodily injury liability (BI) and property damage (PD) liability.

In some states, personal injury protection (PIP) and uninsured/underinsured motorist insurance (UIM/UM) are automatically part of the minimum car insurance requirements.

To see what your state requires, check out the list of auto insurance requirements below.

Minimum Liability Auto Insurance Requirements by State
StatesAuto Insurance RequirementsMinimum Auto Insurance Liability Limits
AlabamaBI & PD Liab25/50/25
AlaskaBI & PD Liab50/100/25
ArizonaBI & PD Liab15/30/10
ArkansasBI & PD Liab, PIP25/50/25
CaliforniaBI & PD Liab15/30/5
ColoradoBI & PD Liab25/50/15
ConnecticutBI & PD Liab, UM, UIM25/50/20
DelawareBI & PD Liab, PIP25/50/10
District of ColumbiaBI & PD Liab, UM25/50/10
FloridaPD Liab, PIP10/20/10
GeorgiaBI & PD Liab25/50/25
HawaiiBI & PD Liab, PIP20/40/10
IdahoBI & PD Liab25/50/15
IllinoisBI & PD Liab, UM, UIM25/50/20
IndianaBI & PD Liab25/50/25
IowaBI & PD Liab20/40/15
KansasBI & PD Liab, PIP25/50/25
KentuckyBI & PD Liab, PIP, UM, UIM25/50/25
LouisianaBI & PD Liab15/30/25
MaineBI & PD Liab, UM, UIM, Medpay50/100/25
MarylandBI & PD Liab, PIP, UM, UIM30/60/15
MassachusettsBI & PD Liab, PIP20/40/5
MichiganBI & PD Liab, PIP20/40/10
MinnesotaBI & PD Liab, PIP, UM, UIM30/60/10
MississipiBI & PD Liab25/50/25
MissouriBI & PD Liab, UM25/50/25
MontanaBI & PD Liab25/50/20
NebraskaBI & PD Liab, UM, UIM25/50/25
NevadaBI & PD Liab25/50/20
New HampshireFR only25/50/25
New JerseyBI & PD Liab, PIP, UM, UIM15/30/5
New MexicoBI & PD Liab25/50/10
New YorkBI & PD Liab, PIP, UM, UIM25/50/10
North CarolinaBI & PD Liab, UM, UIM30/60/25
North DakotaBI & PD Liab, PIP, UM, UIM25/50/25
OhioBI & PD Liab25/50/25
OklahomaBI & PD Liab25/50/25
OregonBI & PD Liab, PIP, UM, UIM25/50/20
PennsylvaniaBI & PD Liab, PIP15/30/5
Rhode IslandBI & PD Liab25/50/25
South CarolinaBI & PD Liab, UM, UIM25/50/25
South DakotaBI & PD Liab, UM, UIM25/50/25
TennesseeBI & PD Liab25/50/15
TexasBI & PD Liab, PIP30/60/25
UtahBI & PD Liab, PIP25/65/15
VermontBI & PD Liab, UM, UIM25/50/10
VirginiaBI & PD Liab, UM, UIM25/50/20
WashingtonBI & PD Liab25/50/10
West VirginiaBI & PD Liab, UM, UIM25/50/25
WisconsinBI & PD Liab, UM, Medpay25/50/10
WyomingBI & PD Liab25/50/20
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Why is all of this important? This shows you what liability-only auto insurance costs per month. If you think you need more on your coverage limits, you could pay more for auto insurance. Upgrade your coverage limits if it’s in your budget for auto insurance.

How do I compare auto insurance companies to budget cost?

Auto insurance shoppers often assume that all companies offer similar auto insurance rates and that all auto insurers will charge the same premiums.

The reality is that auto insurance companies provide various different packages, services, and unique features. Most auto insurance companies offer budget policies. But don’t expect them to tell you upfront about them if you’re buying from an agent.

Online auto insurance quote services, like ours, allow you to customize your coverage down to the smallest details. These are excellent services for those looking to budget auto insurance because you pay only for what you need.

Bonus features and services are omitted and only added to your policy upon request.

By comparing quotes with us, you will be given rates from the leading auto insurers. Check out the average monthly rates of the best auto insurance companies.

Average Monthly Liability-Only Auto Insurance Rates by Company
CompanyAverage Monthly Liability-Only Auto Insurance Rates
Erie$25
Country Financial$34
National General$35
USAA$35
Amica$38
GEICO$40
Safeco$40
Auto-Owners$43
Kemper$44
CSAA$45
The Hartford$45
American Family$50
Automobile Club Group$51
State Farm$52
Auto Club of SoCal$53
Mercury$53
NJM$54
Nationwide$57
21st Century$65
Allstate$65
Progressive$65
Travelers$68
MetLife$69
Liberty Mutual$75
Farmers$77
The Hanover$116
Esurance$135
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According to data from our budget auto insurance reviews, the cheapest auto insurance company available is Erie. However, The Hanover is the most expensive on the list.

If you were thinking of going with USAA, you must be in the U.S. Armed Forces. USAA insurance policies are only available to U.S. military service members and their immediate families.

Can I save money with higher deductibles?

If you’re already using an online quote comparison tool, you’re going to save a bunch on your auto insurance. But the savings don’t stop there. Raising your deductible is yet another fast and simple way to cut down your auto insurance costs significantly.

Watch this video to learn more about auto insurance deductibles.

The higher your deductible, the lower your premium will be. Plain and simple. But before you run off to an insurance company and sign a policy with a $1,000 deductible, you have to be sure you can afford the $1,000 in the case of a collision or other mishap.

Learn more about how high a deductible you should set for yourself for maximum savings by checking out our article here.

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Should I remove collision and comprehensive coverage to get the cheapest budget auto insurance?

Every state except New Hampshire requires drivers to have auto insurance. According to New Hampshire’s Department of Motor Vehicles, there’s no mandatory auto insurance law in the state.

However, states don’t require you to have the maximum level of auto insurance. Instead, states only require you to have basic liability coverage. Basic liability coverage will provide compensation for the damages you cause while driving.

For example, if you get into a car accident and you’re at fault, your liability insurance will cover the other driver’s medical expenses as well as the costs of repairing the other driver’s vehicle or any other property you damage.

What liability auto coverage does not cover is damage to your own vehicle. To cover the cost of repairing your own car, you’ll need collision coverage.

Liability coverage also doesn’t cover other circumstances like hail damage, vehicle theft, or vandalism to your vehicle. These things are covered under comprehensive coverage.

Why am I telling you all of this in an article about budget auto insurance? Well, in many cases, you can save a significant amount of money on auto insurance by dropping collision and comprehensive coverage.

If you just want a barebones insurance policy, you can lower your auto insurance rates significantly. You might end up paying only $50 to $75 per month for auto insurance or even less.

Which states have the best budget auto insurance?

The United States is a diverse country in terms of geography and auto insurance laws. That’s why auto insurance prices vary widely across America.

Drivers in some of the more expensive states pay nearly twice as much as drivers in some states with the cheapest auto insurance.

Let’s look at the estimated monthly liability coverage cost for each state. You can type in your state for a quick search.

Average Monthly Liability Auto Insurance Rates
StatesAverage Monthly Liability Auto Insurance Rates
North Dakota$25
Iowa$26
South Dakota$26
Wyoming$28
Maine$29
North Carolina$30
Vermont$30
Kansas$30
Idaho$31
Nebraska$31
Wisconsin$32
Indiana$33
Montana$33
Ohio$34
New Hampshire$34
Arkansas$34
Alabama$35
Virginia$36
Tennessee$36
Missouri$36
Minnesota$38
Illinois$38
Hawaii$39
Mississippi$39
Oklahoma$39
Pennsylvania$42
California$42
West Virginia$42
Utah$43
New Mexico$43
Kentucky$45
Arizona$45
Colorado$45
South Carolina$46
Countrywide$46
Texas$46
Alaska$47
Georgia$50
Oregon$51
Washington$51
Massachusetts$51
Maryland$53
District of Columbia$55
Connecticut$57
Nevada$60
Rhode Island$66
Delaware$67
Michigan$68
Louisiana$68
New York$69
Florida$74
New Jersey$75
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North Dakota and Iowa have the cheapest liability auto insurance rates. However, New Jersey and Florida have the most expensive rates.

You might think it’s difficult to get budget auto insurance. That’s not true! Drivers in these states can access the same discounts and low-budget options as drivers in other states.

Consider raising your deductible or dropping comprehensive coverage from your plan to save a significant amount of money on auto insurance. If you’d like to learn more, read our article how high of a deductible should I get with my auto insurance policy?

Which factors lower auto insurance rates and increase your budget?

There are specific factors that can lower your auto insurance premiums. Under the right circumstances, you can pay significantly less for liability and your full coverage auto insurance policy.

Age, poor credit history, location, and driving record are the most significant factors determining how much you pay for auto insurance per year. Of course, there are more factors such as education level, insurance history, and more. Let’s go through each factor.

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How does your age affect your rates?

Your age can determine your experience as a driver. Auto insurance companies take this into consideration when they issue rates. Compare auto insurance rates by age group to see which is the most expensive.

Average Monthly Full Coverage Auto Insurance Rates by Age Range
Age RangeAverage Monthly Full Coverage Auto Insurance Rates
16–17 $508
18–19 $361
20–24$196
25–29$134
30–39$121
40–49$116
50–59$108
60–69$110
70–79$130
80+$237
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The younger you are, the more you’ll pay for auto insurance. It’s important to budget auto insurance at any age. Liability-only auto insurance may be affordable for older drivers. Younger drivers will have to deal with higher prices much more frequently.

How does credit history affect your rates?

In some areas in the United States, auto insurance rates can’t be determined by bad credit scores. For the states that issue rates based on credit-based insurance scores, here’s a general overview of what you can expect.

Average Monthly Auto Insurance Rates by Credit History
Credit History SummaryAverage Monthly Auto Insurance Rates
Good Credit History$313
Fair Credit History$330
Poor Credit History$345
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Good credit history can save you hundreds on auto insurance per year. Why? Auto insurance companies say there’s a correlation between credit history and risk. The better your credit, the less likely you’ll file a claim.

How does driving record affect your rates?

The most significant factor of all is your driving record. There’s no better way to determine auto insurance rates than by looking at your driving record. Review these everyday situations to see how much you could pay for auto insurance.

Average Monthly Auto Insurance Rates by Driving Record
Driving Record SummaryAverage Monthly Auto Insurance Rates by Driving Record
Clean Driving Record$260
With One Speeding Violation$306
With One Accident$342
With One DUI Conviction$410
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Accidents and DUI convictions carry the most expensive increases. Clean driving records have the cheapest auto insurance rates. When you combine a clean driving record with other factors that work in your favor, your auto insurance budget will increase.

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Is it easy to find a budget auto insurance company on the internet?

Today, it’s easier than ever to find budget insurance coverage online. On our website, all you need to get started is your ZIP code.

Type your five-digit ZIP code into the form at the top of this page. You’ll immediately see a list of 10 or more auto insurers serving your area.

You can individually request a quote from each insurance carrier in minutes without penalty. Just fill out a basic application online, then see how much money you can save.

Thanks to the internet, you can also see how different things affect the price of insurance. You can go back and adjust your application, for example, and see how it changes the final estimated premium.

Which auto insurance discounts and savings increase budget?

Listed above are just a few easy ways to save, but there are dozens more. In fact, in our article titled “15 ways to save on your auto insurance“, we list several more ways for you to save on your insurance, including:

  1. Move to a cheaper place to insure your vehicle
  2. Join organizations and clubs that offer discounts
  3. Etch your Vehicle Identification Number (VIN) number on your window
  4. Change your job to something more “low risk”
  5. Monitor yourself or your child with a camera in your car
  6. Stay home and don’t drive as much
  7. Take driver’s education classes to improve your driving skills
  8. Get a cheaper vehicle to insure
  9. Ride your bike more and drive less
  10. Get environmentally friendly by “going green”

For the rest of the ways to save on auto insurance and get “budget” rates, explore our site! We have a plethora of articles on everything insurance-related you can imagine.

What’s the bottom line on budget auto insurance?

In the meantime, why not get a budget auto insurance quote from us now? Our quote comparison tool will automatically apply discounts to your rates.

It requires little effort on your part to take advantage of them. The discounts you qualify for will automatically be deducted from your auto insurance rates.

For affordable auto insurance, enter your ZIP code below to find the best budget for cheap auto insurance. Be sure to fill out your information as accurately as possible to see the best competitive quotes.

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