The companies delivering the cheapest car insurance are revealed

The companies delivering the cheapest car insurance are revealed
(Image credit: Getty)

American motorists have received a helping hand in their search for cheap car insurance after a new study identified the companies offering the lowest auto insurance rates for various types of driver. With some 105 million motorists in the US believing they don’t get value for money from their insurance policy, WalletHub’s findings leave few excuses for paying over the odds for motoring protection in 2021.

In a study which compared over 1 million quotes across 40 different driver profiles, GEICO has been crowned the cheapest car insurance company overall, tallying nicely with our guide to the best auto insurance, in which we also rate the insurer as the best for cheap premiums. 

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Cheapest Car Insurance Companies - Source: WalletHub
OverallFull CoverageAfter a TicketOne At-Fault AccidentAfter a DUI
GEICOUSAA InsuranceErie InsuranceAuto-Owners InsuranceState Farm
USAA InsuranceGEICOGEICOState FarmErie Insurance
Erie InsuranceState FarmUSAA InsuranceErie InsuranceProgressive Insurance
Auto-Owners InsuranceErie InsuranceState FarmUSAA InsuranceTravelers Insurance
State FarmEsuranceTravelers InsuranceGEICOUSAA Insurance

With the cost of owning a new car rising above $9,500 last year, keeping motoring costs in check is an ongoing battle. Buying an older car will usually save money in the first instance, but with an increased risk of breakdown, many also pay out for the security that roadside assistance services and extended car warranties can provide. 

For any driver, the cost of insurance will represent a substantial outlay too, although premiums can vary widely depending on the insured, their needs, and their past driving record. To take this into account, the research also considered metrics covering 10 different sub-categories, such as age, gender, driving record, and different types of cover. 

Once all the data had been collated, USAA Insurance was found to provide the most affordable premiums for a full coverage policy, while those with a speeding ticket to their name are pointed towards Erie Insurance to keep costs low. The cheapest premiums for drivers who have been at fault for an accident in the past are typically found at Auto-Owners Insurance

In the final shakedown, however, it is Geico that will suit most, with the company leading the way for both younger and older drivers, and those who have poor credit.

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Cheapest Car Insurance Companies (continued) - Source: WalletHub
With Poor CreditYoung DriversOlder Drivers
USAA InsuranceUSAA InsuranceUSAA Insurance
NationwideErie InsuranceState Farm
Travelers InsuranceTravelers InsuranceErie Insurance
Safeco InsuranceState FarmTravelers Insurance

Almost 1 in 3 Americans were unaware that less-than-good credit can affect premiums, and in some states - California, Hawaii, Massachusetts, and Michigan - credit history information may not be used in setting car insurance rates. Where it is permitted, however, making the effort to improve your credit rating could result in lower premiums.  

“Excellent credit history has a well-documented relationship with fewer claims filed by an insured and vice versa,” explains J. Tim Query, Professor & Mountain States Insurance Group Endowed Chair. “Insurers believe that individuals who are careful with credit usage will also exercise care in other areas, such as driving behavior.”

How to save money on car insurance

Elsewhere within the survey it was revealed that 61 million Americans have reduced their insurance coverage as a result of the coronavirus pandemic. With vehicle usage slumping during the initial lockdown last spring, and with more people working and staying at home in the months’ since, drivers have received car insurance refunds worth billions of dollars in the past year.  

The companies delivering the cheapest car insurance are revealed

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When it comes to renewing policies, tailoring cover to any new circumstances is therefore key, particularly if you’ve gone from constantly motoring up and down the highways to barely using your vehicle at all. With the research finding that full coverage typically costs 178% more than minimum coverage, huge savings can be made by scaling back cover if it’s no longer needed. Making sure you get quotes from a number of insurers, and switching to a new company if necessary, is essential too. 

“The best way to save money on car insurance is to compare quotes from the cheapest car insurance companies and choose whichever provider offers the lowest rates. The difference between the cheapest and most expensive car insurance companies can be thousands of dollars per year,” said Jill Gonzalez, WalletHub analyst. 

“In addition to regularly comparing quotes and switching insurers when a good deal is available, drivers should make sure to take full advantage of car insurance discounts and, most importantly, drive safely. Accidents and moving violations can quickly result in increased insurance costs.”

Tim Leonard

With over 20 years’ experience in the financial services industry, Tim has spent most of his career working for a financial data firm, where he was Online Editor of the consumer-facing Moneyfacts site, and regularly penned articles for the financial advice publication Investment Life and Pensions Moneyfacts. As a result, he has an excellent knowledge of almost areas of personal finance and, in particular, the retirement, investment, protection, mortgage and savings sectors.