💰 Quick Answer: Cheapest Car Insurance 2025
🥇 MILITARY FAMILIES
🥈 GENERAL PUBLIC
🥉 SAFE DRIVERS
Cheapest Car Insurance Companies Ranked
| Rank | Company | Full Coverage | Minimum Only | AM Best | Catch? |
|---|---|---|---|---|---|
| 🥇 1 | USAA | $1,407 | $417 | A++ | Military only |
| 🥈 2 | Root Insurance | $1,120 | $380 | Not rated | Telematics test required |
| 🥉 3 | Lemonade | $1,380 | $420 | A (Demotech) | High complaint rate |
| 4 | Nationwide | $1,548 | $512 | A | None |
| 5 | GEICO | $1,731 | $517 | A++ | None (best for most) |
| 6 | American Family | $1,936 | $545 | A | Regional (Midwest) |
| 7 | Progressive | $1,960 | $572 | A+ | None |
| 8 | State Farm | $2,167 | $674 | A++ | None |
| 9 | Allstate | $2,605 | $782 | A+ | Higher premiums |
| 10 | Liberty Mutual | $3,061 | $890 | A | Higher premiums |
| 11 | Farmers | $3,874 | $1,012 | A | Highest prices |
Rates based on 35-year-old good driver with clean record. Your actual rate may vary based on location, credit, and driving history.
Our Best Value Picks
GEICO
GEICO offers the best combination of low rates AND reliability for most drivers. A++ financial strength means they'll be around to pay your claims, and their 0.69 complaint index is well below average.
USAA
If you're eligible (military, veterans, or their immediate family), USAA is the clear winner. Lowest rates AND highest customer satisfaction in the industry.
About Root Insurance (The Catch)
Root offers the absolute lowest rates ($1,120/year average)—but there's a catch. Before you can get a quote, you must complete a 2-3 week "test drive" where Root's app monitors your driving behavior.
✓ Root Pros
- • Lowest rates if you pass the test
- • Rates based on actual driving, not demographics
- • Good for safe, low-mileage drivers
- • Simple app-based experience
✗ Root Cons
- • No AM Best rating (financial strength unknown)
- • NAIC complaint index: 1.32 (above average)
- • Not available in all states
- • Must share driving data with app
Bottom line: Root can be great for safe drivers comfortable with telematics, but the lack of financial ratings is a concern. Consider it if you're very confident in your driving habits and want the absolute lowest rate.
Cheapest Insurer by State
The cheapest insurer varies by state due to different regulations, risk pools, and competitive dynamics. Here are the top picks for high-population states:
| State | Cheapest Insurer | Avg. Rate | Runner-Up |
|---|---|---|---|
| California | GEICO | $2,340 | Wawanesa, Mercury |
| Texas | GEICO | $1,890 | Progressive |
| Florida | GEICO | $3,200 | Progressive |
| New York | GEICO | $2,650 | Progressive |
| Michigan | Progressive | $4,100 | GEICO |
| Ohio | GEICO | $1,180 | Nationwide |
| Illinois | GEICO | $1,560 | State Farm |
GEICO leads in most states due to its direct-to-consumer model and national scale. In some states, regional insurers like Wawanesa (CA) or Erie (PA/OH) may offer better rates.
⚠️ Don't Just Buy the Cheapest
The cheapest policy isn't always the best value. Here's what to watch for:
- Check the NAIC complaint index. A cheap insurer with high complaints may fight your claims aggressively.
- Verify AM Best ratings. Unrated insurers may not be around to pay claims in 10 years.
- Compare coverage, not just price. A "cheap" policy with less coverage isn't a deal—it's a risk.
- Read the fine print. Some budget insurers use strict claim denial policies to keep costs low.
Frequently Asked Questions
Why is GEICO so cheap? ▼
GEICO uses a direct-to-consumer model without local agents, which dramatically cuts overhead costs. They also benefit from scale (2nd largest auto insurer in the US) and are owned by Berkshire Hathaway, which provides financial stability. Their efficiency allows them to offer lower rates while maintaining A++ financial strength.
Is it safe to use a cheap car insurance company? ▼
Yes, if you verify two things: 1) AM Best rating of A- or higher (ensures financial stability), and 2) NAIC complaint index under 1.5 (ensures reasonable claims handling). GEICO, USAA, and Nationwide all pass both tests. Root and Lemonade are cheap but have concerning complaint ratios.
How can I get the cheapest car insurance? ▼
1) Compare at least 3-5 quotes before buying. 2) Raise your deductible to $1,000 (saves 15-30%). 3) Bundle with home/renters insurance (10-25% off). 4) Ask about all available discounts (good student, professional associations, low mileage). 5) Consider telematics if you're a safe driver. 6) Shop annually—don't auto-renew.
The Bottom Line
For most drivers, GEICO offers the best balance of low rates, financial strength, and acceptable customer service. If you're eligible for USAA, that's your clear winner. Root can beat everyone on price—but only if you're comfortable with telematics and an unrated insurer.
Remember: the cheapest policy isn't always the best deal. A company that denies claims aggressively or goes bankrupt will cost you far more than the premium difference. Always check AM Best ratings and NAIC complaint data before buying.