As a busy mom of four, I’ve always tried to save money wherever possible—especially when it comes to car expenses. A few years ago, I needed a second vehicle for running errands and getting the kids to school, but I didn’t want to take on a big car payment.

So, I found a used, budget-friendly sedan for just $4,200. It was reliable, got good gas mileage, and best of all—it was completely paid off! But when I went to get insurance for my cheap car, I was shocked by how much the quotes were. Why was my insurance almost as expensive as my car?

That’s when I decided to shop around and find the best, most affordable coverage for my budget-friendly vehicle. After comparing providers, adjusting my policy, and taking advantage of discounts, I found a great insurance plan for under $50 per month.

If you drive a cheap or older car, here’s how to find affordable insurance without overpaying—and what coverage you actually need!

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Why Insurance for Cheap Cars Can Still Be Expensive

🚗 You might think that owning a cheap car = cheap insurance, but that’s not always true.

Here’s why some budget-friendly cars still have high insurance rates:

✔ Minimum coverage requirements – Even if your car is cheap, liability insurance is still mandatory in most states.
✔ No safety features – Older vehicles lack modern safety technology, making them riskier to insure.
✔ No financing = no discounts – Some insurers give lower rates to financed or leased cars.
✔ High theft risk – Certain older vehicles are more likely to be stolen, which raises insurance costs.

📌 But the good news? There are still plenty of ways to lower your rates!

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Best Insurance Companies for Cheap Cars

After comparing multiple providers, I found that these insurance companies offer the best rates for budget-friendly vehicles:

1. GEICO – ⭐ Best for Overall Low Rates

✔ Average Cost for Cheap Cars: $40–$80/month
✔ Why I like it: Competitive pricing and lots of discount opportunities.

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2. State Farm – ⭐ Best for Safe Drivers

✔ Average Cost for Cheap Cars: $45–$90/month
✔ Why I like it: Great for people with clean driving records.

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3. Progressive – ⭐ Best for Flexible Coverage Options

✔ Average Cost for Cheap Cars: $50–$95/month
✔ Why I like it: The “Name Your Price” tool lets you adjust your coverage to fit your budget.

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4. The General – ⭐ Best for High-Risk Drivers

✔ Average Cost for Cheap Cars: $60–$110/month
✔ Why I like it: Works well for drivers with past violations or no prior insurance history.

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5. Metromile – ⭐ Best for Low-Mileage Drivers

✔ Average Cost for Cheap Cars: Pay-per-mile pricing
✔ Why I like it: Ideal for people who don’t drive often.

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How to Get the Cheapest Insurance for a Budget-Friendly Car

If you’re insuring a cheap or older car, here are the best ways to save money:

✅ 1. Drop Comprehensive & Collision Coverage If Your Car Is Old

💰 Savings: 30-60%

• If your car is worth less than $5,000, full coverage may not be worth it.
• Liability-only insurance covers damage you cause to others but not your own car.

✅ 2. Choose a Higher Deductible

💰 Savings: 10-20%

• A higher deductible ($1,000 instead of $500) lowers your monthly premium.
• This is a great option if you have money set aside for small repairs.

✅ 3. Ask About Discounts

💰 Savings: 10-40%

• Common discounts include:
  ✔ Good driver discount – If you’ve had no accidents in 3+ years.
  ✔ Low-mileage discount – If you drive under 7,500 miles per year.
  ✔ Multi-policy discount – If you bundle auto and home insurance.
  ✔ Paid-in-full discount – Paying for 6 months upfront lowers your cost.

✅ 4. Compare Multiple Quotes Before Buying

💰 Savings: Up to $900 per year

• Some insurers charge double what others do for the same coverage.
• Always get at least 3-5 quotes before picking a policy.

✅ 5. Consider Pay-Per-Mile Insurance

💰 Savings: 10-30%

• If you drive less than 10,000 miles per year, companies like Metromile base your premium on actual miles driven.

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How I Found Cheap Insurance for My Budget-Friendly Car

When I bought my $4,200 used sedan, my first insurance quote was $115 per month—which felt way too high for a car that wasn’t even worth that much.

Here’s how I cut my insurance cost to just $48 per month:

✔ Compared quotes from GEICO, Progressive, and State Farm.
✔ Switched to GEICO because they had the lowest rate for my car’s value.
✔ Dropped collision & comprehensive coverage (kept liability-only).
✔ Increased my deductible from $500 to $1,000.
✔ Applied a low-mileage discount since I only drove about 8,000 miles per year.
✔ Paid for 6 months upfront to avoid monthly installment fees.

Final result: My monthly payment dropped from $115 to $48, saving me over $800 per year!

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FAQs About Insurance for Cheap Cars

🔹 Is liability-only insurance a good option for a cheap car?
✔ Yes! If your car is worth less than $5,000, liability-only is often the cheapest and smartest option.

🔹 What’s the cheapest insurance company for budget cars?
✔ GEICO, Progressive, and Metromile tend to offer the lowest rates.

🔹 Does my state require full coverage?
✔ No! Most states only require liability insurance—full coverage is optional.

🔹 Why is my insurance expensive even though my car is cheap?
✔ Your rate depends on driving history, location, and coverage choices—not just the car’s value.

🔹 How can I lower my car insurance even more?
✔ Raise your deductible, apply for discounts, and compare multiple quotes before choosing a policy.

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Final Thoughts: Get the Cheapest Insurance for Your Budget-Friendly Car

If you drive a cheap or older car, you shouldn’t have to overpay for insurance.

✔ Compare multiple quotes to find the best deal.
✔ Drop full coverage if your car’s value is low.
✔ Ask about discounts for low mileage, safe driving, and bundling.
✔ Consider pay-per-mile insurance if you don’t drive much.

By following these steps, you can stay insured at the lowest cost possible—just like I did! 🚗💰