Cheap monthly car insurance refers to auto insurance policies with low premiums that you pay in convenient monthly instalments rather than a lump sum. Insurers like GEICO, State Farm and Travelers all allow you to pay by the month. Paying monthly can help you manage cash flow, though it may cost slightly more overall than an annual payment (some carriers charge a small service fee, and you forgo “pay-in-full” discounts).
For example, Bankrate notes that monthly payments remove the need for a large upfront premium, but also mean “no pay-in-full discount” and potential instalment fees. In practice, a “cheap” plan might be a bare-bones liability-only policy from $40–50 per month, whereas a low-cost full-coverage plan could be under $100/month (see table below).
Driving is costly now – insurers have raised rates aggressively in recent years. For context, the U.S. Bureau of Labor Statistics reports car insurance costs jumped ~55% from late 2019 to late 2022 Insurify data show insurers hiked premiums ~24% in 2023 and forecast another ~22% increase in 2024 Money Geek analysis confirms this spike:
insurance inflation hit a 23% peak in early 2024, then cooled to ~7.5% in 2025. In this environment, spreading payments monthly can make a big bill more affordable. In fact, recent surveys find companies quoting liability plans as low as the $40s per month. The key is finding a genuinely budget-friendly policy without sacrificing needed protection.
This deep guide explains what qualifies as cheap monthly car insurance, why you might choose it, the main factors that drive your quote, and concrete steps to lower your premium. We also list the 10 insurers most often offering the lowest monthly rates for various drivers in 2025–2026. Throughout, we cite up-to-date data from NerdWallet, MoneyGeek, Bankrate and other experts. By the end, you’ll be able to compare quotes and pick the best inexpensive monthly plan for your needs.
What Is Cheap Monthly Car Insurance?
Cheap monthly car insurance simply refers to auto insurance policies paid in monthly instalments that have low premiums. Instead of paying an annual premium all at once, you make affordable recurring payments each month. Insurers like Geico, State Farm, and Travelers all offer billing in monthly instalments.
Choosing a monthly policy can ease cash flow, especially with a low-cost monthly premium, though the total annual cost may be slightly higher than paying upfront. Many companies advertise budget-friendly car insurance plans with options for Cheap Monthly Car Insurance only (minimum coverage) or Cheap Monthly Car Insurance (comprehensive + collision) to suit different needs.
Why Consider a Cheap Monthly Payment Plan?
Paying monthly keeps premiums smaller and more predictable each billing cycle. This is crucial in 2025 as car insurance costs have surged (approximately 22% increase from 2023 to 2024 By opting for a low-cost monthly plan, you avoid large upfront payments and can better manage your budget.
A cheap monthly car insurance plan often comes with the same benefits as an annual plan: you still get all required coverage, discounts (safe-driver, bundling, etc.), and support from top insurers. Many drivers use monthly liability insurance when funds are tight, then upgrade to full coverage later. Overall, an affordable recurring payment can make the difference between having needed coverage and skipping insurance altogether.
Key Factors That Affect Monthly Premiums?
Several personal and policy factors determine how cheap your monthly premium will be:
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Coverage Level – Liability-only (state minimum) plans cost far less than full coverage. For example, NerdWallet notes State Farm’s median liability policy costs only $40 per month, whereas full coverage averages were much higher.
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Vehicle & Use – Cheaper cars, low annual mileage, or having safety features often lower premiums. Usage-based insurers like Root only insure low-mileage, safe drivers and reward them with low monthly rates (often the cheapest monthly Car Insurance in their categories)
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Location – Urban areas with more accidents or theft have higher rates. By contrast, rural or low-risk regions see cheaper quotes. (Tip: MoneyGeek data shows that comparing by ZIP code can save ~$42/month on average
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Driver Profile – Your age, driving record, and even credit score matter. Young or high-risk drivers pay more; good drivers earn discounts. For instance, Cheap Monthly Car Insurance data found GEICO was the cheapest for young drivers with clean records.
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Deductible & Limits – A higher deductible yields a lower monthly payment. Cheap Monthly Car Insurance: “increasing your liability limits or lowering your deductible will raise the cost of your policy and vice versa” (In other words, choose higher deductibles to reduce your monthly premium.)
How to Save on Your Cheap Monthly Car Insurance?
Use these strategies to lower your affordable recurring payment and get the Cheap Monthly Car Insurance you need:
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Compare quotes regularly: Shop around every renewal. Even small differences add up – MoneyGeek found that comparing providers in your state can save an average of $42 per month. Use online tools or an independent agent to get multiple quotes.
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Raise your deductible: Opt for a higher deductible if you can cover it in case of a claim. This significantly reduces your premium. Just make sure you have an emergency fund to pay the deductible if needed.
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Choose the right coverage: Stick with minimum liability-only coverage if state law allows it. Liability-only is the cheapest form of Cheap Monthly Car Insuranc.e For example, State Farm’s average $40/mo policy covers legal minimums. Only upgrade to full coverage when you can afford higher rates.
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Ask about discounts: Almost all insurers offer discounts – multi-policy (bundling home or renters), safe driver (no accidents/tickets), good student, defensive driving course, anti-theft devices, etc. These can lead to Cheap Monthly Car Insurance (low overall premium). Mention all available discounts when quoting.
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Maintain good credit: In most states, better credit can mean lower rates. A poor credit score often pushes premiums higher. (Data indicate carriers like GEICO offer the lowest rates even for drivers with poor credit) Try to improve your credit score to get cheaper quotes.
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Pay annually if possible: If your budget allows, paying the annual premium upfront often yields a discount. However, if not, spread it out monthly – just watch for any financing fees. Many companies add a small fee for monthly billing.
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Drive safely: Avoid accidents and tickets, and install telematics apps. Some insurers (like Progressive’s Snapshot or USAA’s SafePilot) reward safe driving habits with lower future rates. A clean record over time translates to cheaper renewal premiums.
Top 10 Cheap Monthly Car Insurance Companies?
Below are ten insurers known for offering some of the cheapest monthly rates across various profiles. We include data from NerdWallet, Bankrate, MoneyGeek, and industry analyses to highlight each company’s strengths:
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USAA – Best for Military Families. USAA consistently has the lowest premiums for those who qualify (military members, veterans, and families). It reports an average $117/month for full coverage and only $35 for liability coverage. USAA offers exclusive military discounts (SafePilot, on-base parking, etc.), yielding some of the cheapest Monthly Car Insurance rates available. (Note: USAA is only available to the military community.)
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GEICO – Nationwide Budget Leader. GEICO is the second-largest insurer in the U.S. and often one of the cheapest. NerdWallet data show Geico’s median full-coverage rate is about $165/month, and Bankrate notes Geico’s low rates for drivers of all types. For minimum coverage, GEICO can quote around $43/month. GEICO’s wide network, user-friendly website/app, and multi-vehicle and good-driver discounts help keep its premiums low.
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State Farm – Widely Available & Reliable. State Farm, the nation’s biggest insurer, offers very competitive minimum coverage rates. NerdWallet finds State Farm’s average liability-only premium is just $40/month – the cheapest among large insurers. Its full coverage rates are also below many competitors. State Farm gives discounts for safe drivers, multi-car policies, and good credit. Its extensive agent network ensures personalised service while still providing budget-friendly car insurance.
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Travellers – Cheap Full Coverage. Travellers is often cheapest for comprehensive coverage policies. NerdWallet ranks Travelers as the lowest-cost full coverage insurer at about $143/month. MoneyGeek likewise notes Travelers’ average full coverage premium is only ~$97/month (29% below the national average). Travelers’ policies include extras like accident forgiveness and new car replacement at no extra cost. For customers needing full coverage on a tight budget, Travelers is a top choice.
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Auto-Owners Insurance – Regional Bargains. Available in 26 states, Auto-Owners offers some of the lowest premiums for regional carriers. According to Bankrate, Auto-Owners has the lowest Cheap Monthly Car Insurance.
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Insurance premium in the country (~$41/mo). Its Bankrate Score is 4.3/5, reflecting excellent financial strength and customer satisfaction. Auto-Owners provides flexible add-ons (like roadside assistance) while keeping rates cheap. If you live in one of its states, getting a quote is a must for cheap Monthly Car Insurance rates.
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Amica Mutual – Top Service and Good Rates. Amica is best known for award-winning customer service, but it also offers surprisingly affordable rates. MoneyGeek data list Amica’s average full coverage rate at about $115/month. That’s only a bit higher than Travelers, yet Amica often wins customer satisfaction awards (J.D. Power, Bankrate Best Overall). For drivers who want cheap Monthly Car Insurance plus premium service, Amica (available nationwide except in Hawaii) is an excellent pick.
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Progressive – Customization & Discounts. Progressive provides many ways to save with usage-based programs (Snapshot), discounts for bundling, and loyalty pricing. MoneyGeek shows Progressive’s average full coverage is about $125/month (6% below average). It also offers very low liability rates (sometimes $40–50/mo) and competitive rates after incidents like DUIs or accidents. Progressive’s Name Your Price tool and heavy online presence make it easy to find cheap monthly auto insurance quotes.
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Root Insurance – Pay-Per-Mile (Safe Drivers). Root is an app-based insurer that only accepts drivers with excellent records. Because it uses telematics, Root can offer some of the lowest premiums for eligible customers. In fact, Root’s average full-coverage quote is about $93/month, the cheapest on our list, reflecting its safe-driver focus. However, Root isn’t available in all states and disqualifies many drivers, so check eligibility. For long-time safe drivers, Root can mean rock-bottom rates.
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Nationwide – All-Purpose Competitor. Nationwide often appears near the bottom of rate rankings for certain demographics. For example, Nationwide averaged about $126/month for senior drivers in one analysis. It also provides a wide range of discounts (vanishing deductible, multi-policy, etc.). Nationwide’s rates tend to be competitive, especially for good drivers, and its coverage options are extensive. It’s worth quoting Nationwide if you live in a state where it writes auto insurance, as it often matches or beats larger rivals.
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American National – Regional Full-Coverage Deals. American National is a smaller but notable insurer with some very low rates in its markets. MoneyGeek notes that in the states where American National is cheapest, full coverage costs only about $67/month on average . It won 3 states (like Alabama and South Carolina) for the cheapest full coverage. While not a household name nationwide, American National’s regional strength means it can undercut big carriers in select areas. If available, it’s one of the budget-friendly car insurance picks for cheap full coverage.
FAQs: Cheap Monthly Car Insurance
Q: What exactly is cheap monthly car insurance?
A: It’s auto insurance that you pay for in monthly installments with low premiums. Essentially, you’re buying a regular policy but spreading the cost into an affordable recurring payment each month.
Insurers structure it just like any policy; the only difference is how you pay. Companies often call it “budget car insurance” or “no-deposit insurance.”
Q: How can I find the cheapest monthly car insurance?
A: Shop around and compare quotes. Use online comparison tools or consult multiple insurers. Data shows that comparing providers can save an average of ~$42 per month.
Also, adjust your coverage: raise deductibles, drop to liability-only if suitable, and apply every discount you qualify for. Quotes vary widely by driver profile, so the “cheapest” insurer for you may differ from someone else.
Q: Does cheap monthly insurance offer full coverage?
A: Yes, you can get full (comprehensive + collision + liability) coverage at a cheap monthly rate, but it requires shopping. For instance, Travelers and Amica provide full policies for ~$97–115 per month.
Just be aware that higher coverage levels or lower deductibles raise your payment. If full coverage costs too much, consider liability-only (state minimum) to lower the monthly cost.
Q: Why is my monthly premium so high?
A: Many factors can inflate it: a new or expensive car, living in a high-risk area, a history of accidents or tickets, a young age, or a low credit score. Each of these raises your rate. Review your policy limits (liability only is the cheapest) and consider discounts.
According to Bankrate, drivers with clean records and good credit pay far less than those with at-fault accidents or poor credit. Regularly updating your insurer on safe driving courses or improved credit can lower costs.
Q: What is “monthly liability insurance”?
A: This refers to a liability-only policy billed monthly. It covers just the legally required minimum (bodily injury/property damage to others) and excludes collision/comprehensive.
Liability-only plans have the lowest premiums. For example, State Farm’s average liability-only plan is ~$40/month. It’s a cheap way to stay legal on the road, but remember it won’t pay for your own car repairs if you get in an accident.
Q: How do I switch to a cheaper monthly plan?
A: First, don’t renew automatically. Call your insurer or agent before renewal and ask for lower-priced options or Cheap Monthly Car Insurance.
Then, get online quotes from competitors – many insurers waive cancellation penalties for better offers. You can often save money by simply switching to a competitor’s similar plan. Before switching, ensure the new policy has the same (or adequate) coverage.
Conclusion
When budgeting for car insurance, knowing where to look makes all the difference. The 10 best cheap monthly car insurance companies above include options for nearly every driver, from USAA’s unbeatable military rates to Root’s usage-based savings.
To secure the lowest possible cheap monthly car insurance rate, compare quotes, use discounts, and tailor your coverage wisely. Even full coverage doesn’t have to be expensive – as we’ve seen, cheap full coverage plans are available.
Begin by requesting quotes from a few of the insurers listed, using their online calculators or agents. Remember that factors like credit, age, and driving history will affect your personal quote.
By leveraging the tips and data above, you can find an economical policy with low-cost premiums. Feel free to share this guide or comment with your own savings tips. The more you engage, the more you help others find affordable auto coverage. Safe driving!
