Top 10 Cheapest States for Auto Insurance Rates in 2026
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- 10+ years in journalism and content creation, with a B.A. in Journalism from Arizona State University.
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The amount drivers pay for auto insurance can vary dramatically depending on where they live. In some states, the average monthly premium is less than $100. In others, drivers may pay nearly three times as much for coverage.
To identify where drivers are paying the least, Freeway Insurance analyzed policy data from January through June 2026 and compared it with the same period in 2025. The analysis included single-car, single-vehicle liability, and full-coverage policies, with a minimum of 100 qualifying policies in each state during each period.
The results reveal which states had the lowest average auto insurance rates in 2026. They also show how the rankings shifted from the previous year, with some familiar low-cost states holding their ground while others moved in unexpected directions.
What Are the Cheapest States for Car Insurance in 2026?
The 10 cheapest states in Freeway’s policy data had average monthly premiums ranging from $87.23 in Wyoming to $112.44 in Alaska.
Across all 10 states, the average monthly auto insurance premium was approximately $103.93.
The 10 States With the Cheapest Auto Insurance Rates
1. Wyoming: $87.23 per Month
Wyoming had the cheapest auto insurance rates in Freeway’s 2026 policy data, with an average monthly premium of $87.23.
It was also one of only two states where the average rate fell below $100 per month. Compared with the first half of 2025, Wyoming’s average premium decreased by approximately 8.5%.
That combination of a low monthly cost and a meaningful year-over-year decline placed Wyoming comfortably at the top of the ranking.
2. Idaho: $97.80 per Month
Idaho had the second-cheapest average auto insurance premium at $97.80 per month.
Like Wyoming, Idaho was one of only two states in the analysis with an average monthly premium below $100. Its rates also decreased by approximately 6.3% compared with the same period in 2025. Idaho also benefits from lower population densities and fewer severe urban claims.
The difference between Idaho and first-place Wyoming was about $10.57 per month.
3. Indiana: $101.60 per Month
Indiana ranked third, with drivers in the dataset paying an average of $101.60 per month.
Average premiums in Indiana decreased by approximately 4.6% year over year. Although its rate was slightly above the $100 mark, Indiana remained among the most affordable states in the analysis.
4. Iowa: $103.01 per Month
Iowa had the fourth-cheapest average rate at $103.01 per month.
Unlike the three states ranked above it, however, Iowa experienced an increase in average premiums. Its rate rose by approximately 4.3% compared with the first half of 2025.
Despite that increase, Iowa remained one of the cheapest states for auto insurance in 2026.
5. Alabama: $103.38 per Month
Alabama ranked fifth, with an average monthly auto insurance premium of $103.38.
Rates in Alabama decreased by approximately 7.9% year over year. This was one of the largest declines among the 10 cheapest states, behind only Alaska and Wyoming.
Alabama’s average rate was just $0.37 higher than Iowa’s, showing how closely grouped several of the states in the middle of the ranking were.
6. South Dakota: $106.17 per Month
South Dakota had an average monthly premium of $106.17, making it the sixth-cheapest state in the data.
Its rates declined by approximately 3.2% from the first half of 2025 to the same period in 2026.
While that reduction was smaller than those recorded in Wyoming, Alabama, Idaho, and South Dakota continued to rank well below the most expensive states in the dataset.
7. Hawaii: $107.09 per Month
Hawaii ranked seventh, with an average monthly premium of $107.09.
However, Hawaii also experienced the largest increase among the 10 cheapest states. Its average premium rose by approximately 26.8% year over year.
This makes Hawaii one of the most notable states in the analysis. Even after this substantial increase, its average monthly premium remained among the 10 lowest in the dataset.
8. Vermont: $109.73 per Month
Vermont had the eighth-cheapest average auto insurance rate at $109.73 per month.
Its average premium increased by approximately 7.5% compared with the same period in 2025. That was the second-largest increase among the 10 cheapest states, behind Hawaii.
Even with that increase, Vermont’s monthly average remained just below $110.
9. Oklahoma: $110.89 per Month
Oklahoma arrives at ninth, with an average monthly premium of $110.89.
Rates decreased by approximately 3.1% year over year. While this was the smallest decline among the seven states in the top 10 where premiums fell, it helped the state improve its ranking.
10. Alaska: $112.44 per Month
Alaska rounds out the top 10 cheapest states for auto insurance with an average monthly premium of $112.44.
Although Alaska had the highest average cost among the 10 cheapest states, it also had the largest year-over-year decrease. Its average premium fell by approximately 27.5% compared with the first half of 2025.
That was a much larger decline than the reductions recorded in any other state on the list.
Are Auto Insurance Rates Going Up or Down in the Cheapest States?
Low-cost states do not necessarily remain stable from one year to the next. Among the 10 cheapest states in Freeway’s data, seven experienced a decrease in average premiums, while three saw an increase.
*These figures do not mean low-cost markets stay cheap forever, and state car insurance rates can still vary enough that a driver with an identical record may pay over twice as much depending on the state.
Alaska Had the Largest Rate Decrease
Alaska recorded the largest decrease among the 10 cheapest states, with its average monthly premium falling approximately 27.5%.
This was more than three times the decrease recorded in Wyoming, which had the second-largest reduction at approximately 8.5%.
The decline helped Alaska remain in the top 10 despite having the highest average premium within the group.
Hawaii Had the Largest Rate Increase
At the other end of the spectrum, Hawaii’s average premium increased by approximately 26.8%.
That was the largest increase among the cheapest states and one of the most significant changes in the entire dataset.
Hawaii’s ranking demonstrates why both current prices and recent trends matter. A state can still be relatively inexpensive even when its rates are rising rapidly.
How Much Cheaper Are the Lowest-Cost States?
The differences among the 10 cheapest states were relatively modest.
Wyoming’s average rate of $87.23 was only $25.21 lower than Alaska’s average of $112.44. That means all 10 states were grouped within a range of roughly $25 per month.
The difference becomes much more dramatic when the cheapest states are compared with the highest-cost states in the data.
South Carolina had the highest average monthly premium at $297.28. That was approximately $210.05 more per month than Wyoming.
If that monthly difference remained consistent for a full year, it would add up to an extra $2,520.59.
* These figures do not mean that a particular driver would automatically save the same amount by moving from one state to another. Insurance rates are based on many personal, vehicle, and location-specific factors. However, the data illustrates how widely average premiums can differ across state lines.
Why Is Auto Insurance Cheaper in Some States?
Auto insurance rates can vary widely from one state to another. There isn’t a single reason one state is more affordable than another. Instead, insurance costs are shaped by a mix of state requirements, local conditions, and other factors insurers may consider when setting rates.
State Coverage Requirements
Minimum coverage is the least amount required by state law. State regulations and other legal requirements dictate minimum liability limits and additional car insurance coverage mandates, which can affect the cost of a policy.
A state with more extensive mandatory coverage may have higher average premiums than a state with lower minimum requirements. Some states require personal injury protection, which can increase costs. Full coverage is generally more expensive than minimum coverage.
Accident and Claim Frequency
Insurers consider how frequently drivers in an area file claims, with factors like accident frequency and traffic density affecting how expensive those claims tend to be.
In urban areas, more crashes, injuries, thefts, and vehicle damage often lead to higher premiums, while rural areas and more rural states often rank among the most budget-friendly for drivers. Those expenses can eventually be reflected in the premiums charged to drivers in the area.
Vehicle Repair and Medical Costs
The cost of repairing a vehicle or treating injuries after an accident can vary from one location to another.
Higher labor rates, parts costs, medical expenses, legal costs, and different litigation environments may contribute to more expensive claims and higher premiums. When the average cost of a claim rises, insurers may adjust insurance premiums accordingly.
Population Density and Traffic
States and cities with dense traffic may have a higher risk of collisions than less-populated areas, which often present a lower risk profile for insurers.
That being said, statewide averages can hide important local differences. Drivers in rural areas may receive very different quotes than those in a state’s largest metro areas. States with lower population density also tend to have fewer accidents and claims, which can contribute to lower average insurance costs.
Weather and Natural Disasters
Weather and natural disaster risks significantly affect auto insurance premiums and can also influence auto insurance claims.
Flooding, hurricanes, hail, wildfires, ice storms, and other events may damage large numbers of vehicles at once, and car insurance costs can vary considerably by state and region based on the type and frequency of these risks.
Uninsured Drivers and Insurance Fraud
Rates may also be affected by the number of uninsured drivers on the road, patterns of insurance fraud, and the overall cost of resolving claims within a state.
These factors are only general explanations. Freeway’s dataset shows differences in average premiums, but should not be interpreted as proving that any one factor caused a state’s rates to rise or fall.
Does Living in a Cheap State Guarantee a Low Rate?
Living in one of the cheapest states does not guarantee that every driver will receive a low quote.
Individual auto insurance rates can differ based on personal factors. Two drivers living in the same state, or even on the same street, may pay very different rates.
Factors that may affect an individual premium include:
- ZIP code
- Age, including teen drivers, and driving experience
- Driving record
- Claims history
- Vehicle make and model
- Annual mileage
- Coverage limits
- Deductible amounts
- Number of drivers and vehicles
- Available discounts
- Credit-based insurance information, where permitted
The type of coverage also matters. A liability-only policy will generally cost less than a policy that includes comprehensive and collision coverage, although it provides less protection for the insured vehicle.
Because insurers evaluate risk differently, compare car insurance quotes to determine which company offers the best rate for a specific driver.
How We Identified the Cheapest States for Auto Insurance
Freeway Insurance analyzed internal policy data from January through June 2026 and compared it with data from January through June 2025.
The analysis included:
- Single-car policies
- Single-vehicle policies
- Liability and full coverage policies
- States with at least 100 qualifying policies in each comparison period
States were ranked by their average monthly written premium across qualifying policies.
The year-over-year percentage reflects the change in that average between the first six months of 2025 and the first six months of 2026.
Limitations of the Analysis
The results reflect the policies included in Freeway’s dataset. They should not be interpreted as the average price offered by every insurance carrier or the amount every driver in a state can expect to pay.
The analysis also combines liability and full coverage policies. The percentage of each policy type represented in a state may affect its overall average.
Individual premiums may vary based on personal characteristics, coverage selections, location, vehicle, and insurer.
Additionally, the data identifies changes in average premiums, but does not specifically determine what caused those changes.
Methodology: Analysis compares January–June 2025 with January–June 2026 and includes single-driver, single-vehicle Liability and Full Coverage policies. Results are based on aggregated issued policy data and reflect historical premiums; individual rates may vary based on coverage, location, driver profile, underwriting criteria, and carrier eligibility. For additional details on the policy data, coverage assumptions, and methodology, please reference the Freeway Data Methodology page.
How to Find Cheaper Auto Insurance in Your State
Even if your state does not appear among the 10 cheapest, there may be steps you can take to reduce your own auto insurance costs.
Compare Quotes From Multiple Insurers
Insurance companies do not all calculate rates in the same way. One carrier may place more weight on a particular rating factor than another.
Comparing multiple quotes can help you identify which insurer offers the best combination of price and coverage for your circumstances.
Review Your Coverage
Review your policy periodically to make sure your coverage still reflects your needs.
You may be able to adjust optional protections or deductibles, but avoid reducing coverage solely to obtain the cheapest possible premium. A lower-cost policy may leave you with significantly higher expenses after an accident.
Ask About Discounts
Depending on the insurer and your eligibility, discounts may be available for:
- Bundling home and auto insurance for lower premiums
- Insuring more than one vehicle
- Maintaining a clean driving record
- Paying the policy in full
- Enrolling in automatic payments
- Completing an approved defensive-driving course
- Driving fewer miles
- Using a telematics or safe-driving program
Discount availability and eligibility requirements vary by insurer and state, and in some areas, good credit may also help drivers qualify for lower premiums.
Find Affordable Auto Insurance With Freeway
Auto insurance prices vary widely across the country, but your state’s average rate is only one part of the equation.
The most useful way to understand what you may pay is to compare personalized quotes based on your location, vehicle, driving history, and coverage needs.
Freeway Insurance can help you explore available coverage options and compare prices from multiple insurance carriers. Get an auto insurance quote today to see what coverage is available in your state.
Frequently Asked Questions
Which state has the cheapest auto insurance in 2026?
Wyoming had the cheapest auto insurance rates in Freeway’s policy data, with an average monthly premium of $87.23 during the first six months of 2026.
What is the average premium across the 10 cheapest states?
The average monthly premium across the 10 cheapest states was approximately $103.93.
Which cheap state had the largest rate decrease?
Alaska had the largest year-over-year decrease among the 10 cheapest states. Its average premium fell approximately 27.5% compared with the first half of 2025.
Which cheap state had the largest rate increase?
Hawaii had the largest increase among the 10 cheapest states. Its average premium rose approximately 26.8% year over year.
How much more expensive was the highest-cost state?
South Carolina’s average monthly premium of $297.28 was approximately $210.05 higher than Wyoming’s average of $87.23.
Why do auto insurance rates vary by state?
Rates may vary because of state coverage requirements, traffic and accident frequency, repair costs, medical expenses, severe weather, uninsured drivers, and other claim-related factors. Individual premiums also depend on the driver, vehicle, ZIP code, and selected coverage.
Is liability insurance always cheaper than full coverage?
Liability-only coverage generally has a lower premium than a policy that also includes comprehensive and collision coverage. However, liability coverage does not pay to repair or replace the insured vehicle after many types of losses.
Can I get a different rate than my state’s average?
Yes. State averages do not represent an individual quote. Your actual rate may be higher or lower depending on your driving record, vehicle, location, coverage selections, discounts, and the insurance company you choose.
