Best Auto Insurance Companies for Financed Cars (2021)

When comparing the best auto insurance companies for financed cars, three key factors can help you decide. These are the company's A.M. Best score, their NAIC rating, and their BBB score. Among the best auto insurance companies for financed cars are GEICO, State Farm, and Progressive.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Sep 24, 2021

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Things to Remember

  • In most states, the minimum requirement for a financed car is collision, bodily injury, and comprehensive insurance
  • Lenders will require their clients to maintain full coverage of their auto insurance policy to protect their investment
  • Once a financed vehicle is paid, the driver can then opt to downgrade their full coverage insurance to liability coverage

The best auto insurance companies for financed cars may look different than your typical auto insurance if you were to own the car outright. When lenders are involved, the requirements must meet the satisfaction of the lenders.

Most of these requirements will be in the form of a full coverage auto insurance policy. While there are plenty of deductibles to choose, add-on coverages will also help protect you and the bank’s investment in your vehicle.

Understanding the factors that affect auto insurance rates will be a key component in choosing which company and policy is right for you.

Continue to the article below for information on the best insurance for financed cars and how you can find which company is right for you. Using our free and easy to use comparison tool, enter your ZIP code above to compare car insurance rates today. 

What is the minimum coverage for a financed car?

When buying a vehicle, you’ll be legally required to carry the minimum coverage before driving. In most states, this requirement will depend on whether you get a loan for your car, buy your car outright, or even choosing which model year of the car you can buy.

For financed cars, the rules are a little bit different. When looking for the best auto insurance companies for financed cars car insurance quotes, it is important to remember a few key things.

Lenders will require full coverage auto insurance to protect their investment from physical damage done to the vehicle. If the car is damaged in an accident, you will only be responsible for paying the deductible. The insurance company will pay for the rest.

Full coverage is not only a way to protect the lender’s loan but also provides a benefit to the driver by not having to pay the full cost of car repairs.

Minimum car insurance requirements by each state will always have a factor in what affects auto insurance rates. But by understanding what kind of policies are necessary for your financed vehicle, will help you figure out which companies are right for you to choose from.

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What are the best insurance companies for financed cars?

This will always depend on your unique circumstances, but the best factor in figuring out what companies have the best policies for financed cars will come down to:

  • What their A.M. Best rating is
  • What kind of discounts do they offer with full coverage
  • How responsive are they to customer claims

When finding the best auto insurance companies for financed cars insurance rates, keeping these three things in mind will help you find what kind of companies cater to your needs.

Let’s take a look at three top-rated companies.

GEICO Insurance

A.M. Best Rating: A++

NAIC Rating: High level of consumer satisfaction

BBB Rating: A+

GEICO is the second-largest insurance company in the U.S.

With its cheap rates and simple-to-use claims system, GEICO is a smart choice for most drivers.

According to the J.D. Power 2021 U.S. auto insurance study, GEICO earned a satisfaction ranking above the regional average in California, the Central Region, and New England.

GEICO’s auto insurance reviews are largely positive, indicating a reliable claims process and helpful agents that take the time to make sure your claim is processed as smoothly as possible.

As a full-service provider, GEICO offers six standard types of car insurance:

  • Liability auto insurance
  • Collision insurance
  • Comprehensive car insurance
  • Medical payments
  • Personal injury protection
  • Uninsured/underinsured motorist coverage

With GEICO auto insurance both collision and comprehensive coverage are required to be eligible for their auto policies.

Here is a breakdown of GEICO coverage:

TypeCovers
LiabilityIncludes coverage for bodily injury and property damage; provide protection if you're at fault in an accident and cause injury or damage to another person or their property
CollisionHelps repair your vehicle when it hits or is hit by another vehicle or object; you can use collision whether you're at fault or not
ComprehensiveHelps repair your vehicle when it hits or is hit by another vehicle or object; you can use collision whether you're at fault or not
Medical payments/ personal injury protectionAssists with medical expenses for you, relatives, and possibly passengers as a result of an accident; the state will determine which coverage is offered
Uninsured/underinsured motoristHelps protect you if you're involved in an accident with someone who doesn't have enough insurance to pay for your damages; these coverages may help cover your injuries or property damage
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Your rates are affected by the types of coverages, limits, and deductibles you choose. Since financing a car requires more than just a standard liability policy, this will affect how much you pay for your premium.

GEICO does offer a wide variety of discounts to help offset some of these higher costs.

Discounts include:

  • Vehicle Equipment Discounts including: Air Bag Discount, Anti-Lock Brakes Discount, Anti-Theft System Discount, Daytime Running Lights Discount, and New Vehicle Discount
  • Discounts for Driving History and Habits including: Five-Year Accident-Free Good Driver Discount, and Seat Belt Use Discount
  • Driver’s Education Discounts including: Defensive Driving Discount, Driver’s Education Discount, and Good Student Discount
  • Driver Affiliation Discounts including: Emergency Deployment Discount, Federal Employees Discount (Eagle Discount), Membership and Employee Discounts, and Military Discount
  • Customer Loyalty Discounts including: Multi-Vehicle Discount, and Multi-Policy Discount

While GEICO is a reliable option for most drivers, factors such as your age and driving history and the vehicle’s make and model can affect your rates, so what’s best for someone else might not be best for you.

State Farm

A.M. Best Rating: A++

NAIC Rating: Average level of consumer satisfaction

BBB Rating: A+

The biggest car insurance company in the nation, State Farm insures more drivers in the United States than any other provider with one out of every six policies in the U.S.

State Farm regularly ranks among the top car insurance companies in the nation. It has high ratings from experts, although customer ratings on BBB and Trustpilot are somewhat mixed.

According to J.D. Power’s 2020 U.S. auto insurance study, State Farm’s quotes and shopping experiences ranked about average compared to their competitors. The company came in at around sixth place for overall customer satisfaction.

This same study also found that people waited, on average, about 13 days for their claim to be resolved.

State Farm offers a wide range of policy types, here is a breakdown of what it offers:

  • Liability auto insurance
  • Collision insurance
  • Comprehensive car insurance
  • Medical payments
  • Personal injury protection
  • Uninsured/underinsured motorist coverage

Like GEICO, State Farm’s policies have the same full coverage for financed vehicles.

While it’s impossible to predict what your car insurance rate will be, you will generally find better-than-average rates from this company considering the discounts that are offered as well as their customer service.

State Farm also offers these add-ons:

Rental and travel expense coverage: State Farm will cover the cost of a rental car while your car is being repaired after a covered claim (coverage limit is up to policyholder).

With State Farm’s travel expenses policy, State Farm will pay for meals, lodging, and transportation (up to $500) if you get into an accident more than 50 miles from home.

It also covers the return trip to pick up your car. State Farm can also pay up to $500 towards your deductible after having an accident in a rental car.

Rideshare coverage: If you drive for Uber or Lyft, this is a great option to add on. With a standard policy commercial use of your vehicle isn’t covered.

Rideshare companies will cover damages when you are driving to pick up a person or drop them off, but won’t cover when you are waiting to accept a trip from the app.

State Farm roadside assistance: State Farm offers emergency road service that includes one hour of labor at the breakdown site, towing to the nearest repair shop, fluid delivery, jump-starts, spare tire installation, and lockout services.

Other discounts offered:

TypeCovers
Accident-FreeSave money by staying accident-free for three continuous years
Defensive Driving CourseSave 10% to 15% by taking an approved defensive driving course
Good StudentSave up to 25% by maintaining a GPA of at least 3.0 or ranking in the top 20% of your class (only available to students)
Good Driving DiscountSave money by going three years or more without moving violations or at-fault accidents (only available to new customers)
Driver Training DiscountSave money by taking a driver training course (only available for drivers under the age of 21)
Student Away At SchoolSave money when a student on your policy, who is under 25 years, moves away to school and only uses the vehicle while at home for vacations or holidays
Vehicle SafetySave up to 40% on MedPay coverage if your car was made after 1994 (depends on the make and model)
Passive RestraintSave up to 40% on MedPay coverage if your car was made after 1993 and has factory-installed airbags, seat belts, and other passive restraint systems
Anti-TheftSave money if your car is equipped with an alarm or other approved anti-theft device
Multiple AutoSave up to 20% if two or more cars in your household are insured by State Farm and owned by related individuals
Multiple LinesSave up to 17% by bundling your car insurance with one of State Farm's other insurance products, such as life, renters, condo, or homeowners insurance
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Though paying for full coverage car insurance is sometimes more expensive than state minimum liability, there are ways to save on auto insurance while still meeting loan requirements.

With the numerous discounts offered by State Farm, these policies become a huge draw for budget-conscious drivers.

Progressive

A.M. Best Rating: A+

NAIC Rating: Average level of consumer satisfaction

BBB Rating: A-

Progressive is one of the most well-known names in the insurance industry. As the third-largest automobile insurer in the U.S., it covers millions of drivers each year.

Progressive auto insurance reviews vary. According to the NAIC, A.M. Best gives Progressive an A+ rating in financial strength, and the Better Business Bureau rates the insurer highly at A-.

While many people find affordable premiums with Progressive, Progressive reviews are mixed in terms of customer service. According to J.D. Power’s 2020 U.S. auto insurance study, Progressive came in 16th place out of 23 companies.

The study found that it took, on average, about 13 days to repair a vehicle after a claim had been processed.

Progressive offers the following policies for financed drivers:

  • Bodily injury and property damage liability
  • Collision insurance
  • Comprehensive car insurance
  • Medical payments
  • Personal injury protection
  • Underinsured/uninsured motorist coverage

Additionally, Progressive offers a few extra types of coverage. These add-ons are one reason why Progressive insurance draws in its customer base.

TypeCovers
Roadside AssistanceThis includes towing, lockout services, flat tire changes, and fuel delivery
Roadside AssistancePays for the difference between your totaled car’s market value and the amount you have left on your loan; will only cover up to 25% of the current value of your car
Loan/Lease PayoffCovers about $30 to $50 per day for a rental car if your car has been in a covered accident
Custom Parts and Equipment ValuePays for replacement items that you’ve added to your car
Rideshare CoverageExtends your coverage for when you’re waiting around on the app to get a trip
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While many people find affordable premiums with Progressive, to help you save, Progressive offers several discounts, stating that 99% of policyholders are eligible for at least one discount. 

  • Multi-Policy: save around 5% if you decide to bundle home and auto insurance or another type of coverage
  • Multi-Car: save around 12% if you have more than one car listed on your Progressive policy
  • Continuous Insurance: earn a discount if you are consistently insured with no gaps or cancellations
  • Teen Driver: earn a discount if you add a driver to your policy who is 18 years old or younger
  • Good Student: save if you have a student on your policy who maintains a “B” average or better
  • Distant Student Discount: get a lower premium if the full-time student on your policy lives more than 100 miles from home and does not have a vehicle while away
  • Homeowners: earn 10% off if you are a homeowner
  • Online Quote: save about 4% if you get an online Progressive quote
  • Sign Online: save about 8.5% if you choose to sign your documents online
  • Paperless: lower your payment by choosing to receive documents via email
  • Pay in Full: save on car insurance by paying your six-month policy upfront
  • Automatic Payment: get a lower rate by setting up automatic payments from your checking account
  • Snapshot: tailors your policy price to the way that you drive, and a deductible savings bank earns you $50 toward your next deductible for every six-month period without an accident or ticket

Progressive’s auto insurance reviews that disclose savings, were found to have saved an average of $137/mo. However, many things can influence and impact these exact savings and rates. The state you live in will also influence how much your rates will be affected.

Best Auto Insurance Companies for Financed Cars: The Bottom Line

While both Progressive and State Farm offer comprehensive savings and good customer service ratings, GEICO is by far the clearer option when looking for the best insurance for financed cars.

With both its A.M. Best score as well as its BBB score both rating A++, GEICO’s superior claims process and multiple bundling options to choose from to help save you money are what make GEICO stand above the rest.

Not only is GEICO conscious of making sure its customers are happy and satisfied with its service, but the company also makes it a mission to help people save on their policies.

By finding the best car insurance for full coverage, and the right provider for you, we recommend getting auto insurance quotes from multiple insurers so you can compare coverage and rates. Use our free and easy-to-use tool for quick comparisons by entering your ZIP code below.

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