Buy Cheap Auto Insurance for Drivers With Bad Credit in 2024

Car insurance is usually more expensive for people with bad credit. People with bad credit pay 66% more on average for coverage.

If you live in a state that does not allow insurance companies to take your credit score into account, your rates will not be impacted by bad credit. Still, most states allow insurance companies to use credit scores to determine policyholders’ rates.

Certain insurance companies offer cheap car insurance coverage despite a person’s bad credit. Nationwide offers the cheapest bad credit car insurance coverage, but Geico and USAA also offer competitive rates. To find the best car insurance rates for people with bad credit, you’ll need to compare quotes from multiple providers.

Who offers the best cheap car insurance for people with bad credit?

On average, people with credit scores from 300 to 579 pay just over $100 more monthly for car insurance than those from 740 to 799. Despite this, certain companies offer more competitive rates for individuals in the poor credit range.

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Who offers the cheapest car insurance in the U.S. for people with bad credit?

Farm Bureau auto insurance offers the cheapest bad credit auto insurance on a national level. Here’s how the average annual full coverage car insurance rates for some of the major U.S. insurance companies compare.

For a full coverage policy, Farm Bureau charges around $2,555 annually. Geico rates are comparable at $2,619 per year, and Nationwide charges an average of $2,698.

Which companies offer cheap car insurance for drivers with bad credit?

In some states, Geico auto insurance offers the cheapest coverage rates for people with a credit score of 579 or less. (For more information, read our “Buy Cheap Auto Insurance by State“)

You may find that rates with Geico, Nationwide, and USAA are comparable based on your unique factors. The best way to find cheap car insurance rates is to compare quotes from multiple companies before making final coverage decisions.

Geico offers the cheapest rates among major insurance providers at around $157 per month.

Nationwide auto insurance rates are similar to Geico’s at $167 per month. While USAA auto insurance also offers competitive rates for people with bad credit, individuals must be affiliated with the military to qualify for coverage.

What’s the best small insurance company for people with bad credit?

Grange Insurance is the most affordable car insurance company for people with bad credit. Still, the company only sells policies in Alabama, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin.

Drivers with bad credit pay around $1,931 annually for coverage with Grange, which is around 37% less than other companies.

Grange offers add-ons for coverage, like new car replacement and GAP insurance, to help individuals customize their insurance policies.

Read more:

• Buy Cheap Minnesota Auto Insurance
• Buy Cheap South Carolina Auto Insurance
• Buy Cheap Tennessee Auto Insurance
• Buy Cheap West Virginia Auto Insurance
• Buy Cheap Kentucky Auto Insurance

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Which company offers the best coverage for military families with bad credit?

If you are affiliated with the military, you may be able to get cheap auto insurance with bad credit with USAA.

Drivers with bad credit tend to pay around $2,018 each year for car insurance with USAA, making USAA the second-cheapest car insurance provider to people with bad credit, behind Grange Insurance.

How do I know what I’ll pay for car insurance based on my credit score?

Each company puts a different amount of weight on how much your credit score will impact your car insurance rates. The table above gives you a good idea of what you may be paying with the top insurance companies based on your credit history.

Keep in mind that working on your credit score can vastly improve your rates for car insurance. The higher your credit score, the more trustworthy you are in the eyes of an insurance company.

How much does your credit score impact your insurance premium?

The degree to which your credit score will impact your insurance rates will vary from one company to the next. Your credit is just one factor that companies consider, along with your age, gender, ZIP code, and driving history.

The annual rate for people with bad credit is often over $1,400 more than for people with excellent credit.

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Are there any companies that don’t check credit scores?

California, Hawaii, and Massachusetts do not allow insurance companies to use a person’s credit score as a factor when determining auto insurance rates. This makes it easier for people to find cheap car insurance with bad credit.

Insurance companies can use a person’s credit score in other states to determine rates. Still, you may be able to find competitive rates by signing up for a usage-based insurance program with an insurance company.

Usage-based coverage allows companies to track your driving habits to determine rates based on your actual time on the road. So if you’re comfortable with an insurance company tracking your acceleration, hard braking, driving speed, and other factors, you may be able to save on coverage.

Does where I live determine how much I’ll pay for car insurance with bad credit?

On average, there is a $1,520 difference between drivers with bad credit and drivers with excellent credit. Still, a person’s location could significantly impact their car insurance rates.

Full Coverage Auto Insurance Monthly Rates by State

You should shop and compare online quotes for coverage to determine how much you should pay for car insurance in your area. Using an auto insurance calculator is a good place to start.

How can I find the best car insurance for bad credit?

While a bad credit score is likely to increase your car insurance rates, you could do a few things to pay less for coverage.

First, you can change the type of coverage you have. Dropping car insurance coverage you don’t need is an effective way to lower your rates.

You can also shop online for quotes. Just because one or two companies offer you higher rates for car insurance doesn’t mean every company will. Shop online until you find a company that provides the coverage you need at a price that works with your budget.

Lastly, take your vehicle into account. You may be paying higher rates because of the car you drive. However, if you are willing to find a different vehicle, you could significantly lower your annual coverage rates.

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Are there ways to save on car insurance if I have bad credit?

Even if you have a bad credit score, you can do a few things to get cheaper car insurance rates.

Apply for Discounts

Many car insurance providers offer car insurance discounts that allow policyholders to save money on coverage. Some of the most common discounts include:

• Discount for bundling insurance policies
• Good driver discount
• Good student discount
• Safe driver discount
• Safety feature discounts
• Affiliation discounts

Car insurance discounts can help you save up to 25% on coverage. Speak to a representative of any company you’re considering to see if you qualify for discounts.

Pay for Coverage In Full

If you pay for a full year of coverage, you could save a percentage on your insurance premium.

Keep Your Driving Record Clean

A clean driving record void of traffic violations and car accidents is the best way to keep your insurance rates low. High-risk auto insurance is much more expensive.

Improve Your Credit Score

You can lower your insurance rates by improving your credit score. The best ways to do this are to pay off your debt and avoid opening new lines of credit. While it’s admirable to aim for good or excellent credit, you will see a difference if you move from bad to fair credit.

File Fewer Claims

You should only file a claim if it makes the most financial sense. Otherwise, you may end up saving a few hundred dollars on repairs to your vehicle but spending more on car insurance coverage.

When you consider filing a claim, think about how much the repairs will cost compared to how much your insurance rates could increase.

What’s the best insurance company for someone with fair credit?

Geico and USAA offer the cheapest rates for people with fair credit, but State Farm auto insurance also offers competitive rates for the same demographic.

Companies like Progressive and MetLife tend to charge higher rates for coverage, even when people have fair credit rather than bad credit.

What are the best car insurance companies for people with excellent credit?

State Farm offers the best insurance premiums to drivers with excellent credit.

Rates with State Farm are around $847 annually, while USAA coverage costs around $1,011.

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Can I get car insurance with no credit?

You don’t need a credit history to buy car insurance, but your rates will likely be higher.

As you can see, a person’s credit score can significantly impact their insurance rates.

Read more: Buying No-Credit-Check Auto Insurance: What You Need To Know

How do I find the right coverage for my car?

Before purchasing car insurance, you must know what kind of coverage you need on your vehicle. There are a few things you can consider.

Do you have a loan?

If you have a loan on your vehicle, you’re likely required to carry more than the minimum car insurance required by your state. Typically, your lienholder will also require that you have at least collision insurance and comprehensive insurance coverage.

What is your car worth?

If your vehicle is less than $4,000, it may not make sense to carry collision or comprehensive coverage. You can use Kelley Blue Book or NADA to determine your car’s value and decide whether it’s worth it to pay for additional coverage.

Which company works best for you?

Compare quotes from multiple companies to determine which one offers the best rates. Doing so will help you ensure you don’t overpay for coverage.

Why is car insurance more expensive for people with bad credit?

People with low credit scores file more claims statistically than those with good credit. Car insurance companies know this and charge higher premiums when individuals have bad credit. Therefore, as your credit score improves, you will find that your car insurance rates also improve.

It’s crucial to provide accurate information when shopping for quotes online. For example, if you have a bad credit score, don’t try to hide that information from a prospective company, as it could impact your rates and coverage options overall.

If your credit score has improved significantly and your insurance rates have stayed the same, it’s time to compare quotes from other companies to see if you can pay less for coverage.

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How can I improve my credit score?

There are several ways to improve your credit score, such as:

• Set up automatic bill pay. If your credit score is low because of late or missed payments, automatic bill pay could be an excellent way to resolve the issue.
• Pay off your balances every month. Paying your monthly balances helps reduce your credit utilization, which can make up as much as 30% of your overall score.
• Work with credit agencies. Certain credit agencies may allow your on-time payments for rent and utilities to improve your score.
• Don’t open new accounts. Inquiries to open new accounts appear as hard inquiries on your credit report. Avoid opening new accounts until your credit score has improved.
• Dispute any errors. You can get a free copy of your credit report once a year. You should take advantage of this opportunity and dispute any errors you see.

Improving your credit may take some time, but it could help you save money on your car insurance in the long run.

Car Insurance for Drivers with Bad Credit: The Bottom Line

You can expect to pay more for car insurance if you have bad credit. Still, certain companies will offer competitive rates for coverage.

Shop online and compare rates from multiple companies in your area before committing to an insurance policy. This will help ensure you don’t pay too much for coverage because of your poor credit score.

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