Getting Car Insurance for Bad Credit
- Expertise: Auto insurance, home insurance and renters insurance
- Education: Sonoma State University (BA in English)
Aaron Besson has worked at LendingTree for more than seven years and has been a staff writer for the last five years. He specializes in producing research-backed content about auto, home and renters insurance. Aaron enjoys the deep dig into insurance data to get the right answers to hard questions. His work has been cited by CBS, iHeart Radio, the Sacramento Bee and Yahoo.
Car insurance companies in many states use credit scores to calculate car insurance quotes, as they see a correlation between having poor credit and a higher risk of filing a claim. This can make finding an affordable policy difficult.
Among national insurance companies, Geico offers affordable car insurance for drivers with bad credit at an average annual rate of $3,083 for a full coverage policy.
Best, cheap car insurance for drivers with bad credit
If you’re looking for cheap auto insurance with poor credit, MMG has the lowest annual rate for a full-coverage policy, $1,453 — however, MMG only provides coverage in select states on the East Coast.
For companies that provide car insurance nationwide, Geico has the cheapest average rate of $3,083 a year for drivers with poor credit.
Cheapest car insurance companies for drivers with poor credit
| Company | Good credit | Poor credit | % difference |
|---|---|---|---|
| MMG | $902 | $1,453 | 61% |
| Concord | $977 | $1,624 | 66% |
| Acuity | $1,361 | $2,037 | 50% |
| Grange | $1,638 | $2,072 | 26% |
| Westfield | $1,481 | $2,097 | 42% |
| Hanover | $1,372 | $2,116 | 54% |
| USAA | $1,207 | $2,167 | 80% |
| Pemco | $1,483 | $2,302 | 55% |
| Texas Farm Bureau | $1,036 | $2,341 | 126% |
| Umialik | $1,602 | $2,446 | 53% |
| Country Financial | $1,600 | $2,490 | 56% |
| Co-Op | $1,635 | $2,732 | 67% |
| Erie | $1,289 | $2,825 | 119% |
| UAIC | $2,886 | $2,886 | 0% |
| Safeway | $3,080 | $3,080 | 0% |
| Geico | $1,942 | $3,083 | 59% |
| Nationwide | $2,271 | $3,148 | 39% |
| American Family | $1,920 | $3,170 | 65% |
| Plymouth Rock | $2,236 | $3,178 | 42% |
| Farm Bureau | $1,939 | $3,274 | 69% |
| Progressive | $2,040 | $3,458 | 70% |
| Travelers | $1,971 | $3,508 | 78% |
| Grinnell Mutual | $2,015 | $3,541 | 76% |
| Shelter | $1,927 | $3,835 | 99% |
| Allstate | $2,620 | $4,208 | 61% |
| Auto-Owners | $1,690 | $4,222 | 150% |
| Farmers | $3,091 | $4,890 | 58% |
| The Hartford | $2,688 | $5,545 | 106% |
| State Farm | $1,505 | $5,601 | 272% |
| Amica | $2,548 | $5,878 | 131% |
| NJM | $3,382 | $6,167 | 82% |
| Nodak | $2,917 | $6,681 | 129% |
| AAA | $3,835 | $7,725 | 101% |
Rates are for full-coverage car insurance for a 30-year-old male.
Having a poor credit score increases your car insurance rate by an average of 77%. Poor credit will continue to affect your car insurance rates until you improve it, though comparing quotes from several companies can help.
When comparing quotes from different providers, make sure the ones that interest you provide coverage in your area.
Other factors that affect your car insurance rates include your:
- ZIP code
- Driving history
- Insurance claim history
- Vehicle make and model
- Age
Car insurance rates for drivers with bad credit by state
Of states that use credit scores to calculate car insurance quotes, Washington has the cheapest rate for full coverage at $1,899 a year. This is 24% higher than the state’s average rate of $1,534 for drivers with good credit.
Cheapest rates for car insurance with poor credit by state
| State | Good credit | Poor credit | % difference |
|---|---|---|---|
| Alabama | $1,979 | $3,491 | 76% |
| Alaska | $1,635 | $2,864 | 75% |
| Arizona | $2,683 | $4,907 | 83% |
| Arkansas | $1,879 | $3,504 | 86% |
| California | $1,867 | NA | NA |
| Colorado | $2,542 | $4,858 | 91% |
| Connecticut | $2,346 | $4,657 | 99% |
| Delaware | $2,482 | $4,227 | 70% |
| Florida | $2,990 | $6,148 | 106% |
| Georgia | $1,832 | $3,584 | 96% |
| Hawaii | $1,643 | NA | NA |
| Idaho | $1,227 | $2,060 | 68% |
| Illinois | $2,109 | $3,933 | 86% |
| Indiana | $1,511 | $3,099 | 105% |
| Iowa | $1,663 | $3,124 | 88% |
| Kansas | $1,991 | $3,856 | 94% |
| Kentucky | $2,295 | $5,010 | 118% |
| Louisiana | $2,719 | $5,165 | 90% |
| Maine | $1,100 | $2,289 | 108% |
| Maryland | $2,051 | $3,765 | 84% |
| Massachusetts | $2,068 | NA | NA |
| Michigan | $4,638 | NA | NA |
| Minnesota | $1,884 | $4,685 | 149% |
| Mississippi | $1,796 | $3,318 | 85% |
| Missouri | $1,908 | $3,659 | 92% |
| Montana | $2,174 | $3,712 | 71% |
| Nebraska | $1,909 | $3,581 | 88% |
| Nevada | $2,958 | $5,200 | 76% |
| New Hampshire | $1,146 | $2,244 | 96% |
| New Jersey | $2,236 | $5,310 | 137% |
| New Mexico | $1,953 | $3,374 | 73% |
| New York | $2,030 | $5,018 | 147% |
| North Carolina | $1,305 | $2,465 | 89% |
| North Dakota | $1,858 | $3,601 | 94% |
| Ohio | $1,329 | $2,415 | 82% |
| Oklahoma | $2,119 | $3,681 | 74% |
| Oregon | $2,115 | $4,024 | 90% |
| Pennsylvania | $1,861 | $3,643 | 96% |
| Rhode Island | $2,636 | $4,772 | 81% |
| South Carolina | $1,808 | $3,587 | 98% |
| South Dakota | $2,016 | $3,866 | 92% |
| Tennessee | $1,554 | $3,011 | 94% |
| Texas | $1,833 | $4,217 | 130% |
| Utah | $2,261 | $4,213 | 86% |
| Vermont | $1,232 | $2,097 | 70% |
| Virginia | $2,110 | $2,110 | 0% |
| Washington | $1,534 | $1,899 | 24% |
| Washington DC | $2,082 | $5,562 | 167% |
| West Virginia | $1,701 | $3,105 | 83% |
| Wisconsin | $1,540 | $2,441 | 59% |
| Wyoming | $1,437 | $2,313 | 61% |
Rates are for full-coverage car insurance for a 30-year-old male.
Four states prohibit the use of credit scores when calculating car insurance quotes. They are:
- California
- Hawaii
- Massachusetts
- Michigan
Some other states limit the use of credit scores for quote purposes. They are:
- Maryland: Credit scores can’t be used to deny, cancel or refuse to renew a policy, nor increase rates at renewal. They can be used when calculating new policies, however.
- Oregon: Insurers can’t cancel or deny a car insurance policy due to poor credit.
- Utah: Credit rating can’t be the sole reason for denying a car insurance application. Also, credit data can only be used to offer policy discounts, not increase rates.
Why do car insurance companies use credit history?
Car insurance companies use credit-based insurance scores (CBIS) to calculate quotes because they help match the cost of a car insurance policy with the risk of a claim being filed. According to a 2007 study by the Federal Trade Commission, credit-based scores are effective predictors of risk under automobile policies.
Unlike the credit score that lenders use when you finance a purchase, the credit-based insurance scores providers use to come up with quotes aren’t available for public view. You can, however, request to learn which of the three credit reporting agencies — Experian, Equifax or Transunion — they got your credit report from.
How to save on car insurance with bad credit
The best way to get affordable car insurance if you have bad credit is to shop around and improve your credit score. Other ways to save include:
Shop around
Insurance companies place different risk values on bad credit when calculating car insurance quotes. One company may consider bad credit a higher or lower risk than another. By comparing car insurance quotes from several companies, you stand a good chance of finding an affordable quote.
Improve your credit score
This can take a while, but it also has the biggest effect on reducing your car insurance rates. Paying your bills and loans on time and keeping credit card balances low go a long way toward getting you cheap rates.
Explore discounts
Car insurance companies offer discounts to be competitive. When considering an insurer, see or ask if you qualify for any discounts. You can get discounts on your car insurance by bundling it with a life, home or renters insurance policy. There are also discounts for having a good driving record, paying your rate electronically and many others.
Increase your deductible
The higher your car insurance deductible, the lower your rate will be. If you can afford to pay a higher deductible in the event of an accident, you can save a lot of money over time.
Methodology
Unless stated otherwise, we used thousands of car insurance quotes for a 30-year-old man with both poor and good credit for the rate information shared on this page. This sample driver has no tickets, accidents or DUIs and drives a 2015 Honda Civic EX.
The following coverage limits were used for the sample driver’s policy:
- Bodily injury liability: $50,000 per person, $100,000 per accident
- Property damage liability: $25,000
- Uninsured motorist: $50,000 per person, $100,000 per accident, where required by law
- Personal injury protection: minimum limits, where required by law
- Collision: $500 deductible
- Comprehensive: $500 deductible