Best and Cheapest Car Insurance for Drivers With Bad Credit


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By Rachael Brennan
Reviewed byMark Friedlander
Contributions by6+ experts
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By Rachael Brennan
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Reviewed byMark Friedlander
Edited byVictoria Copans
Contributions by6+ experts
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Updated: May 20, 2024

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Finding affordable car insurance can be tricky when you have a poor credit history. Insurance providers consider your credit history to calculate a credit-based insurance score, among other criteria, to determine your premium, so a poor credit history can mean higher insurance costs.

However, each insurer has its own proprietary underwriting process, so the impact of your credit score on your insurance costs can vary significantly across different companies. It's always a good idea to check prices and compare quotes from different insurance companies to find the best deal, especially if you have a poor credit score.

Key Takeaways

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The cheapest insurers, on average, for drivers with poor credit are Nationwide and GEICO. A full coverage policy with Nationwide costs our sample driver $1,374 per year.

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The cheapest company depends on where you live. We recommend looking at the cheapest insurance companies by state.

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Actuarial data shows that drivers with poor credit are more likely to file insurance claims, so they pay higher rates as a result. But you can still save by comparing quotes and taking advantage of discounts.

Why Trust MoneyGeek?
We gathered quotes from Quadrant Information Services and state insurance departments to determine the best and cheapest premium costs for drivers with poor credit. To recommend the best providers, we accounted for customer satisfaction, affordability, claim satisfaction and financial stability with a weighted ranking system.

529,578Quotes Analyzed
 
67Companies Compared
 
897ZIP Codes

Cheapest Car Insurance Companies for Drivers With Poor Credit

Drivers with less-than-stellar credit can still find affordable coverage, with Nationwide and GEICO offering the two most cost-effective options on average.

  • Nationwide: $1,374 annually and $115 monthly
  • GEICO: $1,775 annually and $148 monthly

Drivers with bad credit usually pay more for car insurance because insurance companies view them as a higher risk. This is because actuarial data shows drivers with poor credit are likelier to file insurance claims.

Exploring the most affordable car insurance providers for those with a poor credit history will help you obtain necessary coverage without overpaying. Use the table below to find options based on your age and desired coverage level.

Data filtered by:Results filtered by:
Age Group:
Age Group:30-59
Coverage:
Coverage:100/300/100 Full Cov. w/$1,000 Ded.
NationwideAnnual Premium$1,374Monthly Premium$115
GEICOAnnual Premium$1,775Monthly Premium$148
AllstateAnnual Premium$2,008Monthly Premium$167
TravelersAnnual Premium$2,302Monthly Premium$192
FarmersAnnual Premium$2,587Monthly Premium$216
ProgressiveAnnual Premium$2,905Monthly Premium$242
State FarmAnnual Premium$3,374Monthly Premium$281

Cheapest Car Insurance Companies for Poor Credit by State

MoneyGeek found that Nationwide offers the cheapest car insurance rates in 14 states for drivers with bad credit. GEICO offers the cheapest rates for poor credit drivers in four states — Colorado, Connecticut, Delaware and Michigan — and the District of Columbia.

Some regional insurers, such as Concord Group and American Family, offer competitive rates in certain states but are not available nationally. However, the cheapest rates available can vary depending on your individual factors, such as your driving record, age and location. Always get quotes from multiple insurers in your region to ensure you're getting the best possible rate.

Discover how premiums can change based on your location, preferred coverage and age using the table below.

Data filtered by:Results filtered by:
Coverage:
Coverage:Full Coverage
Age Group:
Age Group:30-59
AlabamaCompanyNationwideAnnual Premium$1,033Monthly Premium$86
AlaskaCompanyAllstateAnnual Premium$1,140Monthly Premium$95
ArizonaCompanyRoot Insurance CompanyAnnual Premium$868Monthly Premium$72
ArkansasCompanyAlfaAnnual Premium$1,122Monthly Premium$93
ColoradoCompanyGEICOAnnual Premium$1,111Monthly Premium$93
ConnecticutCompanyGEICOAnnual Premium$1,076Monthly Premium$90
DelawareCompanyGEICOAnnual Premium$1,459Monthly Premium$122
District of ColumbiaCompanyGEICOAnnual Premium$1,475Monthly Premium$123
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MONEYGEEK EXPERT TIP

In California, Hawaii, Massachusetts and Michigan, insurers are not allowed to use your credit history to determine your premiums. Since credit histories are not considered in the above states, they are not included in the table above.

Insurers increase premiums for drivers with bad credit due to the increased risk of them filing a claim, according to the National Association of Insurance Commissioners (NAIC). In states that allow credit-based insurance scores, FICO notes that 95% of personal insurers use them to determine applicants' risk.

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Best Car Insurance Companies for Drivers With Poor Credit

While an affordable premium is an important factor when selecting an insurer, it’s equally important to opt for a reputable provider that offers great customer service. MoneyGeek found that the best car insurance provider for drivers with poor credit is Nationwide followed by Travelers and GEICO. However, the best choice for you depends on your needs.

Nationwide

Annual Premium Cost: $1,374

Nationwide stands out for drivers with bad credit because of its unique features, like accident forgiveness, which prevents your rates from increasing after your first at-fault accident. Additionally, the company's roadside assistance program is valuable if you experience car troubles on the road. It also offers a range of discounts, such as savings for bundling auto and home insurance and for cars equipped with anti-theft systems.

Nationwide's affordable rates and comprehensive coverages make it the prime choice for drivers mindful of their budget, especially with less-than-perfect credit.

For more detailed insight, read MoneyGeek's Nationwide review.

Travelers

Annual Premium Cost: $1,755

Travelers offers various coverage options that cater to diverse needs, making it an accessible choice for drivers with poor credit. The company provides unique coverages like new car replacement, which can replace your car with a brand new one of the same make and model in the event of a total loss. Additionally, Travelers' accident forgiveness program could prevent your rates from increasing after your first accident. It also offers several discounts to help policyholders save, such as its Safe Driving discount that rewards accident-free driving and a good student discount, catering to young drivers with good grades.

Choosing Travelers can be wise for drivers with bad credit who are looking for an insurer that balances ample coverage with opportunities to save money.

For more information on the company, read MoneyGeek's Travelers review.

Car Insurance Companies With No Credit Check

When you have bad credit, it’s tempting to veer towards no-credit-check car insurance companies. After all, it means your premiums will not be impacted by your credit but rather by other factors, such as your age, location and more.

Not many major companies skip credit checks, but you may be able to find a local insurer in your area that does. Certain states also prohibit insurers from using your credit data to determine rates: California, Hawaii, Massachusetts and Michigan.

Why Credit Scores Impact Insurance Rates

Your credit history, which includes your credit score, can affect your insurance premium. Actuarial data shows that people with lower credit scores are more likely to file claims, so insurance companies use credit-based insurance scores to assess risk (except in states that ban this practice). This means that people with poor credit histories are considered high-risk drivers and are more likely to pay higher premiums, so good drivers will not subsidize bad drivers.

There are a few things you can do to improve your credit score and credit history:

  • Pay your bills on time
  • Keep your credit utilization low
  • Dispute any errors on your credit report

Increasing your credit score is not a quick process, but if you follow the above steps, you'll see improvements over time.

How Much Does Your Credit Score Impact Your Insurance Premium?

Your credit history, which includes your credit score, can influence your insurance premiums in most states — better credit histories and higher scores can lead to lower rates, while lower scores may mean you'll pay more.

For example, with Nationwide, someone with an excellent credit score might pay around $873 per year on average, whereas someone with a poor score could pay about $1,374 annually.

However, your credit score isn't the only factor that matters — insurers also consider factors like your age, driving history and the type of car you drive to determine how much you'll pay for car insurance. To better understand how car insurance works, keep these variables in mind along with your credit score.

Data filtered by:Results filtered by:
Age Group:
Age Group:30-59
Coverage:
Coverage:100/300/100 Full Cov. w/$1,000 Ded.
NationwidePoor Credit Score$1,374Below Fair Credit Score$1,264Fair Credit Score$1,147Good Credit Score$1,001Excellent Credit Score$873
GEICOPoor Credit Score$1,775Below Fair Credit Score$1,470Fair Credit Score$1,263Good Credit Score$1,065Excellent Credit Score$888
AllstatePoor Credit Score$2,008Below Fair Credit Score$1,692Fair Credit Score$1,461Good Credit Score$1,252Excellent Credit Score$1,067
TravelersPoor Credit Score$2,302Below Fair Credit Score$1,836Fair Credit Score$1,499Good Credit Score$1,166Excellent Credit Score$944
FarmersPoor Credit Score$2,587Below Fair Credit Score$2,039Fair Credit Score$1,678Good Credit Score$1,460Excellent Credit Score$1,205
ProgressivePoor Credit Score$2,905Below Fair Credit Score$1,986Fair Credit Score$1,580Good Credit Score$1,229Excellent Credit Score$944
State FarmPoor Credit Score$3,374Below Fair Credit Score$2,379Fair Credit Score$1,702Good Credit Score$1,212Excellent Credit Score$903

Credit Score Ranks

How to Find the Best Car Insurance With Poor Credit

Below are some tips to help you find the best car insurance even if you have poor credit.

1
Reduce Your Coverage

Determine how much insurance you need to avoid buying excessive coverage. After all, if your circumstances have changed, you may have a lower risk of potential claims. Evaluate your situation carefully prior to purchasing insurance to ensure you’re only getting the coverage you need.

2
Raise Your Deductibles

With a full coverage insurance policy, you have comprehensive and collision insurance to protect your vehicle. Each has a deductible you must pay for a claim before your insurance company covers the remaining cost to repair or replace your vehicle. The higher the deductible on collision, comprehensive or both, the lower your monthly payments will be. By taking on a higher portion of the repair costs in the event of an at-fault accident or other non-collision incident that damages your vehicle, you can save on insurance payments in the long run.

3
Consider Your Vehicle

The actual cash value of your car directly affects your premium. Higher-value vehicles typically have higher premiums, while insuring a low-value car that has lower repair and replacement costs can lead to lower premiums.

4
Get Multiple Quotes

Shopping around for quotes from different insurance providers allows you to compare prices and coverage options. Take the time to get multiple quotes and choose the one that offers the best value for your needs.

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Jun 13, 2024

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Ways to Save on Car Insurance With Poor Credit

Just because your credit rating is low doesn’t mean you can’t shop for the best possible auto insurance. There are several ways to lower your insurance rates, including:

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    Take Advantage of Discounts

    Most insurance companies offer a wide variety of discounts to their customers. Bundling multiple policies with a company, such as auto insurance with homeowners or renters insurance, can save you a substantial amount per year. The multi-vehicle discount is another very common discount offered by national and regional car insurers. Good driving discounts, employer discounts and loyalty discounts are all excellent ways to help reduce your insurance costs.

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    Pay Your Full Annual Premium at Once

    Many insurance companies offer discounted rates to policyholders who pay their entire premium upfront rather than in monthly or quarterly installments.

Five Tips for Improving Your Credit Score

If you are a driver with a poor credit record, working to improve your credit is the best way to reduce your insurance premiums. There are a number of ways to work toward improving your credit score, including:

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    Set up automatic bill pay

    If your credit score is low because your payments are consistently late, setting up automatic payments is an easy way to address that problem.

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    Pay off balances every month

    One of the best ways to reduce your credit utilization is to pay off your full balance on a monthly basis. This can also help you avoid interest payments, saving you money over time.

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    Work with credit agencies to bump your score

    Many credit agencies will allow you to add regular, on-time rent and utility payments to your credit report. Call the agencies directly and ask how to make sure your positive payment history is working in your favor.

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    Don’t apply for new accounts for a while

    Every application you make for additional credit causes a hard inquiry on your credit report, temporarily lowering your score. If you need to raise your credit score, try not to open any new accounts for a while to prevent those hard inquiries.

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    Dispute any errors

    You have the right to get a free copy of your credit report from the three major U.S. credit bureaus: Experian, Equifax and TransUnion. It is worth the time to get these reports and go over them to make sure everything is correct. If a creditor is erroneously reporting you as delinquent or you have been the victim of identity theft, you can clean up your credit report and see an increase in your credit score.

FAQ About Car Insurance for Drivers With Bad Credit

Getting auto insurance with bad credit can be a challenge if you live in a state where insurers are allowed to use your credit history to determine premiums. Our answers to some of the most frequently asked questions about auto insurance for bad credit drivers provide more insight on this topic.

Does bad credit affect your car insurance?
Do you need a credit score to get car insurance?
Why is car insurance based on credit scores?

Expert Advice: Credit Score Influence on Insurance Rates

  1. Why do companies use credit as one factor to set car insurance rates?
  2. What other impacts can a driver’s credit score have on their finances?
  3. What steps can drivers take to improve their credit and lower their car insurance premiums?
  4. What can drivers do to offset a low credit score when shopping around for car insurance?
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About Rachael Brennan


 Rachael Brennan headshot

Rachael Brennan is a professional freelance writer. She has been published on a number of websites, including Adweek, Glamour, and Cracked. She has also worked in the insurance industry for more than a decade, earning her P&C license in all 50 states and her Life, Health, and AD&D license in New York and the surrounding states.


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