You can get car insurance with a less-than-perfect credit score, but it usually costs more than if you had great credit. In fact, our research reveals that drivers with poor credit can expect car insurance rates more than double that of their counterparts with excellent credit scores.
Concord and USAA stand out as providing the most cost-effective insurance premiums for drivers with a poor credit history. Concord's annual rates average $1,199, while USAA offers yearly premiums beginning at $849. Despite these cheaper options, it's crucial to note that even the most affordable policies for drivers with poor credit tend to be higher than those for drivers with great credit.On average, they’re 64% higher, or $636 more per year, in our study.
While increasing your credit score is a good way to secure more favorable rates, there are other strategies you can use to get the best deal on car insurance with bad credit. It's important to cast a wide net by comparing quotes from a variety of insurance providers in search of the most affordable option. You can also search for insurers that do not factor credit ratings into their pricing, though this does not guarantee lower premiums. In essence, the quest for affordable car insurance with poor credit requires careful comparison and consideration of all available options.
This article covers:
Cheapest car insurance for drivers with bad credit
At a modest $58 per month, Concord Insurance rises to the top as the most affordable choice for motorists with poor credit. This rate is closely followed by USAA, offering an average monthly rate of $77. That translates to an annual premium of $924 — a highly competitive figure for those grappling with a subpar credit score.
Concord only offers coverage in selected states, though. And USAA limits its services to present and past military personnel, as well as some of their family members.
For those seeking wider accessibility, consider American Family. With operations spanning 19 states, it presents a viable option for many. American Family's average minimum-coverage rate stands at $119 a month, while the full-coverage rate is a reasonable $197. This flexibility allows potential customers to find a balance that suits their coverage needs and financial situation. It's always worth exploring all options to secure the best insurance policy for you.
|Rates are for a 35-year-old male with a good driving record and poor credit. Rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.|
By choosing the cheapest car insurance company in our study (Concord) compared to the most expensive insurer in our study (CSAA), drivers could potentially save thousands of dollars per year. That’s why it’s a good idea to compare quotes from several car insurance companies, especially if you have poor credit.
Cheapest minimum-coverage car insurance rates for drivers with poor credit by state
While analyzing data for minimum-coverage car insurance, our study shows that Wyoming has the lowest average rate for drivers with poor credit. New York has the highest rate for drivers with poor credit in our study, with an average monthly cost of $362.
|State||Average monthly rate||Cheapest company|
|Colorado||$173||State Farm ($119)*|
|District of Columbia||$126||State Farm ($117)*|
|Georgia||$99||GA Farm Bureau ($64)|
|Idaho||$70||State Farm ($48)*|
|Illinois||$129||State Farm ($96)*|
|Kentucky||$183||State Farm ($90)|
|Louisiana||$187||LA Farm Bureau ($161)*|
|Montana||$102||State Farm ($69)*|
|Nevada||$238||State Farm ($139)|
|New Hampshire||$81||Hanover ($53)*|
|New Jersey||$198||Allstate ($134)|
|New Mexico||$109||State Farm ($79)|
|New York||$362||GEICO ($192)*|
|North Carolina||$58||Erie ($48)|
|North Dakota||$76||American Family ($48)*|
|Oregon||$138||State Farm ($74)*|
|Pennsylvania||$148||State Farm ($78)*|
|Rhode Island||$261||Nationwide ($161)*|
|South Carolina||$146||GEICO ($86)*|
|South Dakota||$88||American Family ($52)*|
|West Virginia||$109||Progressive ($69)|
|Wisconsin||$123||State Farm ($79)*|
|Rates are for minimum-coverage car insurance for a 35-year-old male with a good driving record and poor credit.
*USAA provides a cheaper rate if you qualify for membership
Cheapest full-coverage car insurance rates for drivers with poor credit by state
North Carolina has the lowest average full-coverage rate for drivers with poor credit — $111 a month. New York has the highest average rate, $602 a month.
District of Columbia
|State||Average monthly cost||Cheapest company|
|Arizona||$497||American Family ($226)|
|Colorado||$311||State Farm ($224)*|
|Washington, D.C.||$277||State Farm ($227)*|
|Georgia||$195||GA Farm Bureau ($118)|
|Idaho||$146||State Farm ($103)*|
|Illinois||$271||Country Financial ($167)|
|IIndiana||$191||American Family ($167)*|
|Kansas||$221||American Family ($170)*|
|Kentucky||$351||State Farm ($190)|
|Mississippi||$249||Farm Bureau ($171)*|
|Missouri||$332||American Family ($173)*|
|Montana||$244||State Farm ($175)*|
|Nevada||$408||State Farm ($234)|
|New Hampshire||$164||Concord ($100)*|
|New Jersey||$365||NJM ($253)|
|New Mexico||$235||State Farm ($179)*|
|New York||$602||GEICO ($351)*|
|North Carolina||$111||Erie ($88)|
|North Dakota||$230||American Family ($143)*|
|Oklahoma||$274||Farm Bureau ($182)*|
|Oregon||$231||State Farm ($119)*|
|Rhode Island||$407||Amica ($307)|
|South Carolina||$295||Farm Bureau ($198)|
|South Dakota||$264||Farmers ($127)|
|Tennessee||$197||Tennessee Farm Bureau ($143)*|
|Virginia||$192||Virginia Farm Bureau ($116)|
|Washington||$162||State Farm ($114)*|
|West Virginia||$215||Westfield ($138)|
|Rates are for full-coverage car insurance for a 35-year-old male with a good driving record and poor credit.
*USAA provides a cheaper rate if you qualify for membership
Does my credit score affect my car insurance rates?
Yes, your car insurance rates are influenced by your credit score. Our research found that having a bad credit score can more than double your insurance premium in some cases. Based on the quotes we reviewed, a driver with poor credit pays $135 per month for minimum-coverage car insurance, on average. A driver with excellent credit, on the other hand, only pays $82 a month.
Although it may seem unrelated, insurers have determined that your credit score has a high correlation with the likelihood you’ll file an auto insurance claim. It's a major factor in your insurance score. This is a controversial practice, however, and it's been outlawed in several states. According to Experian, these states currently regulate the practice:
Auto insurance companies that don’t check your credit score
Most insurers use your credit score to help determine your auto insurance premium, so the market for no-credit-check car insurance is limited. Even if you do find a cheap, no-credit-check car insurance company, its auto insurance policies may not be cheaper or a better fit for someone with poor credit. A car insurance company that doesn’t check credit scores may be more expensive than a standard insurer. This is because they know less about their customers and therefore need to have higher premiums to absorb the added risk.
Improving your credit score to get cheap car insurance
Working to improve your credit can be a good move to get cheaper premiums if you currently have a low credit score. Any increase, even if it’s modest, can lead to a decrease in insurance premiums. Here are some tips to improve your credit score:
- Make payments on time for any debt you have, such as loans and credit cards.
- Try to use less than 30% of your total credit limit. For instance, if you have a $2,000 credit limit, try to put less than $600 on your credit cards in total.
- Don’t open too many new credit card accounts in a short period of time.
- Check your credit report periodically to make sure it is correct.
If you have no credit, you’ll need to start building credit to potentially save on your auto insurance premiums. Try to open up a line of credit. Some credit cards may accept a sparse credit history. You can also build credit by getting a credit card that requires a security deposit, or become an authorized user on someone else’s credit card.
We gathered rates for one base driver across three states: Texas, New York and Illinois. We set our base driver profile as a 30-year-old man with a clean driving history. The driver owns a 2012 Honda Accord and selects the required minimum liability coverage auto insurance policy. He drives 15,000 miles annually.
For each state, we analyzed data across all providers that had data publicly available through Quadrant Information Services. Because each insurer calculates their insurance credit score differently, we use standardized tiers of credit that are consistent across companies. For our purposes, you can fall into one of five categories: excellent credit, good credit, no credit rating found, below fair credit and poor credit.
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