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J.J. Starr is an insurance and personal finance expert who has been writing for Compare.com since 2022. Her work has been published across the web, appearing on sites such as Insurify.
Prior to writing for Compare.com, J.J. was a registered banker and life insurance consultant, holding a Series 6, FINRA, and life insurance license. She also earned a master’s degree in writing from New York University.
J.J. has a passion for helping people save money by explaining complex topics like car insurance in a way that is simple and easy to understand.
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Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
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Drivers with poor credit pay higher car insurance rates — $288 per month — compared to the national average of $129. Car insurance costs more for drivers with low credit scores due to perceived higher risk by insurance companies.
Insurers link bad credit to a higher likelihood of at-fault insurance claims, so companies raise rates. That means drivers with bad credit pay premiums 122% higher than drivers with good credit.
But the cheapest companies for drivers with bad credit offer rates much lower than the national average: GEICO offers $106 per month on average, American Family costs $160, and Nationwide prices policies at $172. And other companies perform better in some locations.
GEICO is the cheapest company for drivers with bad credit in most states.
California, Hawaii, Massachusetts, and Michigan don’t allow the use of credit history to set policy rates.
Drivers with bad credit can lower their auto insurance by buying their policies through insurers offering telematics or usage-based car insurance programs.
Finding affordable coverage can be challenging if you’re dealing with bad credit, but the auto insurance companies in the table below are a good place to start. These five companies are the cheapest insurers for drivers with bad credit.
Insurance Company | Average Monthly Rate |
|---|---|
| GEICO | $106 |
| American Family | $160 |
| Nationwide | $172 |
| SafeAuto | $173 |
| Erie | $176 |
| Westfield | $178 |
| Allied | $184 |
GEICO offers significantly cheaper rates than the rest of the pack — about 34% less than the next-cheapest option, American Family. GEICO sells policies directly to customers, offers many valuable discounts, and has few local offices, which all save on overhead costs.
Still, the remaining insurers have average monthly rates within $12 of each other. These companies differ widely on coverage options, customer service, discounts, and service areas. Research your options carefully, and be sure to compare quotes from as many companies as possible.
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While there’s no single best company for all drivers with poor credit, some companies perform better than others for this group. The three companies below are a good fit for many, but you should still shop around to see which company best fits your needs and preferences.
The following companies made it on our list based on a few factors, including average premiums, discounts, customer service ratings, and more.
Average rate for drivers with bad credit: $106 per month
Compare.com rating: 4.7 out of 5
Trustpilot rating: 1.9 out of 5
BBB rating: A+
Cheaper rates than average
Higher-than-average customer satisfaction
Lots of coverage options
Hit-or-miss customer service
Gap and rideshare coverage not available
Few local agents
GEICO offers the cheapest car insurance for drivers with bad credit, based on our research. Though discount options are somewhat limited, the company’s telematics program, DriveEasy, is a great option. The company offers several ways to contact customer service, which is available 24/7.
GEICO rates tend to be favorable for many types of high-risk drivers, including those with a DUI. But the company falls behind on specialty coverage options, making it less suitable for some drivers.
Average rate for drivers with bad credit: $173 per month
Compare.com rating: 4.2 out of 5
Trustpilot rating: 3.3 out of 5
BBB rating: Not accredited
Specializes in high-risk policies
Online chat and 24/7 claims handling
Spanish and English websites and customer service
Higher-than-average number of customer complaints
Low-quality mobile app
Limited geographic availability
SafeAuto is a great option for high-risk drivers — especially those needing full-coverage policies. It also has a decent website where you can manage most policy needs, but the mobile app struggles with usability.
But in general, SafeAuto penalizes drivers with poor credit much less than many of its competitors. Its average rates for drivers with poor credit are around 50% more than rates for drivers with “excellent” scores, while overall companies double rates for these drivers on average.
Average rate for drivers with bad credit: $172 per month
Compare.com rating: 3.8 out of 5
Trustpilot rating: 1.7 out of 5
BBB rating: Profile being updated
Lower-than-average number of customer complaints
Lots of discount options
Safe driver and low-mileage telematics programs
Lower-than-average customer satisfaction
Discounts limited in some states
Not available nationwide
Nationwide offers drivers with poor credit a full range of coverage options and perks, including vanishing deductibles and total loss deductible waivers. The company also has a solid set of discounts and two telematics programs to help you save: SmartRide, which discounts premiums for good driving habits, and SmartMiles, which charges per mile.
The company has an excellent app and website, though the company somewhat struggles with customer service, and reviews cite difficulties with resolving policy issues and canceling coverage.
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Fortunately, you have quite a few ways to save money on car insurance, no matter your credit score. Consider the following tips to get cheaper car insurance now and in the future.
Tailoring your insurance coverage to your exact needs means purchasing enough coverage to protect you from financial loss while forgoing unnecessary coverage. For example, if you have an older car, you may be able to drop collision and comprehensive coverage. You might also consider raising your deductibles, which will also lower your premiums.
You can review your policy with your insurance agent to ensure you have adequate coverage without overpaying.
You likely qualify for quite a few discounts, no matter your credit history — and they’re a highly effective way to get cheap car insurance. Each insurer offers its own set of discounts, and some offer more savings than others for the same discount.
Here are some of the best discounts for drivers with bad credit:
Bundling (aka multi-policy)
Maintaining a pristine driving record is an excellent strategy for any driver — especially those with poor credit. A clean record lowers rates to begin with and also earns a safe driving discount, which can save more than 20% with some insurers.
But if you have issues on your record, that’s okay. Try to avoid future tickets or accidents by practicing safe driving habits. Consider a telematics program that rewards safe driving to help you achieve your goals.
Improving your credit is challenging but possible. Even small steps to improve your score can raise your credit quickly — credit reporting agencies update your scores every month. As your score improves, your rates will generally decrease. But keep in mind that you’ll need to get new insurance quotes to see the benefit.
Here are the best ways to improve your score.
Make on-time payments.
Reduce credit card balances.
Correct errors.
Diversify your credit mix.
Settle outstanding balances.
Eliminate anything in collections.
Usage-based car insurance policies base their prices on driving behavior. Some price premiums on the mileage, others evaluate how you drive (e.g., speeding, hard braking, time of day), and some use both.
You can purchase a usage-based policy from Metromile, Mile Auto, Milewise from Allstate, and SmartMiles from Nationwide. Or you can use a telematics program, which discounts a standard policy, from the following:
Allstate
American Family
Esurance
Farmers
GEICO
Liberty Mutual
Metromile
Nationwide
Noblr
Progressive
Safeco
State Farm
Travelers
Comparing quotes from multiple insurers helps you find the lowest rate possible — the more quotes you gather, the greater your likelihood of finding the lowest rate. Be sure to evaluate policies based on coverage, customer service, and other factors important to you — not just cost. Sometimes, policies that are slightly more expensive offer much better coverage.
You should compare quotes every six months or when your credit score changes. This way, you’ll never miss a chance to save.
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Credit scores influence auto insurance rates by predicting risk, with lower scores correlated with higher risk, leading to higher premiums. But it’s important to note that insurance companies don’t look directly at your FICO credit score. Instead, insurers look at your overall history to calculate what’s called a “credit-based insurance score,” which they use to calculate rates.
Let’s take a look at how rates tend to change based on your score. Below are average monthly rates based on policyholders’ credit rating, according to Compare.com data.
Credit Tier | Average Monthly Rate |
|---|---|
| Excellent | $109 |
| Good | $130 |
| Fair | $142 |
| Poor | $288 |
Drivers with poor credit pay more than double the rate of drivers with excellent credit, while people with fair credit pay nearly half of what drivers with poor credit are charged. You can expect similar monthly rates if you have good or fair credit.
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Rates can vary wildly depending on your state, no matter your credit score. Each state also has different rules affecting how insurers price their policies, plus a different mix of available insurance companies — meaning different insurers offer different rates in different states.
So, let’s take a look at which company offers the lowest rate in each state, based on data from Compare.com.
State | Statewide Average Rate | Cheapest Company | Cheapest Average Rate |
|---|---|---|---|
| Alabama | $188 | GEICO | $81 |
| Alaska | $132 | GEICO | $78 |
| Arizona | $252 | GEICO | $83 |
| Arkansas | $197 | GEICO | $73 |
| California | $109 | Wawanesa | $73 |
| Colorado | $220 | GEICO | $76 |
| Connecticut | $277 | GEICO | $149 |
| Delaware | $287 | GEICO | $131 |
| Florida | $338 | GEICO | $194 |
| Georgia | $254 | Georgia Farm Bureau | $78 |
| Hawaii | $97 | Island Insurance | $76 |
| Idaho | $128 | GEICO | $55 |
| Illinois | $196 | SECURA | $90 |
| Indiana | $151 | GEICO | $65 |
| Iowa | $125 | Hastings Mutual | $60 |
| Kansas | $208 | GEICO | $86 |
| Kentucky | $306 | Grange | $127 |
| Louisiana | $489 | GEICO | $159 |
| Maine | $121 | Patriot Insurance Company | $81 |
| Maryland | $294 | Kemper | $108 |
| Massachusetts | $185 | State Farm | $42 |
| Michigan | $406 | SECURA | $60 |
| Minnesota | $286 | SECURA | $91 |
| Mississippi | $168 | Direct Auto | $87 |
| Missouri | $259 | GEICO | $92 |
| Montana | $165 | General Casualty Insurance | $87 |
| Nebraska | $176 | EMC Insurance | $75 |
| Nevada | $248 | COUNTRY Financial | $63 |
| New Hampshire | $136 | GEICO | $83 |
| New Jersey | $386 | GEICO | $193 |
| New Mexico | $189 | GEICO | $79 |
| New York | $555 | GEICO | $197 |
| North Carolina | $110 | Erie | $68 |
| North Dakota | $204 | Allied | $97 |
| Ohio | $148 | Hastings Mutual | $60 |
| Oklahoma | $170 | GEICO | $75 |
| Oregon | $248 | GEICO | $100 |
| Pennsylvania | $238 | GEICO | $109 |
| Rhode Island | $265 | State Farm | $103 |
| South Carolina | $193 | GEICO | $128 |
| South Dakota | $144 | Kemper | $65 |
| Tennessee | $175 | Tennessee Farmers | $79 |
| Texas | $222 | GEICO | $77 |
| Utah | $216 | GEICO | $84 |
| Vermont | $120 | GEICO | $75 |
| Virginia | $193 | GEICO | $66 |
| Washington | $118 | GEICO | $57 |
| Washington, D.C. | $197 | Ace American | $128 |
| West Virginia | $200 | GEICO | $99 |
| Wisconsin | $240 | GEICO | $72 |
| Wyoming | $162 | GEICO | $82 |
GEICO offers some of the lowest rates across the nation. But in most states where GEICO isn’t the cheapest, small regional insurers, like Wananesa, are a better bet. The takeaway here is to always gather rates from a range of insurance companies before deciding on your policy.
While a few insurance companies choose not to use credit scoring in policy pricing, most do — except in states that prohibit and limit the practice. The following states ban the use of credit rating for underwriting or rating car insurance policies (i.e., determining your premiums) or determining policy renewals.
California
Hawaii
Massachusetts
Michigan
And these states prohibit car insurance companies from denying or canceling auto policies based on credit score alone.
Maryland
Oregon
Utah
Washington had a temporary ban on the use of credit scores for auto insurance pricing, but the ban expired on August 29, 2022.
Getting car insurance when you’re having trouble with your credit score can leave you with questions. Below are answers to the most common questions about car insurance with poor credit.
The best car insurance for people with poor credit scores often includes non-standard or high-risk insurance companies. But some standard insurers offer policies to drivers with poor credit, too. It’s essential to compare quotes and coverage options from multiple companies before deciding on the best one for you.
Yes. Some insurers may deny car insurance based on your credit history. It’s a common rating factor insurers look to determine your risk level for making a claim. But insurance companies weigh credit scores differently, with some placing less emphasis than others. This is another reason why shopping around is so important.
Insurers always use a soft pull to check your credit when providing a quote. A soft pull doesn’t affect your credit score, so you can get quotes from multiple insurance companies without worrying about changes to your credit score.
It’s possible. Some states ban or limit insurers from using credit history to price policies: California, Hawaii, Maryland, Michigan, and Massachusetts. Root Insurance is phasing out the use of checks credit in pricing by 2025. A small number of smaller regional insurers also don’t check credit.
Sources
J.D. Power, “2023 U.S. Auto Insurance Study,” Accessed November 10, 2023.
NAIC, “Credit-Based Insurance Scores,” Accessed November 10, 2023.
Office of the Insurance Commissioner Washington State, “Facts about the credit scoring ban rule,” Accessed November 10, 2023.
NAIC, “Nationwide Gen Ins Co National Complaint Index Report,” Accessed November 10, 2023.
NAIC, “Safe Auto Ins Co National Complaint Index Report,” Accessed November 10, 2023.
Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.
All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.
Compare.com's #1 goal is to save you money. We publish resources that are based on hard-hitting data and years of industry experience to help you make more informed decisions with your wallet.
Learn more about us, our team, and what makes us tick.
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J.J. Starr is an insurance and personal finance expert who has been writing for Compare.com since 2022. Her work has been published across the web, appearing on sites such as Insurify.
Prior to writing for Compare.com, J.J. was a registered banker and life insurance consultant, holding a Series 6, FINRA, and life insurance license. She also earned a master’s degree in writing from New York University.
J.J. has a passion for helping people save money by explaining complex topics like car insurance in a way that is simple and easy to understand.
Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
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