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Taylor Milam-Samuel is an experienced insurance writer for Compare.com. A credentialed educator, Taylor is passionate about personal finance and understanding how people manage their money. You can find her work across several trusted insurance and personal finance sites, including U.S. News & World Report, Business Insider, Credit Karma, Insurify, and more.
Taylor has been writing for Compare.com since 2025.
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Nick Versaw leads Compare.com's editorial department, where he and his team specialize in crafting helpful, easy-to-understand content about car insurance and other related topics. With nearly a decade of experience writing and editing insurance and personal finance articles, his work has helped readers discover substantial savings on necessary expenses, including insurance, transportation, health care, and more. As an award-winning writer, Nick has seen his work published in countless renowned publications, such as the Washington Post, Los Angeles Times, and U.S. News & World Report. He graduated with Latin honors from Virginia Commonwealth University, where he earned his Bachelor's Degree in Digital Journalism.
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At Compare.com, it’s our mission to give you the tools to find the best (and most affordable) insurance for your unique needs and budget. We strive to provide information that’s helpful, clear, and unbiased, and we believe that comparing insurance companies should never put you at risk of spam. Our editorial team — which is made up of experienced writers, editors, insurance agents, and data analysts — has spent thousands of hours researching and creating the coverage overviews, side-by-side comparisons, and detailed reviews you see across our site.
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Drivers with poor credit pay an overall average of $180 per month for car insurance, Compare.com data shows. That’s about 30% higher than what people with excellent credit pay for coverage. But you can still find a good deal with the right company.
For example, insurers like COUNTRY Financial, NJM, and Auto-Owners have far cheaper average rates, according to our research.
Many insurers use something called a “credit-based insurance score” to measure financial responsibility and your likelihood of filing a claim.[1] To offset the extra risk, auto insurers charge more when you have a low score. But the good news is your credit history is only one factor that determines your rates, and some U.S. states don’t allow insurers to consider it.
In this article, we’ll cover how credit affects your car insurance rates, the cheapest companies for people with bad credit, and several ways to find more affordable coverage.
COUNTRY Financial has the cheapest average rates for drivers with poor credit.
Insurers that use telematics programs to track driving habits might have cheaper coverage because there’s less emphasis on other factors — like credit.
California, Hawaii, Maryland, Michigan, and Massachusetts don’t allow insurers to use credit scores when determining rates.
Insurance companies look at different factors to set rates, like your location, age, and driving record. Most U.S. states allow insurers to consider your credit history, but California, Hawaii, Maryland, Michigan, and Massachusetts have banned the practice.[2]
If you live in a state that uses credit history as a rating factor, having bad credit will likely increase your rates. It takes time to improve your credit, but comparing quotes can help you save money right away.
Let’s take a look at the cheapest car insurance companies for drivers with bad credit. But keep in mind that the following rates are national averages, and you might find lower rates depending on where you live.
Your costs will vary based on different factors, but COUNTRY Financial has the cheapest average coverage nationwide, at $19 per month for a liability-only policy.
Compare quotes from the top insurers.
Your location also affects your car insurance costs. For example, states with severe weather and more auto insurance fraud have higher rates.
Even within the same state, average rates can change based on factors like where you park your car and traffic in different ZIP codes.[3]
The map below highlights the cheapest car insurance companies in each state, plus their average rates, according to our data.
State  | Cheapest Insurer’s Average Monthly Premium | Cheapest Insurer |
|---|---|---|
| Alabama | $67 | USAA |
| Arizona | $74 | Auto-Owners |
| Arkansas | $61 | State Farm |
| California | $188 | Mercury |
| Colorado | $93 | State Farm |
| Connecticut | $89 | State Farm |
| Delaware | $79 | USAA |
| Florida | $88 | State Farm |
| Georgia | $96 | Auto-Owners |
| Idaho | $100 | Safeco |
| Illinois | $61 | Auto-Owners |
| Indiana | $56 | Auto-Owners |
| Iowa | $42 | Auto-Owners |
| Kansas | $82 | State Farm |
| Kentucky | $101 | Auto-Owners |
| Louisiana | $102 | State Farm |
| Maine | $74 | Progressive |
| Maryland | $160 | USAA |
| Massachusetts | $172 | Safeco |
| Michigan | $107 | Auto-Owners |
| Minnesota | $128 | Safeco |
| Mississippi | $78 | State Farm |
| Missouri | $56 | USAA |
| Montana | $undefined | undefined |
| Nebraska | $102 | Clearcover |
| Nevada | $51 | COUNTRY Financial |
| New Hampshire | $undefined | undefined |
| New Jersey | $125 | NJM |
| New Mexico | $59 | State Farm |
| New York | $164 | CSAA |
| North Carolina | $61 | Erie |
| North Dakota | $undefined | undefined |
| Ohio | $47 | Mile Auto |
| Oklahoma | $60 | State Farm |
| Oregon | $75 | Mile Auto |
| Pennsylvania | $83 | Mile Auto |
| Rhode Island | $undefined | undefined |
| South Carolina | $90 | USAA |
| South Dakota | $undefined | undefined |
| Tennessee | $45 | State Farm |
| Texas | $74 | State Farm |
| Utah | $94 | USAA |
| Vermont | $undefined | undefined |
| Virginia | $64 | Auto-Owners |
| Washington | $82 | Direct Auto |
| District of Columbia | $156 | GEICO |
| West Virginia | $57 | State Farm |
| Wisconsin | $46 | USAA |
| Wyoming | $undefined | undefined |
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The best insurance depends on your unique profile and needs — driving record, coverage, location, budget, and more. Even though there’s no one-size-fits-all company for every driver, the following insurers are solid picks if you have bad credit.
We selected these companies based on their use of credit to calculate rates, average rates for drivers with poor credit, and overall customer satisfaction scores.
Average full-coverage premium: $176 per month
Compare.com Rating: 4.90 out of 5
Strong customer satisfaction ratings
Two unique discount programs
Low rates for bad-credit drivers
Gap insurance not available
No pay-per-mile option
Not available in every state
State Farm earns one of the top spots for customer satisfaction in nearly every region, according to the J.D. Power 2024 U.S. Auto Insurance Study.[4] It’s a top pick for helpful representatives and has an easy claims process.
The company also has lower-than-average rates for drivers with bad credit, so you don’t have to spend extra for a solid customer experience. Plus, you can take advantage of unique discounts like the Drive Safe & Save telematics program.
Average full-coverage premium: $139 per month
Compare.com Rating: 3.43 out of 5
Rates based on safe driving
Impressive customer reviews
Streamlined claims process
Difficult to qualify
Not available everywhere
Lengthy quote process
Root uses AI to set car insurance rates based on your driving habits. Using an app, the company tracks your driving for a few weeks and then offers you a quote. Safe drivers pay less for coverage.
The quote process is long and takes weeks compared to the usual five or 10 minutes. But if you’re a safe driver with bad credit, it’s worth the hassle for lower rates. Customer reviews are more positive than usual, and the claims process is entirely digital and surprisingly fast.
Average full-coverage premium: $139 per month
Compare.com Rating: 4.75 out of 5
Cheap rates for drivers with bad credit
Special programs for teen drivers
Many discounts available
Available in only 19 states
Limited optional coverage
Must work with an agent
COUNTRY Financial stands out with surprisingly low rates for drivers with bad credit. If saving money is your top priority, it’s one of the best options. The company’s program for teen drivers, the Simply Drive course, can help teens drive more responsibly. Plus, you qualify for a 10% discount after completing it.
Even though standard coverage options are strong, optional coverage is limited. The biggest downside to COUNTRY Financial is that it’s available in only 19 states.
Compare cheap, personalized quotes in less than 10 minutes.
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Your credit history is a snapshot of your financial life: payment history, accounts, credit, and more. And insurers use this to determine your credit-based insurance score when calculating your rates.[5] It’s similar to a FICO score or other credit score — but it’s not exactly the same.
Instead, it’s more focused on the chances of you defaulting on your bill or filing a claim. In short, the higher your score, the less likely you are to file a claim. Insurers then charge less for coverage since there’s less risk. The reverse is also true: Insurers charge more for high-risk drivers when you have a low score.
But California, Hawaii, Maryland, Michigan, and Massachusetts don’t allow insurers to consider credit when determining rates. It’s only one factor, though — insurers also consider your age, gender, location, and driving record.
Even though insurance is typically more expensive when you have bad credit, you can still find ways to lower the cost.
Let’s take a look at some of the most effective ways to save money on car insurance when you have less-than-perfect credit:[6]
Increase your deductible. When you file a claim, you’re responsible for paying the deductible, and you can pick the deductible amount that best fits your budget. The higher your deductible, the less you pay for monthly coverage. If you can afford a higher deductible if you need to file a claim, consider increasing it to lower your premium.
Use discounts. Ask about discounts when you set up coverage. You might qualify for reduced rates based on affiliations, driving habits, loyalty, and more.
Consider pay-per-mile coverage. Some insurance companies, like Nationwide and Mile Auto, have pay-per-mile insurance. It’s usually cheaper than traditional coverage if you drive less than 10,000 miles each year.
Compare rates. Car insurance companies offer free quotes online. It’s a quick process that usually takes less than five minutes. Different insurers have different rates, even for the same driver. Compare quotes from at least three insurers to find the best deal.
Comparing quotes saves users an average of $867 per year.†
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Your credit is only one factor that affects how much you pay for car insurance coverage, but you can improve it and lower your monthly premium.
It takes time to increase your credit, but you can make it happen with the following steps:
Review your credit report. The first step is checking your credit report. Several services allow you to view yours for free, and you can request a copy from each credit bureau every 12 months. Read through the report and check for errors or fraud.
Dispute errors. If you find any errors on your credit report, notify the credit bureau that reported it: Equifax, Experian, or TransUnion. Request that the company remove the error and update your report.
Make payments on time. Your payment history is the biggest factor that affects your credit. Set reminders on your phone or calendar to make credit card and loan payments on time to improve your credit.
Pay off debt. Your credit ratio is the amount you owe compared to your available credit. The lower the ratio, the better your credit. Your score increases as your debt decreases.
Your credit affects how much you pay for an auto policy in most states, so it’s a good idea to understand how it works. Check out this additional information about car insurance for drivers with bad credit.
Car insurance companies in California, Hawaii, Maryland, Michigan, and Massachusetts don’t use your credit score because state laws don’t allow it. But even if you don’t live in any of these states, some telematics insurers, like Root, put less weight on credit scores and use data about driving patterns to determine rates instead.
An insurance company can deny you coverage because of your credit score, but it’s rare, and only allowed in some states. Most insurance companies use credit scores as one of many factors when determining rates, so it doesn’t usually make or break your application — you’re more likely to have a high rate than be denied.
A credit score of less than 580 is considered bad credit for car insurance. FICO, the most popular credit-scoring service, defines “poor” credit as scores less than 580. “Fair" credit scores are between 580 and 679.[7]
It depends on your driving record and violations. Some companies — like GEICO and American Family — specialize in coverage for drivers who have serious violations and need SR-22 insurance. Our data shows that COUNTRY Financial, NJM, and Auto-Owners are the three cheapest insurers for high-risk drivers.
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.
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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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Taylor Milam-Samuel is an experienced insurance writer for Compare.com. A credentialed educator, Taylor is passionate about personal finance and understanding how people manage their money. You can find her work across several trusted insurance and personal finance sites, including U.S. News & World Report, Business Insider, Credit Karma, Insurify, and more.
Taylor has been writing for Compare.com since 2025.
Nick Versaw leads Compare.com's editorial department, where he and his team specialize in crafting helpful, easy-to-understand content about car insurance and other related topics. With nearly a decade of experience writing and editing insurance and personal finance articles, his work has helped readers discover substantial savings on necessary expenses, including insurance, transportation, health care, and more. As an award-winning writer, Nick has seen his work published in countless renowned publications, such as the Washington Post, Los Angeles Times, and U.S. News & World Report. He graduated with Latin honors from Virginia Commonwealth University, where he earned his Bachelor's Degree in Digital Journalism.
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COUNTRY Financial, NJM, and Auto-Owners are among the cheapest auto insurers in the U.S., but the best rate for you depends on your unique situation.
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AAA auto insurance policies often have higher average rates than many competitors, but it does have solid discounts and membership benefits.
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USAA SafePilot can get you a discount of up to 30% if you practice safe driving, but the app can be glitchy. Find out if it’s right for you.
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