Best car insurance for bad credit

Written by: Sarah Sidlow
• Updated •5 min read
This date may not reflect recent changes in individual terms.
Male insurance claim adjuster examining vehicle damage while woman is sitting next to the car talking on her phone.Image: Male insurance claim adjuster examining vehicle damage while woman is sitting next to the car talking on her phone.

In a Nutshell

If your credit isn’t great, your car insurance premium may be higher. But if you’re trying to keep your rates under control, check out our picks for the best car insurance for bad credit.
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Insurance companies use certain information to calculate your insurance premium, including your age, car, ZIP code, driving habits, claims history and the distance you drive in a year.

Many insurers also use a credit-based insurance score, which looks at your payment history, credit history and overall debt, to determine the risk of an insurance loss. While it’s not quite the same thing, bad credit can often correlate to a lower credit-based insurance score, which may mean you’ll be paying more for your car insurance.

If you have bad credit, there are a few things you can look for when comparing car insurance companies. Read on to learn more about some of the companies that offer the best car insurance for bad credit.

How does credit affect car insurance?

Much like your credit affects your ability to apply for a credit card or get a mortgage, your credit can affect how much you pay for car insurance. The laws vary by state, but in many cases, insurance companies can use a metric called a credit-based insurance score to calculate the price of your insurance premium. Generally, drivers with good credit will pay less for car insurance than drivers with poor credit.

Why do car insurance companies use credit history?

The riskier a company determines a customer to be, the more it will likely charge them for their services. Studies from the Federal Trade Commission have indicated that drivers with bad credit are more likely to file car insurance claims than those with good credit.

Even though your credit score can affect your insurance premium, your credit-based insurance score isn’t quite the same as your credit score. Unlike a regular credit score, which looks at a broad range of factors, a credit-based insurance score looks at a more limited set of data from your credit history. Car insurance companies using this metric are likely examining your credit utilization, credit history, credit mix and delinquencies to determine how likely you are to have an insurance loss.

Best for high-risk drivers: State Farm

Here’s why: State Farm car insurance is available nationwide and offers several opportunities to lower your rate based on your driving. Additionally, State Farm offers some discounts that can help offset the increased cost of insurance for bad credit.

  • SR-22 assistance — If your license has been suspended, you may be required to submit proof of insurance (also known as an SR-22 certificate), which your State Farm agent may be able to help you with.
  • Coverage — State Farm provides standard coverage options (collision, comprehensive and liability), plus optional coverage like rental reimbursement, rideshare coverage and emergency roadside service.
  • Discounts — State Farm offers several discounts for drivers, including bundling, multivehicle and anti-theft device discounts.
  • Safe-driver savings — Other ways to save money on your premium include the Drive Safe & Save™ and Steer Clear® programs. Discounts for taking a defensive driving course or going three years without a violation or accident are also available.
Check out reviews of State Farm auto insurance.

Best for usage-based insurance options: Nationwide

Here’s why: Most major insurance companies will run a credit check on their customers. But there are other ways to lower the cost of your premium, even if your credit isn’t great.

If you’re a safe driver or don’t drive often, you may benefit from a company offering pay-per-mile programs or usage-based insurance, or UBI. These programs usually use telematics to track your driving behavior and then use that data to calculate your rates.

  • Availability — Nationwide isn’t available in every state, so you’ll need to check if it’s available where you live before committing to this insurer.
  • Usage-based insurance option — Drivers receive a 10% participation discount for enrolling in Nationwide’s SmartRide program and can earn up to a 40% discount based on their safe driving. That’s a higher potential UBI discount than those offered by other major insurers.
  • Discounts — Other discount opportunities include multipolicy, good-student, accident-free and defensive-driving discounts.
Check out reviews of Nationwide auto insurance.

Best for discounts: Geico

Here’s why: Geico offers an impressive range of discount options. While drivers with lower credit scores may pay slightly higher premiums, they could make up the difference by taking advantage of some of Geico’s other opportunities for savings.

  • Discount categories — Geico offers car insurance discounts in several categories, including vehicle equipment, driver history and habits, driver’s education, driver affiliation and customer loyalty. Several of its possible discounts could save drivers between 20% and 25% on their premiums.
  • Versatile app — Tech-savvy customers may also appreciate Geico’s robust mobile app, which allows users to manage their policies, request roadside assistance, get a photo estimate and more.
  • Discount availability — Take note: Not all discounts and programs are available in all states.
Check out reviews of Geico auto insurance.

Best for no credit check: Cure

Here’s why: It’s rare that you’ll find a car insurance company that doesn’t check your credit at all. Cure, which stands for Citizens United Reciprocal Exchange, is known for its stance against using factors like education, occupation and credit score to determine car insurance rates.

  • Availability — At this time, Cure offers car insurance in just a few select states.
  • Additional services — Cure offers 24/7 roadside assistance. Services include fuel delivery, battery jump-start, locksmith service, tire change and towing.

FAQs about car insurance for bad credit

Does bad credit affect your car insurance?

Depending on where you live, your credit is one of many factors insurance companies may look at when determining the cost of your insurance. Typically, drivers with poor credit will pay more for car insurance than drivers with good credit.

Do you need a credit score to get car insurance?

Most large insurance companies will run a credit check before issuing car insurance, and having bad credit or no credit means you may pay higher rates. There are a few smaller insurance companies that don’t check your credit at all, and in California, Hawaii, Massachusetts and Michigan, insurers cannot use customers’ credit scores to set policy rates.

What credit score does car insurance use?

Depending on the state, car insurers may use a credit-based insurance score, a more limited measurement than a regular credit score, to determine the cost of a customer’s car insurance premium. This metric looks at a customer’s credit utilization, history, delinquencies and credit mix, among other things.

How we picked these insurers

We used information from each insurance company’s website to select the best insurers for drivers with bad credit. In general, we looked at insurance companies with the greatest availability, most unique driver programs and the most robust discount options. We also analyzed what credit information the companies require to assess a policy.

About the author: Sarah Sidlow is a freelance writer and editor based near Detroit. She has a master’s degree in journalism from Georgetown University. Sarah’s work has appeared in Luxembourg’s national newspaper, Washington City Paper… Read more.