Best Auto Insurance Companies for Bad Credit (2021)

The best auto insurance companies for bad credit are USAA and Nationwide, although rates will vary by driver. Bad credit can raise your auto insurance rates by $165 a month as well as affect other rates, such as your mortgage. Drivers can increase their credit scores by paying bills on time, not acquiring too much debt, and using debt wisely. The best car insurance companies for bad credit will depend on rates and discounts offered to each driver.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Aug 31, 2021

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Things to Remember

  • The cheapest auto insurance companies for drivers with bad credit are USAA and Nationwide
  • Bad credit can raise your auto insurance rates around $165 a month
  • Drivers can work to improve their credit scores to get better rates on auto insurance, mortgages, and more

Some of the best auto insurance companies out there use your credit score to calculate your rates. However, some states, such as California, don’t allow insurance companies to consider your credit score.

Finding the best auto insurance companies for bad credit will depend on your personal information as well as the state that you live in.

Shop around and compare rates from various companies if you have bad credit but need car insurance.

If your credit score is fair or poor, enter your ZIP code above to compare quotes from the best auto insurance companies for bad credit in your area for free.

What are the best auto insurance companies for bad credit?

Can you get car insurance with bad credit? The answer is yes, but you might pay higher rates with bad credit.

Why do auto insurance companies run credit checks?

Auto insurance companies believe that you will file fewer claims and may pay for damages out of pocket if you have a high credit score.

If you have a bad credit score, you’re believed to be more likely to file a claim. Generally, people with bad credit will be unable to afford the costs for repairs from an accident.

You know that your credit score can lead to much higher interest rates on purchases, but the difference it can make in your auto insurance rates might surprise you.

This table shows average annual auto insurance rates from top companies based on credit score:

Average Annual Rates Based on Credit Rating
CompanyGood Credit RatingFair Credit RatingPoor Credit Rating
Allstate$3,859.66$4,581.16$6,490.65
American Family$2,691.74$3,169.53$4,467.98
Farmers$3,677.12$3,899.41$4,864.14
GEICO$2,434.82$2,986.79$4,259.50
Liberty Mutual$4,388.18$5,604.24$8,802.22
Nationwide$2,925.94$3,254.83$4,083.29
Progressive$3,628.85$3,956.31$4,737.64
State Farm$2,174.26$2,853.00$4,951.20
Travelers$4,058.97$4,344.10$5,160.22
USAA$1,821.20$2,219.83$3,690.73
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The difference between high and low credit scores averages around $165 a month. That is a huge amount of money that you can save by improving your credit score.

It should be noted that some states don’t allow your credit score to factor into your auto insurance rates. Those states are California, Hawaii, Massachusetts, Michigan, and Washington.

There are also some insurance companies that do not use credit scores. These can be very difficult to find, and no credit check auto insurance companies will charge much higher rates than traditional companies.

How can drivers improve their credit scores?

According to NOLO, good credit scores are around 760 and higher, and bad credit scores are about 620 and lower.

Your credit score is made up of several different parts, including your payment history, the amount you owe, how long you’ve had your accounts, new accounts, and the types of credit you have.

Even if you currently have a bad credit score, you can raise it fairly easily.

Start by catching up on any late payments and work on making your payments on time in the future.

Then take a look at your credit accounts. If you owe close to the amount of your credit line, start paying down your account.

Also, try to avoid opening too many new lines of credit. New credit checks can lower your score.

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How can drivers with bad credit save money on auto insurance?

Working to raise your credit score is the first way to lower your auto insurance rates. It will help you in other areas as well, such as with rates for a car or home loan.

The easiest way to save money on auto insurance is to take advantage of discounts. Most discounts aren’t impacted by your credit score and can save you money.

This table shows some of the common discounts offers by top insurers. If the amount of the discount is known, it is listed:

Auto Insurance Discounts By Company
Auto Insurance DiscountsAllstate (%)American Family (%)Farmers (%)GEICO (%)Liberty Mutual (%)Nationwide (%)Progressive (%)State Farm (%)Travelers (%)USAA (%)
Adaptive Cruise ControlN/AN/AN/AN/A5xxN/AN/AN/A
Adaptive HeadlightsN/AN/AxN/A5xxN/AN/AN/A
Anti-lock Brakesxxx555x5xx
Anti-Theftxxx252025x15xx
Claim Freexxx26x10x152312
Continuous CoveragexxxxN/AN/AxN/A15N/A
Daytime Running Lightsxxx155xN/Axx
Defensive Driverxxxx105105103
Distant StudentxxxxN/A10xx7x
Driver's Edxxxx10N/A101583
Driving Device / AppxxN/Ax30402050305
Early SigningxxxxN/A8xN/A1012
Electronic Stability ControlxxxN/A5xxN/AN/AN/A
Emergency DeploymentN/AN/AN/A25N/AN/AN/AN/AN/AN/A
Family LegacyN/AxN/AxN/AN/AxN/AN/A10
Family PlanN/AxxN/AN/A25N/AN/AN/AN/A
Farm VehiclexN/AxxN/AN/AN/AN/AN/AN/A
Federal EmployeeN/AN/Ax810N/AN/AN/AN/AN/A
Forward Collision WarningN/AN/AN/AN/A5xxN/AN/AN/A
Full PaymentN/Axxx$5N/AxN/A7.5N/A
Further EducationN/AN/AN/Ax1015N/AN/AxN/A
Garaging / StoringN/AN/AxN/AN/AN/AN/AN/Ax90
Good CreditxxN/AN/AN/AxxxN/AN/A
Good Studentxxx1522.510x2583
Green VehiclexN/A5N/A10N/AN/AN/A10N/A
HomeownerN/AN/Axxx5x35N/A
Lane Departure WarningN/AN/AN/AN/AxxxN/AN/AN/A
Life InsurancexN/AN/AN/AN/AxN/AN/AN/AN/A
Low Mileagexxxxxxx30xx
LoyaltyN/AxN/AxN/A5xN/AN/Ax
MarriedN/AN/AN/AN/AxxxxN/Ax
Membership / GroupN/AN/AN/Ax107N/AN/AxN/A
MilitaryxN/Ax154N/AN/AxN/Ax
Military GaragingN/AN/AN/AN/AN/AN/AN/AN/AN/A15
Multiple Policies1029x102010121713x
Multiple Vehiclesxxx25102010208x
New AddressN/AN/AN/AN/A5N/AN/AN/AN/AN/A
New Customer / New PlanN/AN/AN/AN/AxN/AN/AN/AN/AN/A
New GraduateN/AN/AN/AN/A5N/AN/AN/AN/AN/A
Newer VehiclexN/AxxN/Axx401012
Newly LicensedN/AN/AN/AN/A5N/AN/AN/AN/AN/A
NewlywedsN/AN/AN/AN/A5N/AN/AN/AN/AN/A
Occasional OperatorN/AN/AN/AN/AN/AN/AN/AN/AN/Ax
OccupationxN/Axx1015N/AN/AxN/A
On-Time PaymentsxN/AN/AN/AN/AN/AN/AN/A15N/A
Online ShopperN/AN/AN/AN/AN/AN/A7N/AN/AN/A
Paperless / Auto BillingxxxN/Ax$30x$233
Paperless DocumentsxxxN/AN/A5$50N/AN/AN/A
Passive Restraintxxx40x20x40xx
Recent RetireesN/AN/AN/AN/A4N/AN/AN/AN/AN/A
Safe DriverN/AN/Ax15N/A3531152312
Seat Belt UseN/AN/AN/A15N/AN/AN/AN/AN/AN/A
Senior DriverxN/AxN/AN/AN/AN/AN/AN/Ax
Stable ResidenceN/AN/AN/AN/AN/AxxN/AN/AN/A
Students & AlumniN/AxN/Ax107N/AN/AN/AN/A
Switching ProviderN/AxxN/A10N/AxN/AN/AN/A
Utility VehiclexN/AxxN/AN/AN/AN/AN/AN/A
Vehicle Recoveryxxx153525x5xx
VIN EtchingN/AN/AxN/A5xxN/Axx
VolunteerN/AxN/AN/AN/AN/AN/AN/AN/AN/A
Young DriverN/AN/AN/AN/AxN/AxN/AN/A$75
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Auto insurance companies will allow you to bundle the discounts you qualify for, which can lock in even lower auto insurance rates for drivers with bad credit.

How to Find the Best Auto Insurance Companies for Bad Credit

While the most affordable auto insurance companies for bad credit on average are USAA and Nationwide, rates will vary by driver.

Remember that USAA only insures active-duty military members, veterans, and their families.

Drivers should raise their credit scores and take advantage of any discounts available to get lower car insurance rates. Shop around before you buy auto insurance and compare quotes to find the best deal for you if your credit score is less than perfect.

Enter your ZIP code below to compare rates from the best auto insurance companies for bad credit near you for free.

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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