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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Written by
Leslie Kasperowicz
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Reviewed by
Daniel Walker
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UPDATED: Apr 29, 2022
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- 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.
Table of Contents
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:
| Company | Good Credit Rating | Fair Credit Rating | Poor 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 | Allstate (%) | American Family (%) | Farmers (%) | GEICO (%) | Liberty Mutual (%) | Nationwide (%) | Progressive (%) | State Farm (%) | Travelers (%) | USAA (%) |
|---|---|---|---|---|---|---|---|---|---|---|
| Adaptive Cruise Control | N/A | N/A | N/A | N/A | 5 | ✗ | ✗ | N/A | N/A | N/A |
| Adaptive Headlights | N/A | N/A | ✗ | N/A | 5 | ✗ | ✗ | N/A | N/A | N/A |
| Anti-lock Brakes | ✗ | ✗ | ✗ | 5 | 5 | 5 | ✗ | 5 | ✗ | ✗ |
| Anti-Theft | ✗ | ✗ | ✗ | 25 | 20 | 25 | ✗ | 15 | ✗ | ✗ |
| Claim Free | ✗ | ✗ | ✗ | 26 | ✗ | 10 | ✗ | 15 | 23 | 12 |
| Continuous Coverage | ✗ | ✗ | ✗ | ✗ | N/A | N/A | ✗ | N/A | 15 | N/A |
| Daytime Running Lights | ✗ | ✗ | ✗ | 1 | 5 | 5 | ✗ | N/A | ✗ | ✗ |
| Defensive Driver | ✗ | ✗ | ✗ | ✗ | 10 | 5 | 10 | 5 | 10 | 3 |
| Distant Student | ✗ | ✗ | ✗ | ✗ | N/A | 10 | ✗ | ✗ | 7 | ✗ |
| Driver's Ed | ✗ | ✗ | ✗ | ✗ | 10 | N/A | 10 | 15 | 8 | 3 |
| Driving Device / App | ✗ | ✗ | N/A | ✗ | 30 | 40 | 20 | 50 | 30 | 5 |
| Early Signing | ✗ | ✗ | ✗ | ✗ | N/A | 8 | ✗ | N/A | 10 | 12 |
| Electronic Stability Control | ✗ | ✗ | ✗ | N/A | 5 | ✗ | ✗ | N/A | N/A | N/A |
| Emergency Deployment | N/A | N/A | N/A | 25 | N/A | N/A | N/A | N/A | N/A | N/A |
| Family Legacy | N/A | ✗ | N/A | ✗ | N/A | N/A | ✗ | N/A | N/A | 10 |
| Family Plan | N/A | ✗ | ✗ | N/A | N/A | 25 | N/A | N/A | N/A | N/A |
| Farm Vehicle | ✗ | N/A | ✗ | ✗ | N/A | N/A | N/A | N/A | N/A | N/A |
| Federal Employee | N/A | N/A | ✗ | 8 | 10 | N/A | N/A | N/A | N/A | N/A |
| Forward Collision Warning | N/A | N/A | N/A | N/A | 5 | ✗ | ✗ | N/A | N/A | N/A |
| Full Payment | N/A | ✗ | ✗ | ✗ | $5 | N/A | ✗ | N/A | 7.5 | N/A |
| Further Education | N/A | N/A | N/A | ✗ | 10 | 15 | N/A | N/A | ✗ | N/A |
| Garaging / Storing | N/A | N/A | ✗ | N/A | N/A | N/A | N/A | N/A | ✗ | 90 |
| Good Credit | ✗ | ✗ | N/A | N/A | N/A | ✗ | ✗ | ✗ | N/A | N/A |
| Good Student | ✗ | ✗ | ✗ | 15 | 22.5 | 10 | ✗ | 25 | 8 | 3 |
| Green Vehicle | ✗ | N/A | 5 | N/A | 10 | N/A | N/A | N/A | 10 | N/A |
| Homeowner | N/A | N/A | x | x | ✗ | 5 | ✗ | 3 | 5 | N/A |
| Lane Departure Warning | N/A | N/A | N/A | N/A | ✗ | ✗ | ✗ | N/A | N/A | N/A |
| Life Insurance | ✗ | N/A | N/A | N/A | N/A | ✗ | N/A | N/A | N/A | N/A |
| Low Mileage | ✗ | ✗ | ✗ | ✗ | ✗ | ✗ | ✗ | 30 | ✗ | ✗ |
| Loyalty | N/A | ✗ | N/A | ✗ | N/A | 5 | ✗ | N/A | N/A | ✗ |
| Married | N/A | N/A | N/A | N/A | ✗ | ✗ | ✗ | ✗ | N/A | ✗ |
| Membership / Group | N/A | N/A | N/A | x | 10 | 7 | N/A | N/A | x | N/A |
| Military | ✗ | N/A | ✗ | 15 | 4 | N/A | N/A | ✗ | N/A | ✗ |
| Military Garaging | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 15 |
| Multiple Policies | 10 | 29 | ✗ | 10 | 20 | 10 | 12 | 17 | 13 | ✗ |
| Multiple Vehicles | ✗ | ✗ | ✗ | 25 | 10 | 20 | 10 | 20 | 8 | ✗ |
| New Address | N/A | N/A | N/A | N/A | 5 | N/A | N/A | N/A | N/A | N/A |
| New Customer / New Plan | N/A | N/A | N/A | N/A | ✗ | N/A | N/A | N/A | N/A | N/A |
| New Graduate | N/A | N/A | N/A | N/A | 5 | N/A | N/A | N/A | N/A | N/A |
| Newer Vehicle | ✗ | N/A | ✗ | ✗ | N/A | ✗ | ✗ | 40 | 10 | 12 |
| Newly Licensed | N/A | N/A | N/A | N/A | 5 | N/A | N/A | N/A | N/A | N/A |
| Newlyweds | N/A | N/A | N/A | N/A | 5 | N/A | N/A | N/A | N/A | N/A |
| Occasional Operator | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ✗ |
| Occupation | ✗ | N/A | ✗ | ✗ | 10 | 15 | N/A | N/A | ✗ | N/A |
| On-Time Payments | ✗ | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 15 | N/A |
| Online Shopper | N/A | N/A | N/A | N/A | N/A | N/A | 7 | N/A | N/A | N/A |
| Paperless / Auto Billing | ✗ | ✗ | ✗ | N/A | ✗ | $30 | ✗ | $2 | 3 | 3 |
| Paperless Documents | ✗ | ✗ | ✗ | N/A | N/A | 5 | $50 | N/A | N/A | N/A |
| Passive Restraint | ✗ | ✗ | ✗ | 40 | ✗ | 20 | x | 40 | ✗ | ✗ |
| Recent Retirees | N/A | N/A | N/A | N/A | 4 | N/A | N/A | N/A | N/A | N/A |
| Safe Driver | N/A | N/A | ✗ | 15 | N/A | 35 | 31 | 15 | 23 | 12 |
| Seat Belt Use | N/A | N/A | N/A | 15 | N/A | N/A | N/A | N/A | N/A | N/A |
| Senior Driver | ✗ | N/A | ✗ | N/A | N/A | N/A | N/A | N/A | N/A | ✗ |
| Stable Residence | N/A | N/A | N/A | N/A | N/A | ✗ | ✗ | N/A | N/A | N/A |
| Students & Alumni | N/A | ✗ | N/A | ✗ | 10 | 7 | N/A | N/A | N/A | N/A |
| Switching Provider | N/A | ✗ | ✗ | N/A | 10 | N/A | ✗ | N/A | N/A | N/A |
| Utility Vehicle | ✗ | N/A | ✗ | ✗ | N/A | N/A | N/A | N/A | N/A | N/A |
| Vehicle Recovery | ✗ | ✗ | ✗ | 15 | 35 | 25 | ✗ | 5 | ✗ | ✗ |
| VIN Etching | N/A | N/A | ✗ | N/A | 5 | ✗ | ✗ | N/A | ✗ | ✗ |
| Volunteer | N/A | ✗ | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Young Driver | N/A | N/A | N/A | N/A | ✗ | N/A | ✗ | N/A | N/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.