Car Insurance for Bad Credit (2026 Guide)
If you’re shopping for car insurance with bad credit, you’ve probably noticed one thing: rates can vary dramatically. Two drivers with the same vehicle and driving history can receive very different premiums based on their credit-based insurance score.
Auto insurance premiums are calculated using risk models. In most states, insurers factor in credit because statistical data shows a correlation between credit behavior and claims risk. The good news? Prices vary by company — and comparing quotes can make a major difference.
Compare car insurance rates available in your ZIP code to see how pricing changes by provider.
Quick Answer: How Bad Credit Affects Car Insurance
Average full coverage (good credit): $1,800–$2,400 per year
Average full coverage (poor credit): $2,800–$4,000+ per year
Who pays more: Drivers with low credit scores, prior claims, or lapses in coverage
Who pays less: Drivers with clean records, continuous coverage, and bundled policies
How to lower rates: Compare quotes, raise deductibles, improve credit, ask about discounts
Insurers use a credit-based insurance score — not your exact FICO score — to assist with underwriting and pricing.
What Affects Car Insurance Rates With Bad Credit?
Even if your credit isn’t strong, it’s only one factor in your premium.
1️⃣ Driving Record
Tickets, at-fault accidents, and DUI convictions significantly increase rates.
2️⃣ Claims History
Frequent claims increase underwriting risk.
3️⃣ Coverage Limits
Higher liability limits, collision, and comprehensive coverage increase premiums.
4️⃣ Deductible Selection
Higher deductibles typically lower your premium.
5️⃣ ZIP Code
Urban areas with higher accident frequency cost more to insure.
6️⃣ Continuous Coverage
Coverage lapses often trigger higher underwriting risk tiers.
If you’re also considered high risk due to violations, you may need specialized coverage.
States That Restrict Credit Use
Not all states allow credit to impact pricing. For example:
California
Hawaii
Massachusetts
Michigan
If you live in one of these states, insurers use alternative rating factors.
How to Get Cheaper Car Insurance With Bad Credit
Even with poor credit, you have options:
Compare at least 3–5 quotes
Increase your deductible
Bundle auto and renters/home insurance
Enroll in telematics programs
Complete a defensive driving course
Improve your credit utilization
Compare multiple providers in your area to identify pricing differences instantly.
Why Comparing Quotes Matters More With Bad Credit
Each insurer weighs credit differently. One company may increase your premium by 20%, another by 60%.
That’s why comparison shopping is critical — especially for price-sensitive drivers.
Frequently Asked Questions
Does getting a car insurance quote hurt my credit?
No. Auto insurance companies perform a soft credit inquiry that does not impact your credit score.
Can I get full coverage with bad credit?
Yes. Your credit impacts pricing, not eligibility.
How long does bad credit affect insurance rates?
Until your credit-based insurance score improves. Most insurers re-evaluate at renewal.
Why do insurers use credit?
Actuarial data shows correlation between credit behavior and claim frequency.
Can I switch insurers mid-policy?
Yes. Most carriers allow cancellation at any time, though fees may apply.
What if I have bad credit and a DUI?
You may need high-risk or SR-22 coverage. Comparing specialty insurers becomes even more important.
Compare Car Insurance for Bad Credit Today
There is no single “best” insurer for drivers with poor credit. Rates vary by ZIP code, underwriting model, and discount structure.
The most effective way to lower your premium is to compare personalized quotes side by side.
Enter your ZIP code to compare available options near you.
We may receive compensation from partners when users request quotes. This does not impact our editorial recommendations.