The Best Car Insurance for Bad Credit Drivers

You have limited car insurance options if you have bad credit. Here's a guide on the car insurance options available to bad credit drivers, as well as some tips on how to pay less for coverage.
Written by Jason Unrau
Reviewed by Carrie Adkins
If you have bad credit, there are still ways to get decent car insurance. You can get a usage-based insurance policy, shop with a non-credit based insurance, or use a broker.
More than one in four U.S. adults has a credit score below 649, which puts them in a range where it can be tough to get credit. Unfortunately, that can also make it difficult to get
car insurance
If you’re one of the millions of Americans with a less-than-perfect credit report and score, what can you do to get affordable car insurance coverage? Read on to learn about your options if you have bad credit.
And if you want an easy way to compare quotes to make sure you get the cheapest insurance rates, give the
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Why bad credit affects your car insurance rates

Why is it hard to get car insurance with bad credit? Traditionally, insurance companies have assessed insurance premiums based on the risk of an accident. But even if you have a spotless driving record, you could be paying more for car insurance because of bad credit.
Statistically, the lower someone’s credit score is, the higher the likelihood there will be a loss claimed against the insurance policy.
Whether it’s fair or not, insurance companies in most U.S. states use credit-based insurance scores when setting people's premiums. The exceptions are California, Hawaii, and Massachusetts, which have banned insurers from changing rates based on credit.

Car insurance options for bad credit drivers

If you find yourself with a poor credit history and score, you can still find a car insurance policy. The rates may be higher than if you had good credit, but at least you’ll be insured.

Usage-based insurance

For drivers who have a short commute or operate their car at off-peak times and, in general, don’t accumulate many miles on their car,
usage-based insurance
could be an option
These policies take into consideration when, where, and the number of miles you drive to charge you for your insurance. Pay-as-you-drive insurance is more expensive, but if you can minimize your mileage and optimize your driving habits, it could keep the costs reasonable.

Find a non-credit-based insurer

Depending on where you live, there may be options for insurance providers who don’t pull a credit check. However, these companies tend to have higher prices overall. Since products vary from state to state, you’ll need to do some research to find local options. 

Improve your credit score

Finding a relatively cheap car insurance policy now is a good idea, but tackling the root of the problem should be on your radar. Improving your credit score will make it easier to find insurance in the future, and it will also open up options for rent or
, buying a car, and getting a low-rate credit card or loan. 

Move to California, Massachusetts, or Hawaii

This options isn't practical for most bad credit drivers. But if you're already planning on moving to another state soon, consider relocating to one of the three states that don’t take your credit score into consideration for car insurance.
It certainly isn’t an ideal solution, but there are worse places to live, right?

Compare quotes for insurers with high-risk driver policies

Most insurers offer car insurance for people with bad credit. Since you are deemed a high-risk driver, your insurance rate is higher than someone with the same driving record, location, and use that has good credit. Compare quotes from several insurance companies to discover which one has the best rates for you. Options often include Direct Auto,
, and

Use a car insurance broker

You can also save big on car insurance by using a free broker app or website to find you rates from several carriers at once.
To find the best rate on car insurance if you have bad credit, consider using
. By providing a few personal details, you’ll discover how you can save money on insurance through bundles and discounts.
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