Bad credit auto insurance: best companies, real costs (2026)

Bad credit can make car insurance more expensive, but it doesn’t mean you can’t get covered. In most U.S. states, insurers may use a credit-based insurance score when setting your premium, so drivers with poor credit often pay more than drivers with strong credit.

In this guide, Auto Insure News will explain what to do first if you need car insurance with bad credit, which companies may be cheaper for poor-credit drivers, how credit affects auto insurance rates, and what steps you can take to help lower your premium.

How to get car insurance with bad credit?

If you have bad credit and need coverage now, start by comparing the same coverage limits from at least three companies. Do not assume your current insurer is still the cheapest, because each company weighs credit differently. A poor-credit driver may get very different prices from Travelers, GEICO, Progressive, Nationwide, USAA, if eligible, and regional insurers.

When you compare auto insurance quotes, use the same liability limits, deductible, vehicle, driver details, and coverage type for each company. Getting auto insurance quotes usually uses a soft credit pull, so shopping for quotes generally will not lower your credit score. After you find the lowest realistic quote, ask about telematics, autopay, paperless billing, bundling, and paid-in-full discounts before buying.

Best auto insurance companies for drivers with bad credit (2026)

Travelers

Travelers is the most broadly cited insurer for the cheapest car insurance for bad credit among large national carriers. NerdWallet’s 2026 analysis names Travelers the cheapest large auto insurer for drivers with poor credit, estimating approximately $239 per month ($2,862 per year) for full coverage. LendingTree similarly puts Travelers at approximately $249 per month and notes it offers the most competitive rates for bad-credit drivers across 13 states.

Travelers also carries an AM Best A++ financial strength rating – the highest possible – which signals strong reliability for claims payment. The one trade-off worth knowing: Travelers scores below Progressive on J.D. Power’s customer satisfaction survey, so if service experience matters as much as price, that comparison is worth making.

Best for: Drivers in Travelers’ coverage states who want the lowest possible full-coverage premium and are comfortable with a lower service rating.

Progressive

Progressive is worth comparing for bad-credit drivers who want a mix of pricing, broad availability, and telematics options. It may not be the cheapest company in every state, but it can be a strong quote to include if you want more than just the lowest advertised rate. That combination – competitive pricing for a poor-credit profile alongside strong service marks – makes Progressive the clearest choice for drivers who want more than just the lowest number on their bill.

Progressive’s Snapshot telematics program is also worth highlighting. For safe drivers, Snapshot can deliver meaningful discounts based on actual driving behavior rather than credit history – a direct offset to the credit-score penalty. Confirm program terms in your state before enrolling, as availability varies.

Best for: Drivers who want a strong balance of affordability and service quality, and who are open to a telematics program.

GEICO

GEICO is consistently competitive for car insurance for bad credit and is available to drivers in every U.S. state. ValuePenguin’s 2025 research estimates GEICO’s full coverage rate for a poor-credit driver at approximately $305 per month – meaningfully below the national average for that credit tier. GEICO also earns strong marks for its digital experience, with highly rated mobile and desktop tools that make policy management straightforward.

Note on “cheapest in X states” claims: Multiple sources confirm GEICO is broadly competitive for poor-credit drivers, but state-level rankings vary by methodology and sample profile. Rather than citing a specific state count that differs across sources, the more reliable statement is that GEICO is among the most accessible and consistently affordable options for bad-credit drivers nationwide.

Best for: Drivers who want a nationally available insurer with a strong digital experience and rates below the national average for poor-credit profiles.

American Family

Among the insurers in this comparison, American Family offers the lowest estimated monthly rate for poor-credit drivers – approximately $263 per month for full coverage, according to ValuePenguin’s research. For context, that is roughly $149 per month less than the national average for the same credit tier, which translates to a potential savings of more than $1,700 per year.

American Family also earns a strong claims service record: its NAIC complaint ratio runs below the industry average for a company of its size, indicating fewer customer complaints per policy than typical. The company offers multiple discounts that are easy to qualify for, including autopay, paperless billing, switching from another carrier, and signing within seven days of receiving a quote.

Important: American Family is not available in all U.S. states. Confirm availability in your area before treating this as a primary option.

Best for: Budget-conscious drivers in American Family’s coverage area who want the lowest monthly premium available.

NJM

NJM (New Jersey Manufacturers) is available in only five states – New Jersey, Connecticut, Maryland, Ohio, and Pennsylvania – but for drivers in those markets, it is one of the strongest options available for cost combined with service quality. ValuePenguin estimates NJM at approximately $288 per month for full coverage for poor-credit drivers, and NJM’s standard policy includes coverage enhancements that many competitors charge extra for.

NJM’s customer service record is among the best of any regional insurer: above-average J.D. Power claims satisfaction scores and a low NAIC complaint index. If you live in one of its five states, NJM deserves serious consideration alongside any national option.

Best for: Drivers in NJ, CT, MD, OH, or PA who want strong coverage value and claims service experience alongside a competitive premium.

Nationwide

The Zebra’s 2026 research identifies Nationwide as one of the cheapest options for bad-credit drivers in its national dataset, with liability-level rates starting around $165 per month. But Nationwide’s most important feature for bad-credit drivers is SmartRide, its usage-based auto insurance program. SmartRide tracks driving behavior and rewards safe habits with discounts of up to 40% – and according to Nationwide, it is a discount-only program, meaning it will not raise your rate if your driving data is unfavorable.

That guarantee matters when evaluating telematics programs. Not all programs operate the same way; some can increase rates in certain states for high-risk driving patterns. SmartRide’s one-directional structure makes it one of the safest telematics enrollments for poor-credit drivers who are confident in their driving habits.

Best for: Safe drivers with bad credit who want to actively offset their credit score penalty through driving behavior data.

USAA

For active-duty military members, veterans, and qualifying immediate family members, USAA consistently offers among the lowest auto insurance rates in the market – for poor-credit drivers as much as for any other profile. USAA also earns the highest overall customer satisfaction scores in the industry year over year. Its SafePilot telematics program, like Nationwide’s SmartRide, is structured as a discount-only program and will not raise your rate for poor driving data.

The limitation is meaningful: eligibility requires a qualifying military affiliation. If that applies to you or an immediate family member, USAA should be the first quote you request.

Best for: Military-affiliated drivers looking for the lowest available rate with top-tier service.

Quick comparison: bad credit auto insurance rates and strengths

Sources: NerdWallet, LendingTree, ValuePenguin, The Zebra (2025–2026). Rates are estimates based on sample profiles. Individual premiums will vary.

How much does bad credit raise your auto insurance rate?

Published studies consistently show that poor credit raises car insurance premiums substantially, but the exact figures depend heavily on the methodology, the comparison credit tier, and the sample driver profile used.

How much more do drivers with bad credit actually pay

Published national rate studies show a wide range of estimates for how much poor credit raises auto insurance rates:

• Bankrate (one study): Poor-credit drivers pay approximately 105% more than drivers with excellent credit for full coverage.
• Bankrate (separate study): Poor-credit drivers pay approximately 76% more than drivers with good credit.
• The Zebra: Poor credit adds roughly 93% more compared to drivers with very good credit.
• Other aggregated sources: some studies place the gap at 90%–115% more than excellent credit, depending on the insurer sample and driver profile used.

Average annual full coverage cost by credit tier (national estimates, 2026)

Sources: Bankrate, Insurify, Compare.com (2026). All figures are national averages based on sample driver profiles and vary significantly by state, insurer, vehicle, and individual underwriting.

These credit ranges are used only as a consumer-friendly reference. Insurers use credit-based insurance scores, not your standard FICO score, and each insurer weighs credit data differently.

Why does credit affect auto insurance rates?

Your regular FICO score is not usually the exact score insurers use. Most carriers rely on a credit-based insurance score, which uses similar credit report data but is built to predict claim risk for an auto insurance rather than loan repayment risk.

According to the National Association of Insurance Commissioners (NAIC), a credit-based insurance score draws on five primary categories of credit data:

• Payment history – the most heavily weighted factor; missed or late payments have a disproportionate impact on a CBIS compared to a standard FICO model
• Outstanding debt – total balances owed across all accounts
• Length of credit history – how long your accounts have been open
• New credit – recent inquiries and newly opened accounts
• Credit mix – the variety of credit types you carry

One important operational note: when an insurer checks your credit to calculate your CBIS, they typically use a soft pull – a type of inquiry that does not appear on your credit report. Getting car insurance quotes generally will not lower your credit score, because insurers typically use soft credit pulls rather than hard inquiries. (Source: Experian)

States that ban or restrict credit use in auto insurance

Several U.S. states have passed legislation that either fully prohibits or meaningfully limits the use of credit in auto insurance pricing. If you live in one of these states, a low credit score may have little or no effect on your premium.

Full-ban states: credit cannot be used for auto insurance rating

In these three states, auto insurers are prohibited by law from using credit information to set premiums or determine eligibility:

Partial-restriction states: credit use is limited, not eliminated

These states impose meaningful restrictions on how credit can be used, but do not fully prohibit it. The rules are narrower – not absent:

7 proven ways to lower your car insurance with bad credit

Bad credit can raise your car insurance premium, but you still have ways to lower your rate before your credit score improves.

1. Compare quotes from 3–5 companies

This is the most important step. Each insurer weighs credit differently, so the same driver can get very different rates from different companies. Compare quotes using the same coverage limits, deductibles, and add-ons.

2. Try usage-based insurance

Usage-based insurance tracks habits like mileage, braking, speed, and time of day. If you are a safe driver, this can help you earn a discount based on how you actually drive. Before enrolling, check whether the program is discount-only or whether poor driving data can raise your rate. It is also worth reviewing the risks of using car insurance tracking devices before trading driving data for a potential discount.

3. Raise your deductible

A higher deductible can lower your comprehensive and collision premiums. This only makes sense if you can afford the higher out-of-pocket cost after a claim.

4. Bundle your policies

Bundling auto insurance with renters or homeowners insurance can lower your total premium. Still, compare the bundled price against separate policies to make sure it is actually cheaper.

5. Ask about every discount

Ask your insurer about discounts for autopay, paperless billing, paying in full, multi-car policies, anti-theft devices, defensive driving courses, good student status, and employer or alumni groups.

6. Reduce coverage on older cars

If your car has a low market value, comprehensive and collision coverage may no longer be worth the cost. Before removing them, review the types of car insurance coverage so you understand what protection you are giving up. If those coverages cost more than about 10% of your car’s value per year, consider dropping them and keeping the liability coverage your state requires.

7. Request a re-rate after your credit improves

Do not wait for renewal if your credit score improves. Contact your insurer and ask for an updated rate. If they will not adjust your premium, compare quotes from other companies.

How to improve your credit score to lower your auto insurance premium

Improving your credit can help lower your car insurance premiums in most states, because insurers often use credit-based insurance scores when setting rates.

Check your credit reports first

Start by reviewing your free credit reports at AnnualCreditReport.com. Look for late payments, incorrect balances, accounts you do not recognize, or payments wrongly marked as missed. If you find errors, dispute them with the credit bureau.

Pay every bill on time

Payment history is one of the most important credit factors. Set up autopay or reminders so you do not miss due dates. If any accounts are past due, bring them current as soon as possible.

Lower your credit card balances

High credit utilization can hurt your score. Try to keep balances below 30% of your available credit, and below 10% if possible. Paying down revolving balances is often one of the fastest ways to improve your score.

Avoid unnecessary new credit

New credit applications can create hard inquiries and reduce the average age of your accounts. While improving your credit for insurance purposes, avoid opening new cards or financing unless necessary.

Shop again after your score improves

Credit scores update as lenders report new information, usually monthly. Once your score improves, ask your insurer for a re-rate and compare new quotes. A better credit profile plus fresh quotes can lead to a lower premium.