It feels unfair. You need a car to get to work, but a low credit score pushes your insurance quote sky high in most states. The frustrating part is that your driving may be spotless and the price still climbs.
The good news is that low cost car insurance with bad credit is possible if you know where to look. This guide covers what you can expect to pay as of July 2026, which insurers tend to run cheaper, and the steps that lower your premium over time. Firstcard is a financial-comparison platform, so we do not sell policies. We help you find the smartest path.
Why Bad Credit Raises Your Rate
In most states, insurers use a credit-based insurance score to help set your premium. Studies they rely on link lower scores with a higher chance of filing a claim, so they charge more to offset the risk.
The gap is real. As of July 2026, drivers with poor credit pay an average of about 118% more for full coverage than drivers with excellent credit, according to industry reporting. That works out to roughly $125 more per month for many drivers.
One bright spot: a few states, including California, ban credit-based pricing for auto insurance. If you live in one of them, your credit does not raise your rate at all.
What Low Cost Car Insurance With Bad Credit Costs
Rates vary a lot by company, so shopping around matters more when your credit is low. As of July 2026, industry data points to some insurers running noticeably cheaper for bad-credit drivers than others.
Reported average full-coverage rates for drivers with weak credit include Nationwide near $165 a month, Travelers around $249 a month, American Family close to $263 a month, and GEICO near $305 a month. USAA is often cheapest of all, but it is limited to military members, veterans, and their families.
These are averages, not quotes. Your own price depends on your state, car, driving record, and coverage choices, so treat these as a starting point and always compare your own quotes. Because rates for the same driver differ so much by company, a comparison tool like Insurify lets you gather quotes from many insurers at once and quickly see which ones price bad-credit drivers most fairly.
Insurify
Insurify
Finding the best insurance shouldn't feel overwhelming. Insurify compares personalized quotes from 120+ top-rated providers in minutes — so you can save up to 50% on auto, home, renters, and pet insurance without the hassle.
Standout feature
Compare 120+ insurance carriers instantly. Save up to 50% on premiums.
Fees
Free
Pros
Compares 120+ carriers in real-time. Save up to 50% on premiums. BBB A+ rated.
Cons
Some users report unwanted communications from third-party providers.
How to Find Cheaper Coverage Right Now
You do not have to wait for your credit to improve to save today. A few moves that help immediately:
- Compare at least three to five insurers, since bad-credit pricing swings widely.
- Ask about every discount, including safe driver, bundling, and low mileage.
- Raise your deductible if you have savings to cover it.
- Drop collision or comprehensive on an older car that is nearly worthless.
- Pay the full term up front if the insurer offers a discount for it.
Because the price difference between companies can be hundreds of dollars a year, comparison shopping is the single most powerful step for bad-credit drivers. Adding a modern insurer like Lemonade to your comparison is worth it too, since its quick online quotes make it easy to see how it stacks up against the bigger carriers.
Lemonade
Lemonade
Insurance that's fast, affordable, and actually feels good. Lemonade uses AI to process claims in seconds and donates leftover premiums to causes you care about. Get renters, home, pet, life, or car insurance — all from one app.
Standout feature
AI claims in seconds. Giveback program donates unused premiums. 2.9M+ customers.
Fees
Varies by policy (renters insurance from ~$5/mo)
Pros
Lightning-fast AI claims processing. Social impact through Giveback program. Beautiful, easy-to-use app (4.9★ App Store).
Cons
Limited home insurance availability (28 states + DC only).
The Long Game: Build Your Credit
Here is the part that pays off the most over time. Since your credit score drives your rate in most states, improving it can steadily lower your premium at renewal. Building credit is slow, so the sooner you start, the sooner you see results.
A secured credit-builder is a common starting point. The Current Build Card reports everyday spending activity toward credit building without the usual security deposit hurdles, and the Kikoff Secured Credit Card is another low-barrier option many people use to add positive history. None of these are guaranteed to fix a score, and results vary from person to person. What consistently helps is paying on time and keeping balances low, month after month.
One popular all-in-one starting point is the Self Visa® Credit Card, which pairs a small savings-backed account with a secured card that reports on-time payments to the major bureaus, so the money you set aside doubles as credit history that can lift your score over time.
Track Your Progress So You Can Reshop
Building credit only helps your insurance if you actually reshop after your score improves. Many insurers do not automatically lower your rate when your credit gets better, so the savings sit there unclaimed unless you go looking.
A free monitoring tool like Creditship.ai lets you watch your score climb and spot the moment it crosses into a better tier. When it does, request fresh quotes. Switching insurers after a credit improvement often reveals meaningfully lower rates.
Avoid These Costly Mistakes
A few habits quietly keep bad-credit drivers overpaying. Watch out for:
- Auto-renewing without comparing other insurers first.
- Letting a policy lapse, which flags you as higher risk.
- Carrying full coverage on a car that is barely worth the premium.
- Ignoring small credit improvements that could unlock savings.
Staying insured without gaps is important on its own. A coverage lapse can raise your rate further, no matter what your credit looks like.
Frequently Asked Questions
How much more does car insurance cost with bad credit?
As of July 2026, drivers with poor credit pay about 118% more for full coverage on average than those with excellent credit, roughly $125 more per month for many drivers. The exact gap depends on your state, since a few states ban credit-based pricing.
Which insurers are cheapest for bad credit?
Reported averages for bad-credit drivers point to Nationwide, Travelers, and American Family among the more affordable national options, with USAA often cheapest for eligible military families. Your best pick still depends on your own quotes, so compare several.
Can I get car insurance in a state that ignores credit?
A few states, including California, prohibit insurers from using credit to set auto rates. If you live in one, your credit will not raise your premium, though your driving record and other factors still apply.
Will building my credit actually lower my insurance?
In most states, yes, over time. As your score improves, reshopping your policy can reveal lower rates, since many insurers do not adjust your price automatically. Tracking your score helps you know when to compare quotes again.
The takeaway: bad credit can raise your car insurance, but you are not stuck. Compare insurers today, trim coverage you do not need, and build your credit so future rates fall. For more money guides, visit Firstcard's learn hub.
