| Auto Insurance
Woman looks skeptical with raised eyebrow while holding credit card and phone

A not-so-great credit score can make it harder to qualify for a car loan or get a new credit card, but can it make it harder to get cheap car insurance? If you’re wondering can you get car insurance with bad credit (in particular, affordable auto insurance), as with many things in life, the answer is, it depends. Even though insurance companies may look at your credit score, they don’t look at it the same way as a bank, car dealer, or credit card company does. What is a “bad” credit score? You could still get cheap car insurance with bad credit. We’ll help you understand how to go about it.

You might be wondering: Do I have bad credit? What counts as a bad score? It depends on who you ask and the scale that’s used.

  • Experian reports that a credit score below 669 is considered either fair or bad.
  • NerdWallet estimates that a bad credit score is anything below 630.
  • Privacy Guard writes that a poor score is 500 to 579, while a bad score is 300 to 499.

There’s plenty of room for improvement if your credit score falls between 300 and 670, and that’s okay. The national average credit score only recently hit an all-time high of 706, reports the Deseret News.

But this isn’t necessarily the type of credit score an auto insurance company looks at. Insurance companies look at a credit-based insurance score.

“Credit-based insurance scores use certain elements of a person’s credit history to predict how likely they are to have an insurance loss,” reports the National Association of Insurance Commissioners.

Your regular credit score, like the one Experian writes about, helps tell lenders how likely it is that you’ll repay a loan on time. It has nothing to do with your likelihood to file an insurance claim.

What is cheap car insurance?

Like the scale for a bad credit score is different depending on who you ask, the meaning of cheap car insurance varies from driver to driver. It all depends on a motorist’s budget, expectations, location, life stage, and driving or insurance history.

Here’s a quick example. Let’s say you’ve lived in Oregon all of your life. The average insurance premiums in Oregon are below the national average and come in at $828, reports Quote Wizard. You move to Texas, where the average car insurance rates are higher than the national average. Texans tend to pay average insurance premiums upwards of $934! Such a move could leave you feeling like Oregon car insurance is cheap, while Texas car insurance is expensive.

Insurance costs vary widely based on individual rating factors. Learn which factors can impact your car insurance rates.

How do I find cheaper car insurance with bad credit?

If you’re looking for cheaper car insurance while you put some elbow grease into your credit score, you have options. There are a surprising number of ways you can lower your car insurance costs that have nothing to do with the state of your credit.

Pull back on the coverage you don’t need. 

You’re required to maintain a certain amount of car insurance to stay legal and meet the requirements set forth by your leasing company or lender. Beyond that, the amount of car insurance coverage you choose to purchase is up to you. However, you should consider that you’ll have to pay out of pocket if your vehicle is damaged in an incident that your policy doesn’t cover.

Shift focus to your driving record.

Don’t feel like you can do much about your credit score right now? Consider working on your driving record in the meantime. A driving record that is free of accidents, moving violations, points, or DUIs could mean cheaper car insurance. Even if you have some violations on your driving record, they will drop off after so many years. Check the status of your driving record to see if you have any unresolved tickets or are nearing a time when previous violations will fall off. You could be eligible for different car insurance discounts or lower rates.

Consolidate insurance policies and companies.

Do you have life insurance with one company and auto insurance with another? Or, do you pay for your son or daughter’s auto insurance through a different provider? Consolidating insurance products and companies can simplify your life and potentially help you save money. There are fewer dates and fees to keep track of, and many companies offer a discount when you insure multiple vehicles or bundle different services with them. For example, here at Direct Auto, we offer a multi-product and multi-car discount.

Drive a car that’s cheaper to insure.

Some cars are cheaper to insure than others! Newer, sportier cars usually cost more to insure than older vehicles with high safety ratings and low maintenance costs. If you suspect your vehicle age, type, or size could be inflating your insurance rates, get a quote for a couple of different vehicle types. It might be worth it to trade your current vehicle in for a make, model, and style that’s cheaper to insure.

Where can you find car insurance for bad credit?

Keep driving with Direct Auto, even if your credit score is still a work in progress. While you work on your credit score, we’ll work alongside you to help you find affordable car insurance coverage that fits your needs. Call, click, or come in today to see how affordable your insurance could be!