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Compare car insurance with fair credit
How to get cheap car insurance without perfect credit
Your fair credit score might lead you to a fair insurance premium, but discounts and a few savvy money-saving methods could lower that rate further. And taking your score to the next level could save you 17% or more on your annual premium.
Snag affordable coverage for high-risk drivers, a marketing claim backed by our rate analysis which showed premiums less than $80 a month.
- Qualify even as a high-risk driver
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What’s the best car insurance for fair credit?
The good news is that it’s not impossible to get car insurance with fair credit, and you’re better off than drivers with poor credit, or no credit history at all. These types of coverages could be your best bet:
Usage-based car insurance
Usage-based policies allow you to pay for insurance based on the amount you use your car and your personal driving habits. You’ll use a telematics device to track your safety on the road with a physical black box, mobile app or built-in service. This allows your provider to determine risk with a high level of accuracy, rewarding safe driving habits regardless of credit.
If you’re building credit and don’t drive often, usage-based insurance could work for you. Insurance companies uses personal driving habits — not a general credit score — to determine rates. Be aware that this type of insurance may not save you money if you have risky driving habits.
You can find insurers who don’t use credit to determine insurance rates at all. These insurers may apply more weight to other factors, such as driving record. However, you might find these companies to have higher rates overall.
State laws in California, Hawaii and Massachusetts prohibit insurance companies from using credit as a factor.
A no-credit policy works well if you’re denied coverage by other insurers or if you have a stellar driving record that could lower your rates.
Extraordinary life circumstances
If you’d like to go with a traditional insurance provider, you may still lower your rates by getting an exception for certain life situations. Many providers reconsider your premium if your credit score was affected by:
- Death of a spouse, child or parent
- Government-declared catastrophes
- Involuntary unemployment
- Military deployment
- Serious illness or injury
- Total loss of your home
- Identity theft
If your credit has been impacted by a life situation, some insurance companies may consider that before raising your rates. However, typically you should have a strong driving history and regular on-time payments.
Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
- Broad coverage, including for custom car parts or ridesharing
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- Accident forgiveness on small claims or for staying claim-free
- Stack a variety of discounts for multiple cars, autopay or homeownership
Cheapest car insurance for fair credit
How do I save on car insurance with fair credit?
Take advantage of the good start you’ve made with your credit, using these rate-saving tactics:
- Maintain a clean driving record. Safe driving heavily factors into your premium, providing the opportunity to save money despite less-than-perfect credit.
- Look for discounts. Find simple discounts such as automatic payments or completing a driving course.
- Lower coverage. Protect yourself with only the essentials if your situation allows for it.
- Raise the deductible. If you’re in a good financial spot, consider raising the deductibles on your policy. But be aware that the savings on your premium may not be worth the extra cost to you in the event of an accident.
- Go claims free. Consider not making an accident claim when the damage doesn’t go above your deductible and the incident doesn’t involve another driver.
- Get a rate check. If your credit has improved significantly, contact your provider about refiguring your rate to account for the increased score. It may also be worth shopping around to see rates from other providers.
How much can I save if I improve to good credit?
Improving your credit score can influence your rates significantly, even if it’s just a small improvement. In fact, upping your credit by 100 points could save as much as $1,000 per year.
The savings varies based on your score and provider. However, those with poor credit often pay over 40% more on car insurance than those with higher scores. Even an increase from fair to good credit often saves around 17% with big name providers.
That means you might be paying $1,820 per year for car insurance with fair credit. If you take it to the next level, you could pay $1,510 per year — a savings of $310.
Why do insurance companies look at my credit?
Using a credit-based insurance score can be a controversial topic in some circles. However, studies have shown that drivers with higher credit are also safer on the roads. Insurance companies can use that information to determine a new customer’s accident risk as well as financial responsibility.
However, other factors influence your premium alongside your credit score. Those include your driving record, age, location and type of vehicle. In addition, some states don’t allow insurance companies to use your credit score at all.
Must read: How do I know if insurers are looking up my credit?
The insurance company will most likely check your credit score during the quoting process. It may ask you for personal information to find the score, such as your address, Social Security number or vehicle VIN.
You’ll then be prompted to give permission for the credit check. Most companies use a soft hit to check insurance-based credit, meaning it won’t influence your credit score.
You could save money on your premium by opting for usage-based insurance, a no-credit policy or by finding discounts on regular insurance. And upping your score could save you as much as 17%.
Compare options to find the best car insurance provider for you.
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