
Sign up & start saving!
Get our weekly newsletter for the latest in money news, credit card offers + more ways to save
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Updated
You can still get car insurance without a credit score and even find savings using several methods. However, you may pay as much as 67% more than drivers with stronger credit.
You won’t always qualify for affordable car insurance coverage if you have no credit. These types of coverage could be your best bet:
Mileage-based insurance uses your driving, not demographics, to decide your insurance rates. Instead of using traditional factors that can’t be helped like age and gender, usage-based insurance focuses more on how well and how often you drive.
These pay-as-you-go insurance policies allow you to track your mileage and driving habits to help determine how much you’ll pay. To get your insurance rates, you’ll install a telematics device, either a physical device or an app, that tracks how safely and how much you drive.
If you drive infrequently and don’t have a history of accidents or traffic violations, you could save with a usage-based policy. However, this method may backfire if you tend to be a risky driver or have a long commute — insurance companies can increase your rates after your initial quote.
Some companies maintain that they won’t use credit to determine rates. Others welcome low- or no-credit drivers. However, an insurer that doesn’t check credit may charge more overall than its competitors.
Legislation in California, Hawaii and Massachusetts prohibit insurers from factoring in credit to determine rates.
If you drive often and have been denied coverage because of your credit, a no-credit-check company could help you get insurance. But be ready to pay more.
To keep premiums low, consider adding a co-owner with good or excellent credit and a clean driving record. This person must partially own the vehicle named on the policy.
If you have family or close friends willing to share their car with you, co-owner insurance could give you a lower rate and better coverage. But this should be temporary if you’re working towards financial independence and building credit.
Pay only for the miles you drive, plus enjoy app services you won’t find everywhere like claims and car health updates.
When purchasing car insurance with no credit, you might need to think outside the box to get the best rate.
If you have car insurance without a credit score, you could be paying over 50% more than those with strong credit. Since the average cost of insurance is around $1,300 per year, that brings the cost for those with no credit above $1,950.
However, even small increases in your credit score could help you save significantly on your premium. Improving your credit score by just 100 points could save up to $1,000 a year.
Credit | Average |
---|---|
Good | $3,275 |
Fair | $3,945 |
Poor | $5,652 |
All | $4,284 |
Insurance companies use credit to get a full picture of your accident risk and financial responsibility. While this practice is controversial for some people, studies show that drivers with higher credit scores have fewer accidents.
However, insurance companies also factor in your driving record, age and location as part of the process. If you don’t have credit but still have a clean driving record, you may get rewarded for your safe driving.
The insurer should ask for permission to check your score during the quoting process. When you get started, the company asks for personal information like your address, Social Security number or vehicle ID.
These credit checks use a soft pull, meaning they won’t affect your credit score.
You can get car insurance if you have no credit by applying to companies who don’t check credit scores, finding a co-owner or applying for usage-based insurance. However, you may pay 25% to 67% more.
Compare your options for the best car insurance provider for your situation.
Preliminary data on fatal accidents and driving behavior could explain why drivers haven’t seen higher insurance refunds.
See average EV insurance rates for 2021 based on Finder’s car model research, plus new models on the horizon.
Getting a policy can be complicated, but it offers protection for you and your employees.
Ways to protect your assets and what you need to know about marital debt.
Which type of car insurance policy fits your car and driving needs?
If your child gets sick or injured and has to take time away from college, tuition insurance can reimburse you for what you already paid.
Navigate car deals and a wavering market if you’re buying a ride during the coronavirus.
Get the financial help you need as you search for a new job.
While it’s incredibly convenient, you’ll need the right tech to be eligible for this service.
Check out the top 50 American car models, and find out what makes them American.