Finding car insurance with bad credit doesn't have to be a struggle. Find out how you can save.
Finding cheap auto insurance can be tough when you have bad credit. Car insurance companies use credit as a rating factor, setting policy prices based partially on clients' credit histories. Because auto insurers use historical data showing drivers with bad credit histories have a greater likelihood of filing car insurance claims, they compensate for the additional risk by assigning expensive rates.
Car insurance rates with bad credit depends on which company you choose, where you live, and a few other rating factors. We've gathered on this page typical car insurance rates for drivers with bad credit in major Alabama cities and rates from a few of the most popular car insurance companies, plus a few tips on saving on auto insurance with bad credit in Alabama.
Drivers in Alabama face an average penalty of $1,595 per year for having a credit score in the “worst” tier. Drivers in either the “poor” or “below fair to poor” credit tier will also pay more than average for a car insurance policy.
| Credit Tier | Average Annual Rate in Alabama |
| Worst | $2,952 |
| Poor | $2,583 |
| Below Fair to Poor | $2,315 |
| Average — All Credit Tiers | $1,358 |
Car insurance costs also depend on the precise area in which you drive. Insurers use your address to better understand your odds of filing a claim: the denser and claim-prone your immediate area is, the more expensive your rates.
See below major Alabama cities and their average car insurance costs for drivers with low credit scores.
| City | Average Annual Rate — Worst Credit | Average Annual Rate — Poor Credit | Average Annual Rate — Below Fair to Poor Credit |
| Birmingham | $3,348 | $2,929 | $2,624 |
| Montgomery | $3,081 | $2,696 | $2,416 |
| Mobile | $3,241 | $2,837 | $2,547 |
| Huntsville | $2,876 | $2,515 | $2,254 |
| Tuscaloosa | $3,033 | $2,654 | $2,381 |
Another contributing factor to how much you pay for auto insurance is the company you choose. Each car insurance company rates its policies differently, giving rating factors varying weights in their pricing calculations. Credit history can be a significant differentiator in price between otherwise-similar car insurance companies. In Alabama, the most affordable insurance company for a driver with bad credit is GEICO, which offers average savings of $216 per year in comparison to the second-cheapest company, USAA.
See rates from major car insurance companies in Alabama for drivers with bad credit.
| Company | Average Annual Rate — Worst Credit Tier |
| GEICO | $1,490 |
| USAA | $1,706 |
| ALFA | $2,086 |
| Allstate | $2,454 |
| Mid-Century | $2,557 |
If you're dealing with the difficulty of purchasing car insurance with a low credit score, consider these tips:
