Auto insurance can be expensive for drivers with bad credit. Insurers use credit score as a primary rating factor, pricing policies based in part on drivers’ credit histories. Since car insurance companies rely on historical data showing clients with poor credit are more likely to file auto insurance claims, they compensate for that additional risk by assigning expensive rates.
Your car insurance costs with bad credit depends on which company you choose, where you live, and a few other rating factors. We've gathered below average insurance rates for drivers with bad credit in major California cities, alongside rates from large car insurance companies, , along with tips to save on car insurance if you have bad credit in California.
California drivers face an average penalty of $-87 per year for having a credit score at the low end of the scale. A driver in the "poor" or "below fair to poor" credit tiers will also face a penalty.
|Credit Tier||Average Annual Rate in California|
|Below Fair to Poor||$1,626|
|Average — All Credit Tiers||$1,713|
Car insurance prices will also vary depending on the precise area in which you drive. Insurers look at your address to estimate whether you're likely to file a claim: the denser and claim-prone your immediate area is, the more expensive your rates will be.
Listed below are major California cities and their average car insurance rates for those with bad credit.
|City||Average Annual Rate — Worst Credit||Average Annual Rate — Poor Credit||Average Annual Rate — Below Fair to Poor Credit|
Another factor contributing to car insurance rates is the insurer you choose. Every auto insurance company prices policies in a different manner, giving rating factors varying weights in their pricing calculations. Credit history can be a major differentiator in price between insurance companies. In California, the most affordable insurance company for drivers with bad credit is USAA, which offers average savings of $55 per annum versus the second-cheapest company, Mercury.
See premiums from leading auto insurance companies in California for drivers with bad credit.
|Company||Average Annual Rate — Worst Credit Tier|
If you're having a hard time purchasing auto insurance with a bad credit history, remember these tips: