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A guide to non-credit-based car insurance

Car insurance rates are typically set using a driver's credit score to help determine their monthly premium. If you don’t have an established line of credit — if you're young or new to the U.S., for instance — the process of acquiring car insurance can get complicated. While the impact of not having established credit may vary, an incomplete history will probably look like "fair" credit in the estimation of an auto insurance company.

Let’s explore the best ways to find affordable car insurance without credit.


Why does credit score matter in car insurance pricing?

improve your credit score

Not every car insurance company uses credit history as a rating factor, but many do. If you live in CaliforniaHawaii or Massachusetts, your credit score won't be taken into account because state law prohibits it. Outside of these states, credit is a common pricing factor because of its apparent accuracy in helping auto insurers predict risk.


Determining and avoiding risk is auto insurance companies' primary goal. Historical data show drivers with bad credit file more claims than do drivers with high credit, and that these claims tend to be more expensive. Bad or incomplete credit leads to designation as a high-risk — expensive — car insurance client.


Best cheap car insurance companies for a driver without credit history

It’s tricky to determine how car insurance companies may view an applicant's incomplete credit history. Credit history is typically pulled by a potential insurance company after the quoting process is complete. Credit score is then used to adjust the driver's rate up or down. Some companies may increase rates if a credit check turns up a lack of history, while other companies' rates may remain unaffected.

 
The below rates should provide a general idea of how much car insurance costs without a credit history. These rates come from The Zebra's methodology, with a "fair" credit score applied.
 
Car Insurance Company Average Annual Premium with Fair Credit
Allstate $2,162
Farmers $1,736
GEICO $1,358
Liberty Mutual $2,276
Nationwide $1,262
Progressive $2,127
State Farm $2,003
USAA $1,247

 

USAA is the cheapest car insurance company for drivers with limited or no credit history. To get the best possible price, get quotes from as many companies as you can.

 

Once you have established a line of credit, be sure to shop around again. There’s a price difference of nearly 50% between drivers with excellent credit and poor credit. If you’re able to establish an excellent line of credit, you could save on your monthly auto insurance payments.

Auto insurance data methodology

The auto insurance rates published in this guide are based on the results of The Zebra's State of Insurance car insurance pricing analysis. This analysis of more than 83 million insurance rates spans every U.S. ZIP code, using a sample user profile: a 30-year-old single male driver with a Honda Accord, good credit and full coverage at these levels:

  • $50,000 per person/$100,000 per incident for bodily injury liability
  • $50,000 per incident for property damage liability
  • $500 deductibles for collision and comprehensive coverage

To generate pricing for particular rating factors, we adjusted the driving profile based on common pricing factors used by major car insurance companies. These factors include credit score, coverage level, driving record and others.

In some instances, average rates from Liberty Mutual were derived from internally sourced sales data.


Additional insurance rating factors to consider

If your credit history is limited because you’re a young driver, you have another costly rating factor to contend with. Car insurance companies believe your driving history is a good indicator of how you will drive. Without a driving history to reference, car insurance companies view new drivers as high-risk drivers. The aggregated data below show young drivers paying significantly more than older drivers.

Other common auto insurance rating factors include marital status, location and recent insurance claims. 

Annual premiums by age

Age Average Annual Insurance Premium
16-19 $5,151
20-29 $1,918
30-39 $1,407
40-49 $1,355
50-59 $1,258
60-69 $1,287
70-79 $1,514
80-85 $1,804

No-credit-check auto insurance companies

Most auto insurance companies use drivers' credit ratings to determine their prices. Hawaii, California, Washington and Massachusetts are the only states in which a prospective customer's credit score cannot be utilized. In other U.S. states, a car insurance company may use its discretion in deciding whether to use credit as a rating factor. 


If you’re looking for a car insurance policy with pricing based on your driving record rather than your credit report, consider usage-based insurance programs. These insurance policies rely on in-vehicle technology to track your driving behavior and determine your premium. Some of these companies may utilize a driver's credit report, but to a lesser extent than do traditional insurance companies.


The best way to save on car insurance without a credit score is to compare auto insurance rates from a variety of companies to find the best rates. Enter your ZIP code below to get started.

Find the right policy in only a few minutes.

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Renata Balasco
Renata BalascoAssociate Content Strategist

Renata is a licensed insurance professional and content strategist responsible for creating home and auto insurance guides for The Zebra.

Renata's background in technical writing and her experience working in the insurance industry informs her work. She holds a bachelor’s degree in communications.

Renata's work has been cited by Car and Driver

About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.

  • The Zebra’s insurance content is not subject to review or alteration by insurance companies or partners.

  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.

  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.