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Auto insurance can be expensive if you have bad credit. Auto insurance companies use credit score as a major rating factor, assigning premiums based in part on clients' credit histories. Because auto insurance companies rely on historical data that show those with bad credit are more likely to file auto insurance claims, they compensate for the additional risk by charging more.
Your car insurance costs with bad credit will depend on which company you choose, where you live, and a few other rating factors. This page lists average insurance rates for drivers with bad credit in primary Michigan cities and rates from popular insurance companies, plus a few tips on how to save on car insurance with bad credit in Michigan.
Drivers in Michigan face an average penalty of $3,783 annually 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 Michigan|
|Below Fair to Poor||$4,477|
|Average — All Credit Tiers||$2,610|
Your auto insurance prices will also vary based on the geographic area in which you live. Insurance companies rely on your address to estimate your likelihood of filing a claim: the denser and claim-prone your immediate area is, the more expensive your rates.
See below major Michigan cities and their average car insurance rates for drivers with poor credit ratings.
|City||Average Annual Rate — Worst Credit||Average Annual Rate — Poor Credit||Average Annual Rate — Below Fair to Poor Credit|
Another factor that contributes to your premium is the insurer you select. Each auto insurance company prices policies in a different manner, giving rating factors varying weights in their calculations. Credit is often a significant pricing differentiator between otherwise-similar car insurance companies. In Michigan, the most affordable major insurance company with bad credit is GEICO, which offers a price break of $1,368 yearly over the second-most affordable company, Home Owners Insurance Company.
See below prices from major car insurance companies in Michigan for drivers with bad credit.
|Company||Average Annual Rate — Worst Credit|
|Home Owners Insurance Company||$3,031|
If you're having a hard time purchasing auto insurance with a low credit score, consider these tips: