Wouldn’t it be so easy if you could just magically know the one auto insurance company that has the best auto insurance prices for drivers with bad credit? It’s not that simple, unfortunately, as there are a whole bunch of unknowns like whether you are a man or a woman, the type of vehicle you drive, the number of miles you drive in a year, and if you have points on your license, that all impact the cost of coverage. In this article, we will cover the types of situations that result in high rates and will hopefully give the reader a good beginning to your search for cheaper coverage.
The vehicle model that needs insurance is one of the largest considerations when shopping for cheap car insurance for drivers with bad credit. Vehicles with lots of horsepower, poor safety ratings, or high incidents of liability claims will cost substantially more to insure than safer, lower-performance models. The list below estimates car insurance rates for a handful of the most budget-friendly vehicles to buy coverage for.
| Insured Vehicle | Estimated Cost for Full Coverage |
|---|---|
| Honda Accord LX 4-Dr Sedan | $3,835 |
| Ford Escape Limited 4WD | $4,162 |
| Honda CR-V EX 2WD | $4,193 |
| Jeep Wrangler Sport Islander Package 4WD 2-Dr | $4,215 |
| Ford Explorer XLT 4WD | $4,299 |
| Chevrolet Equinox LT AWD | $4,541 |
| Jeep Grand Cherokee Laredo 2WD | $4,549 |
| Dodge Grand Caravan SXT | $4,630 |
| Chevrolet Malibu LT | $4,637 |
| Toyota Prius | $4,665 |
| Toyota Camry XLE | $4,788 |
| Nissan Rogue S AWD | $4,863 |
| Chevrolet Impala LS | $4,868 |
| Ford F-150 STX Regular Cab 4WD | $4,881 |
| Toyota Tacoma Double Cab 4WD | $4,969 |
| Volkswagen Jetta LE 4-Dr Sedan | $5,119 |
| Toyota RAV4 2WD | $5,126 |
| Ford Focus SEL 4-Dr Sedan | $5,141 |
| Toyota Camry Hybrid | $5,199 |
| Chevrolet Silverado LTZ Crew Cab 2WD | $5,209 |
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Data assumes single male driver age 30, no speeding tickets, no at-fault accidents, $1,000 deductibles, and Pennsylvania minimum liability limits. Discounts applied include multi-vehicle, homeowner, claim-free, multi-policy, and safe-driver. Premium costs do not factor in specific zip code location which can lower or raise premiums greatly.
Looking at the data, vehicles like the Honda Accord, Ford Escape, Honda CR-V, Jeep Wrangler, and Ford Explorer should be some of the less-costly vehicles to insure for people with poor credit. Car insurance rates will tend to be higher because there is a higher risk for drivers with bad credit, but overall those particular models will tend to have the lowest insurance prices that you’ll find.
For people with poor credit, one of the more important criteria that determine insurance cost is where you keep your car. Areas with a lot of weather claims or more people will most likely pay more, whereas areas with lower crime rates and fewer weather claims receive better rates.
The information below rates the most expensive areas in Pennsylvania for drivers with bad credit to purchase car insurance in. Philadelphia is ranked at #1 having an annual price of $1,977 for the average insured, which is approximately $165 monthly.
| Rank | City | Average Per Year |
|---|---|---|
| 1 | Philadelphia | $1,977 |
| 2 | Drexel Hill | $1,489 |
| 3 | Chester | $1,421 |
| 4 | Levittown | $1,407 |
| 5 | Norristown | $1,307 |
| 6 | Allentown | $1,141 |
| 7 | Easton | $1,102 |
| 8 | Reading | $1,099 |
| 9 | Pittsburgh | $1,095 |
| 10 | Bethlehem | $1,087 |
| 11 | Erie | $1,082 |
| 12 | Wilkes-Barre | $1,079 |
| 13 | Hazleton | $1,056 |
| 14 | Municipality of Monr | $1,049 |
| 15 | Plum | $1,047 |
| 16 | Scranton | $1,039 |
| 17 | New Castle | $1,026 |
| 18 | Bethel Park | $1,019 |
| 19 | Altoona | $1,002 |
| 20 | Harrisburg | $985 |
| 21 | Lancaster | $975 |
| 22 | Williamsport | $956 |
| 23 | Lebanon | $950 |
| 24 | York | $944 |
| 25 | State College | $896 |
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Prices are comparative as the vehicle garaging location can impact rates substantially.
Shopping around for budget car insurance is hard enough, and finding out which companies offer the best insurance rates for drivers with bad credit will involve even more rate comparisons. Each company has their own guidelines to establish rates, so to begin we’ll rank the insurance companies with the overall best prices in Pennsylvania.
It’s a good idea to know that Philadelphia, PA insurance rates are impacted by many things that may substantially change the price of your policy. That is why it is crucial to compare rates to find the lowest car insurance rates for drivers with bad credit. Prices can be altered by many things and change frequently, so the lowest-price company three years ago may now be one of the higher cost companies.
Find the Cheapest Car Insurance with Bad Credit
| Rank | Company | Cost Per Year |
|---|---|---|
| 1 | General Casualty | $748 |
| 2 | Travelers | $803 |
| 3 | USAA | $809 |
| 4 | Penn National | $816 |
| 5 | Erie | $816 |
| 6 | Auto-Owners | $973 |
| 7 | Amica | $1,022 |
| 8 | Atlantic States | $1,036 |
| 9 | Donegal Mutual | $1,069 |
| 10 | GEICO | $1,123 |
| 11 | State Farm | $1,162 |
| 12 | Allied | $1,179 |
| 13 | California Casualty | $1,222 |
| 14 | State Auto | $1,279 |
| 15 | Encompass | $1,385 |
| 16 | Harleysville | $1,396 |
| 17 | Mutual Benefit Group | $1,454 |
| 18 | Progressive | $1,457 |
| 19 | Nationwide | $1,491 |
| 20 | Chubb | $1,583 |
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General Casualty quotes some of the most affordable car insurance rates in Philadelphia at around $748 per year. Travelers, USAA, Penn National, and Erie also make the cut as some of the most economical Philadelphia, PA car insurance companies.
In the above example, if you buy coverage from Penn National and switched to General Casualty, you could see annual savings of roughly $68. Policyholders with Erie could save as much as $68 a year, and Auto-Owners policyholders might reduce rates by $225 a year.
Remember that these premium estimates are averages across all ages of drivers and types of vehicles and do not take into consideration a vehicle location for drivers with bad credit. So the insurer that is most affordable for your situation may not even be in the top 30 companies shown above. That’s why you need to get car insurance quotes using your own driver information and specific vehicle type.
Violations and accidents raise rates
In a perfect world, the ideal way to receive good insurance rates for people with poor credit is to be an attentive driver and not have accidents or get tickets. The diagram below demonstrates how traffic citations and fender-benders drive up yearly insurance costs for different ages of insureds. The rate quotes are based on a single female driver, comprehensive and collision coverage, $500 deductibles, and no discounts are applied.
In the example above, the average cost of an auto insurance policy per year with a clean driving record and no accidents is $1,971. Receive one speeding ticket and the average cost jumps to $2,237, an increase of $266 each year. Then add one accident along with the one speeding ticket and the 12-month cost of insurance for drivers with bad credit goes up to an average of $2,981. That’s an increase of $1,009, or $84 per month, just for not being attentive to the road!
Should you buy full coverage?
Reducing premiums for insurance is important to the majority of people, and one of the quickest ways to find cheaper insurance for drivers with bad credit is to not buy full coverage. The chart below illustrates the difference between auto insurance costs when comparing full coverage to liability only. Data assumes no tickets, no at-fault accidents, $250 deductibles, drivers are not married, and no policy discounts are applied.
As an overall average, full coverage costs an extra $2,311 per year more than just buying liability only. Many drivers will wonder if you should buy full coverage. There is no exact formula to drop physical damage insurance, but there is a guideline you can use. If the annual cost of comprehensive and collision coverage is more than about 10% of the replacement cost of your vehicle minus the policy deductible, the it may be a good time to stop paying for full coverage.
There are a few situations where only buying liability is not in your best interest. If you still owe money on your vehicle, you have to carry full coverage in order to satisfy the requirements of the loan. Also, if you can’t afford to buy a different vehicle if your current one is totaled, you should not consider dropping full coverage.
Discount Philadelphia insurance rates
Car insurance companies that provide coverage for drivers with bad credit may also provide policy discounts that may potentially lower prices by as much as 35% if you meet certain criteria. Larger insurance companies and a partial list of their discounts can be read below.
- Farm Bureau discounts include youthful driver, driver training, safe driver, 55 and retired, multi-vehicle, multi-policy, and renewal discount.
- State Farm offers discounts including anti-theft, good driver, driver’s education, Drive Safe & Save, defensive driving training, passive restraint, and accident-free.
- Progressive policyholders can earn discounts including multi-policy, homeowner, online signing, online quote discount, multi-vehicle, and good student.
- Allstate offers premium reductions for good payer, 55 and retired, good student, passive restraint, new car, and FullPay discount.
- Nationwide offers discounts for multi-policy, easy pay, accident-free, defensive driving, Farm Bureau membership, family plan, and good student.
- MetLife has savings for defensive driver, multi-policy, claim-free, accident-free, good student, and good driver.
The illustration below shows the difference between yearly insurance costs with and without discounts applied to the policy premium. The premiums assume a male driver, no claims or violations, Pennsylvania state minimum liability limits, full coverage, and $500 deductibles. The first bar for each age group shows the price with no discounts. The second bar shows the rates with passive restraint, defensive driving course, multiple vehicle, homeowner, anti-theft, and multiple policy discounts applied. When these discounts are applied to the policy premium, theaverage yearly reduction on insurance for drivers with bad credit is 28% or $431.