How Much Does Auto Insurance Cost for Drivers with Bad Credit in California?

In an ideal world, we could just tell you the single best company that has the cheapest rates in California. Unfortunately, it’s just not that easy, as there are a whole bunch of unknown factors like your choice of liability limits, the number of miles you drive in a year, if you have maintained coverage continuously, and the neighborhood you live in, that all have an effect on the price of a policy. In this article, we will cover the best ways to avoid high prices and educate you enough to have a jump start in finding the best auto insurance.

One of the more important factors that help set the annual cost of car insurance is your zip code in California. Areas with more people or higher crime rates like Glendale, San Francisco, and Oakland tend to have higher auto insurance costs, whereas areas with less traffic congestion and claims have the gratification of cheap car insurance for drivers with bad credit in California.

The next table shows the higher priced cities in California for drivers with bad credit in which to buy car insurance.

Rate quotes are estimated as the specific geographic location can influence insurance rates substantially.

The vehicle that is being insured is one of the largest factors that determines whether or not you find the most affordable insurance for drivers with bad credit. Vehicles with lots of horsepower, poor safety features, or an increased likelihood of liability claims will cost much more to insure than safer models. The information below estimates insurance premiums for a number of the more afforable vehicles to insure.

Cost estimates assume single female driver age 30, no speeding tickets, no at-fault accidents, $1,000 deductibles, and California minimum liability limits. Discounts applied include safe-driver, multi-vehicle, claim-free, multi-policy, and homeowner. Premium costs do not factor in the specific area where the vehicle is garaged which can revise premiums significantly.

Looking at the rates, makes and models like the Jeep Wrangler, Subaru Forester, and Kia Forte will be some of the most budget-friendly vehicles to insure for people with poor credit. The cost of a car insurance policy will be more expensive just because there is more claim risk for drivers with bad credit, but in general those vehicles will have the lowest insurance rates compared to all other vehicles.

Shopping around for reasonably-priced auto insurance is not always easy, and determining which companies have the cheapest auto insurance rates for drivers with bad credit involves even more shopping around. Policy rates will more than likely be moderately more expensive than the average price in California, with the extra cost attributed to the added risk associated with selling coverage for people with poor credit, but competitive coverage may be available if you are thorough. Each company has a unique formula to set premium rates, so let’s begin by examining the lowest cost auto insurance companies in California.

We do need to point out that California auto insurance rates are calculated based on many things which can significantly increase or decrease your annual premium. Simply getting older, becoming a homeowner, or having a fender bender can trigger price changes that can make some companies way too expensive in comparison to the competition.

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USAA generally has some of the lowest car insurance rates in California at around $1,109 per year. Century National, Wawanesa, CSAA, and Nationwide also rank well as some of the cheaper California auto insurance companies.

In the rate table above, if you are insured with Nationwide and switched to Century National, you could realize a yearly price reduction of about $72. Policyholders with 21st Century could save as much as $188 a year, and Grange customers might reduce rates by $313 a year.

Bear in mind that those prices are averaged across all insureds and vehicles and do not take into consideration a price surcharge for drivers with bad credit. So the car insurance company that has the cheapest price for you may not even be featured in the list of companies above. That helps illustrate why you need to get rate quotes using your own individual information.

Full coverage versus liability-only

Finding cheap car insurance for drivers with bad credit in California should be important to most drivers, and one of the easiest ways to find cheaper insurance is to buy liability only. The chart below visualizes the comparison of insurance premiums with full physical damage coverage compared to only buying liability only. The premium estimates are based on no claims or violations, $500 deductibles, single status, and no discounts are applied to the premium.

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If all age groups are averaged, full coverage costs an extra $2,816 per year more than buying just liability insurance. Many of you may wonder when is the right time to remove full coverage. There is no exact rule that is best for determining when to drop physical damage coverage on your policy, but there is a general school of thought. If the yearly cost of comp and collision coverage is more than about 10% of the settlement you would receive from your company, then you might consider buying liability only.

For example, let’s assume your vehicle’s claim settlement value is $11,000 and you have $1,000 deductibles. If your vehicle is damaged in an accident, you would only receive $10,000 after the policy deductible has been paid. If you are paying in excess of $1,000 annually for comprehensive and collision coverage, then you might want to consider buying only liability coverage.

There are a few cases where dropping physical damage coverage is not advised. If you haven’t paid off your loan, you have to carry full coverage to protect the lienholder’s interest. Also, if you can’t afford to buy a different vehicle in case of an accident, you should keep full coverage in place.

Best rates: State Farm, Progressive, Allstate, or Geico

When it comes to car insurance for people with poor credit, four good companies to start with are State Farm, Progressive, Allstate, and Geico. The next table compares and contrasts ratings and policy coverage options shoppers can expect to find with each one.