Best auto insurance in Arizona with bad credit

People are aware of the importance of having good credit when buying a home or financing a vehicle. Your credit score will determine the interest rate that you might be required to pay. A lower credit score can also impact your car insurance premiums.

According to the National Association of Insurance Commissioners, carriers use information from your credit report to determine whether or not to insure you. The practice is prohibited in Hawaii, California and Maryland, as well as Michigan, Michigan, and Massachusetts. Low FICO can mean that it is difficult to find cheap car insurance in Arizona for those with bad credit. While you improve your credit score, there are several ways to lower your premiums.

Below is a table that shows how credit scores affect rates in Arizona as well as nationally.

Arizona’s best car insurance for people with bad credit

Bad credit Arizona car insurance costs an average of $1,200 more annually than national, good credit rates. Drivers with bad credit or good credit might be motivated to improve their credit scores by the difference in car insurance costs. It is possible to improve your credit score by paying off past due bills. A small amount of money can make a huge difference.

Insurance companies have their own credit based insurance scores which account for your credit mix, debt, and payment history. These factors are similar to those used by credit bureaus, but insurance companies don’t disclose their scores. A good way to get an idea of your credit standing is to refer the credit rating system of the Big Three (Equifax and TransUnion). Scores of 800 or higher are considered to be excellent. Scores of 670 and higher are considered excellent. Anything below 670 could be considered average. Scores of 580 or lower are generally considered to be poor.

What does Arizona’s credit score have to do with my Arizona car insurance rates?

Nationwide Insurance shows that 92% of insurance companies use credit to calculate car insurance premiums. This can help predict who will file a claim. Statistics show that those with lower credit scores are more likely to file claims. Insurance companies charge higher premiums to vehicle owners who have lower credit scores to offset the risk of paying more to insure drivers more likely to cause damage.

By being more aware of your finances and working towards a higher FICO, you can help to avoid worrying about higher rates. You will need to have a track record of making on-time payments and responsible spending to make credit improvements. Switching providers might be a viable option if you are unable to afford your premiums and require lower coverage.

What are other factors that affect auto insurance rates Arizona?

The Bankrate True cost report gives an overview of the factors and events that could impact your car insurance rates. Poor credit can lead to higher insurance premiums, just like a conviction for driving under the influence (DUI). Other factors that could increase your car insurance premiums include:

  • The vehicle: On average, a BMW 330i is $2,225 to insure. A Honda Odyssey costs $1,454.
  • Driving record: DUI convictions are generally the leading cause of insurance premiums rising. This would mean that it would cost on average $3,336, compared to the average rate charged to policyholders with poor credit of $3,026.
  • Your locality: Since ZIP codes are included in quoted rates, moving from one place to the next could reduce your premiums.
  • Teen drivers are the most costly to insure due to their inexperience behind a wheel. A couple will pay an extra $1,800 annually to add a teenage driver to their existing policy.

How to get Arizona car insurance at a low price with bad credit

Insurance premiums will likely be higher for those with less favorable credit histories. Your credit score is one of the best ways to save money on car insurance. It takes time to improve your credit score. Savings can make a huge difference to your bottom line. Discounts are often offered by car insurance companies. These are the top discounts:

  • Register for a driver monitoring program: Major car insurance companies offer significant discounts for signing up for this tracking system that tracks your driving habits. You can save more if you are safer than you drive.
  • Bundle auto and home insurance: If you purchase them from the same carrier, you may be eligible for a discount on your auto and home coverages.
  • You can pass an approved defensive driving class online. After completion, you may receive a discount for a limited time.
  • Get a vehicle anti-theft system installed: Typically, securing your vehicle with an antitheft device will bring you a significant discount on your premiums.

Questions frequently asked

When I apply for insurance, will I be subject to a credit check?

You don’t have to worry about multiple quotes for car insurance. Most insurance companies perform a soft pull, which does not affect your credit file.

How can I get car insurance that is cheaper?

If you have poor credit, switching to another carrier and shopping around for car insurance may be the best way to lower your premiums. You may also be eligible for discounts by being a safe driver and using anti-theft and safety car equipment.

What happens if my credit score is higher than my policy term?

Your insurance company could request that you review your credit reports to see if there are any changes in your score. Your premiums will be adjusted if your insurer determines that your credit score has improved. This change could occur during your policy renewal.