Poor Credit Now Costs Drivers $3,944 a Year: Rates, States & How to Cut Them
Drivers with poor credit now pay a median $3,944 a year for full car cover, up 37.7% in three years — more than good-credit drivers with a ticket or crash.
Image: Wikimedia Commons / likeaduck
Washington, November 15, 2026 — American drivers with poor credit now pay a median of $3,944 a year for full-coverage car insurance, up 37.7% in three years, according to NerdWallet's 2026 Auto Insurance Rates Report. The same driver with a clean record paid $2,864 a year in January 2023, a rise of $1,081, based on 1.4 billion rate estimates from Quadrant Information Services.
The rise hit poor-credit drivers harder than almost any driving mistake. A good-credit driver with a clean record saw premiums rise by only $576 over the same period, to $2,359, and the 37.7% rise for a poor-credit driver with no violations beat the rises for good-credit drivers with a DUI, a speeding ticket or a crash.
Key Takeaways
- Poor-credit drivers with clean records pay a median $3,944 a year for full coverage, up $1,081 since January 2023.
- The 37.7% rise beat good-credit drivers with a DUI (35.9%), a speeding ticket (34.6%) or a crash (32.6%).
- A poor-credit driver with a recent DUI pays a median $7,013 a year, the highest rate in the report.
- California, Hawaii and Massachusetts ban insurers from using credit scores to set car insurance rates.
How Much Does Car Insurance Cost With Poor Credit in 2026?
The gap between good and poor credit is now $1,585 a year for a clean-record driver. It grows with a violation: a speeding ticket lifts the median to $4,815 a year, an at-fault crash to $5,584, and a DUI to $7,013 — the largest increase of any profile, at 40.4% over three years.
| Driver profile | Median annual rate, January 2026 | Increase since January 2023 |
|---|---|---|
| Poor credit, clean record | $3,944 | 37.7% |
| Poor credit, speeding ticket | $4,815 | 38.2% |
| Poor credit, at-fault crash | $5,584 | 36.7% |
| Poor credit, DUI | $7,013 | 40.4% |
| Good credit, clean record | $2,359 | 32.3% |
| Good credit, DUI | $4,474 | 35.9% |
The figures come from NerdWallet's insurance data team, which ran a fixed 35-year-old driver profile with $1,000 deductibles through carrier rating algorithms. The figures are modelled estimates, not a record of what drivers paid. Not every line is rising: Midwest crop insurance premiums were cut by $762 million.
Which States Ban Credit Scores in Car Insurance Rates?
California, Hawaii and Massachusetts do not allow credit as a factor in setting auto insurance rates. Insurers say credit-based insurance scores help predict claims. "It helps in predicting expected claims activity and loss costs more accurately," said Norman Niami of the American Academy of Actuaries' Automobile Insurance Committee. Critics say the practice hits low-income drivers hardest. "Credit scores are one of the most harmful things that results in you paying higher auto insurance premiums," said Michael DeLong of the Consumer Federation of America.
Regulators are watching insurers more closely. Oklahoma's insurance department recently reached a $45 million settlement with State Farm over homeowners' wind and hail roof claims it said were improperly denied.
How to Lower Car Insurance With Poor Credit
Shopping around is the fastest relief, because insurers penalise poor credit very differently: in 49.3% of U.S. ZIP codes where credit scoring is allowed, the cheapest insurer for a poor-credit driver differed from the cheapest for a good-credit driver, according to NerdWallet's October 2026 rates. Raising the deductible lowers the premium, automatic payments earn a small discount, and avoiding minor claims helps.
Building credit may help, but it is slow and far from certain: each insurer sets its own thresholds. "Most people probably have some idea that you can improve your credit score by trying to pay your bills regularly and reliably," DeLong said. "But again, that's easier said than done."
Frequently Asked Questions
How much is car insurance with poor credit in 2026?
Poor credit with a clean record: a median $3,944 a year for full coverage, against $2,359 with good credit. With a recent DUI, it is $7,013.
Can poor credit cost more than a DUI on car insurance?
In percentage terms, yes — 37.7% against 35.9% for a good-credit driver with a DUI. In dollars, the DUI driver still pays more: $4,474 against $3,944.
Which states do not allow credit scores for car insurance?
California, Hawaii and Massachusetts. In the other 47 states and Washington, D.C., insurers may use a credit-based insurance score to price policies.
How can I lower my car insurance if I have poor credit?
Compare quotes from several companies, raise the deductible, use automatic payments, and avoid small claims.
NerdWallet updates its average car insurance rates every month.
