Do poor people pay more for car insurance?

Asked by: Katarina Stamm II  |  Last update: June 30, 2025
Score: 4.2/5 (66 votes)

Drivers with poor credit (below 580) paid about 69% more for car insurance than those with exceptional credit scores (800 or above), according to an analysis by insurance comparison site The Zebra based on data from 2011 through 2021.

Which group pays more for car insurance?

But in general, insurers charge more for people who are statistically more likely to be involved in an accident or make a claim on their policy. In other words, insurers have found that boys and young men are more likely to get in car accidents than other drivers — even more than young women.

Does income affect car insurance rates?

Income doesn't directly impact car insurance rates, but factors correlated with income, such as credit score, education, homeownership, and ZIP code, in most states do influence your premium. Yet, our data shows those earning between $10,000 and $19,000 per year pay nearly as much as those earning above $200,000.

Who is likely to pay more for car insurance?

Your driving habits

If you've been in multiple accidents, your cost for car insurance is likely to be higher than someone with a clean driving record. If you're a new driver and have not had insurance before, chances are you'll pay more for car insurance.

Which group of people pays the lowest amount for car insurance?

On average, 18-year-old males cost 9 percent less to insure than their female counterparts. As drivers age, the difference in premium between genders narrows. At age 50, for instance, males only pay 1 percent more on average per year for full coverage than 50-year-old females.

The Real Deal: Single People Pay More for Car Insurance

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Who gets charged more for car insurance?

Insurers generally charge more if teenagers or young people below age 25 drive your car. Your gender – Statistically, women tend to get into fewer accidents, have fewer driver-under-the-influence accidents (DUIs) and—most importantly—have less serious accidents than men.

At what age is car insurance most expensive?

The Insurance Institute for Highway Safety reports that teen drivers are four times more likely to get into a car crash than drivers 20 and older. As a result, car insurance companies view young drivers as the most risky to insure. Drivers ages 16 to 24 tend to face the highest premiums compared to other age groups.

How do you lower your car insurance bill?

7 ways to lower your car insurance premium
  1. Qualify for insurance discounts. Getting more discounts that lower your car insurance premium might be easier than you think. ...
  2. Increase your deductible. ...
  3. Reduce your coverage. ...
  4. Compare rates. ...
  5. Try usage-based insurance. ...
  6. Take a defensive driving course. ...
  7. Get a car that's cheaper to insure.

Does credit score affect car insurance?

How credit-based insurance scores work. Most U.S. insurance companies use credit-based insurance scores along with your driving history, claims history and many other factors to establish eligibility for payment plans and to help determine insurance rates. Again, except in California, Hawaii, and Massachusetts.

At what age do car insurance rates drop?

The biggest drop is typically from 18 to 19, when the average rate drops by around $1,595. Car insurance typically drops as you grow older, when you drive safely for three to five years following an accident or citation, and when you switch to a cheaper company.

What if I am too poor for car insurance?

If you can't afford car insurance, don't go without. Instead, try to find a more affordable policy by increasing your deductible, downgrading your coverage, looking for discounts, driving less and comparing prices from multiple insurance companies.

Do insurance companies check your income?

The Health Insurance Marketplace® uses annual household income and other information to decide if you qualify for savings on health coverage through the Marketplace (like the premium tax credit) and other cost savings, like lower copayments, coinsurance, and deductibles (also called cost-sharing reductions).

How much of your monthly income should go to car insurance?

Financial experts recommend spending no more than 10% of your monthly take-home pay on your car payment and no more than 15% to 20% on total car costs such as gas, insurance and maintenance as well as the payment.

What age is car insurance the cheapest?

Experienced drivers are less likely to have accident claims, which means they cost less to insure. At Progressive, the average premium per driver tends to decrease significantly from 19-34 and then stabilize or decrease slightly from 34-75. At age 75, the average premium begins trending upward.

Who pays less for car insurance?

Women typically pay less for auto insurance than men, according to the III, because they're less likely to be involved in accidents or serious violations and are more likely to wear seatbelts.

Who gives best car insurance?

According to our research, California drivers pay an average car insurance premium of $2,973 per year for full coverage and $715 for minimum coverage. Bankrate's insurance editorial team determined that Geico, State Farm, Progressive and Mercury are among the best car insurance companies in California.

Does State Farm run your credit?

Most major car insurance companies like GEICO, Progressive and State Farm factor in your credit score when giving you a quote. Some smaller, regional insurers skip credit checks, though their coverage options (and available online information) can be limited.

What is a good credit score?

For a score with a range of 300 to 850, a credit score of 670 to 739 is considered good. Credit scores of 740 and above are very good while 800 and higher are excellent.

Does having bad credit make car insurance more expensive?

Drivers with poor credit (a credit score under 580) pay 97% more, on average, for full coverage car insurance premiums than do their counterpart drivers with exceptional credit (a credit score above 800), according to a study by Bankrate.

How do I stop paying so much for insurance?

Here are some ways to save on car insurance1
  1. Increase your deductible.
  2. Check for discounts you qualify for.
  3. Compare auto insurance quotes.
  4. Maintain a good driving record.
  5. Participate in a safe driving program.
  6. Take a defensive driving course.
  7. Explore payment options.
  8. Improve your credit score.

At what point should you drop full coverage on your car?

Your vehicle holds a low value: As with collision, consider dropping comprehensive coverage if your vehicle's market value is lower than a few thousand dollars. Figure in your deductible as well and the potential insurance payout may not be worth the price of the coverage.

How much does car insurance go down after 1 year no claims?

In many cases, your insurance will go down by 5-20% in the first year of no claim, depending on your insurer. After the first year, this discount increases each year, usually by 5%, if you don't make a claim. But it only increases up to a maximum discount, usually 50-60%, and a number of years — usually 5-6 years.

Do single people pay more for car insurance?

Car insurance tends to be cheaper for married individuals due to a combination of factors primarily related to perceived risk and statistics. Insurance companies calculate premiums based on risk profiles, and statistically, married drivers have been shown to pose a lower risk compared to their single counterparts.

Does car insurance go up when you turn 65?

When you turn 65, you may pay more or less for car insurance, depending on where you live and which insurance company you use. In many cases, as long as you have a good driving record, your insurance premium may end up decreasing when you turn 65.

What time of year is car insurance most expensive?

Buying car insurance on the day it's due is the costliest option. Car insurance renewals peak twice a year - March and September - as new car registrations are released.