What Car Insurance is Cheapest for Low Credit Scores in Houston?

For bad credit, one of the largest components that aid in calculating car insurance rates is where you normally keep your vehicle. Larger areas tend to have more expensive auto insurance rates, whereas areas that tend to be more rural receive better rates.

The information below rates the most expensive places in Texas for low credit scores to buy auto insurance in. Houston is listed at #5 with the yearly price of $1,853 on average, which is approximately $154 per month.

Price information shown is estimated as the garaging address in Houston can change coverage prices significantly.

The type of vehicle you are insuring is one of the biggest factors when trying to find cheaper car insurance for low credit scores. Vehicles with higher performance characteristics, poor passenger safety features, or a history of substantial liability claims will cost much more to insure than more modest models.

The next table outlines insurance premiums for some of the cheapest vehicles to buy insurance for.

Price data assumes single male driver age 30, no speeding tickets, no at-fault accidents, $1,000 deductibles, and Texas minimum liability limits. Discounts applied include multi-vehicle, multi-policy, claim-free, safe-driver, and homeowner. Premium costs do not factor in specific garaging location which can affect prices substantially.

Based upon these rates, makes and models like the Honda Accord, Ford Escape, Toyota Prius, and Honda CR-V are most likely to be a few of the less-costly vehicles to insure for bad credit.

Finding out which company offers the best insurance rates for low credit scores takes a little more sweat than just comparing rates from one or two companies. Every car insurance company has a unique formula to determine rates, so let’s look at the rankings for the most budget-friendly insurance companies in Houston, TX.

It’s important to understand that Texas insurance rates are determined by lots of factors which can substantially decrease or increase the cost of having a policy. Improving your credit rating, buying higher coverage limits, or getting a few speeding tickets can cause premium changes resulting in some rates now being more affordable than others.

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Travelers may have some of the lowest car insurance rates in Houston at around $1,010 per year. USAA, Texas Farm Bureau, Germania Mutual, and California Casualty are also some of the most economical Houston, TX car insurance companies.

As the example above demonstrates, if you have coverage with California Casualty and switched to USAA, you could earn a yearly price reduction of in the neighborhood of $254. Customers with Esurance may save as much as $279 a year, and State Farm insureds might lower prices by up to $322 a year.

It’s important to note that these estimates are averages for all drivers and vehicles in Texas and are not factoring in a specific location for low credit scores. So the auto insurance company that is most affordable for your situation may not even be in the list above. That emphasizes why you need to get car insurance quotes using your own individual information.

Types of discounts on Houston insurance rates

Insurance providers that sell policies for low credit scores may also provide discounts that may potentially lower prices by as much as 35% if you meet specific eligibility requirements. Popular insurance companies and the discounts they provide are included below.

• Farm Bureau has savings for multi-vehicle, driver training, youthful driver, renewal discount, good student, safe driver, and multi-policy.
• MetLife offers discounts including claim-free, good student, defensive driver, accident-free, multi-policy, and good driver.
• Progressive discounts include good student, homeowner, continuous coverage, multi-vehicle, online quote discount, online signing, and multi-policy.
• AAA includes discounts for good student, AAA membership discount, pay-in-full, anti-theft, good driver, and multi-policy.
• American Family may include discounts for accident-free, multi-vehicle, Steer into Savings, early bird, and bundled insurance.
• GEICO offers premium reductions for driver training, air bags, emergency military deployment, daytime running lights, membership and employees, multi-vehicle, and five-year accident-free.
• State Farm may offer discounts for defensive driving training, Drive Safe & Save, student away at school, safe vehicle, passive restraint, good student, and Steer Clear safe driver discount.

The information below visualizes the comparison of car insurance rates with and without policy discounts. The price estimates are based on a female driver, no driving violations, no at-fault accidents, Texas state minimum liability limits, comp and collision included, and $1,000 deductibles. The first bar for each age group shows the average annual price with no discounts. The lower bar shows the rates with claim-free, safe-driver, multiple vehicle, accident-free, anti-theft, and passive restraint discounts applied. With discounts applied, the average amount saved each year on insurance for low credit scores is 28% or $425.

The example below demonstrates how deductibles can change insurance costs when searching for cheap insurance for low credit scores. The data assumes a single female driver, comp and collision included, and no discounts are applied.

As shown above, a 40-year-old driver could lower rates by $408 a year by changing from a $100 deductible up to a $500 deductible, or save $612 by using a $1,000 deductible. Even younger insureds, like the Age 20 chart data, can cut up to $1,048 or more by choosing a higher deductible.

When using a larger deductible, it will be required to have enough spare savings to offset the extra out-of-pocket expense associated with higher deductibles.

Price comparison of only insuring for liability

Buying cheaper insurance should be important to the majority of drivers, and a good way to reduce the cost of insurance for low credit scores is to only buy liability insurance. The chart below illustrates the difference between insurance rates with full coverage compared to only the Texas minimum liability coverage. The premiums are based on no claims or driving violations, $100 deductibles, single marital status, and no additional discounts are factored in.

If averaged out across all ages, comp and collision coverage costs $2,181 per year more than buying just liability insurance. That is a large expense and it proposes the question if buying full coverage is worth the money. There is no set guideline of when to phase out comprehensive and collision coverage on your policy, but there is a guideline you can use. If the yearly cost of full coverage is about 10% or more of replacement cost minus your deductible, the it may be a good time to stop paying for full coverage.

There are some circumstances where buying only liability insurance is not recommended. If you still owe money on your vehicle, you must maintain physical damage coverage in order to keep the loan. Also, if your emergency fund is not enough to purchase a different vehicle if your current one is damaged, you should keep full coverage.