How to Get Car Insurance with Bad Credit in New York
Last Updated on January 28, 2023
New York, like most states, allows insurers to consider credit scores when calculating premiums. Drivers with bad credit pay more for car insurance.
Fortunately, there are plenty of ways to find affordable car insurance regardless of your credit score.
By shopping around, comparing rates, and working with the right insurer, drivers with bad credit, average credit, or no credit can find great car insurance at a competitive price.
Keep reading to learn everything you need to know about getting car insurance with bad credit in New York.
Table of Contents:
- How Credit Score Impacts Insurance Premiums in New York
- Best Car Insurance Companies in New York with Bad Credit
- Why Do Insurers Care About Credit Scores?
- Comparing Quotes Does Not Impact Credit Scores in New York
- Can You Get Car Insurance in New York With No Credit Check?
- Other Tips for Finding Car Insurance with Bad Credit in New York
How Credit Score Impacts Insurance Premiums in New York
Insurers in New York use your credit score to calculate insurance premiums. When requesting a car insurance quote in New York, you need to provide your Social Security Number (SSN), and the insurer uses your SSN to check your credit score and calculate premiums.
Only three states prevent insurers from using credit scores to calculate premiums: California, Massachusetts, and Hawaii. In New York, insurers are freely permitted to use your credit score.
According to our research, drivers in New York with poor credit scores (between 300 and 579) pay $129 more per month than car insurance with a good credit score (between 740 and 799).
Fortunately, drivers with a bad credit score – or even no credit score – can still buy car insurance in New York. Keep reading to find out how.
Best Car Insurance Companies in New York with Bad Credit
Insurance companies consider different factors when calculating premiums. Some insurers put a heavy emphasis on credit scores, while others care less.
By shopping around with different providers in New York, you can find a company that cares less about your credit score, allowing you to get good car insurance at a competitive price – regardless of whether you have a bad credit score or no credit score.
The best car insurance companies in New York for drivers with bad credit include:
All of these insurers seem to care about credit scores less than competitors. By requesting a quote from the insurers above, you could find good car insurance at a competitive price.
Why Do Insurers Care About Credit Scores?
Why do insurance companies in New York care about credit scores at all? Why do you need to give your insurer your SSN to buy car insurance?
Insurance is all about risk. Statistically, drivers with a bad credit score are riskier to insure than drivers with a good credit score.
This risk-based system isn’t perfect. Some of the world’s best drivers have poor credit scores. Meanwhile, many people with perfect credit are atrocious drivers.
Overall, however, studies show people with high credit scores are less risky to insure than people with bad credit scores for reasons like:
- People with bad credit scores tend to file more claims than drivers with good credit scores
- When drivers with bad credit scores file a claim, they tend to obtain higher payouts than drivers with good credit scores
- Drivers with bad credit scores have a higher risk of missing insurance premium payments and experiencing other billing issues
All of these factors mean drivers with good credit scores are cheaper to insure in New York. That’s why drivers with good credit scores tend to pay significantly lower rates than drivers with bad credit scores in New York.
Comparing Quotes Does Not Impact Credit Scores in New York
A hard inquiry can lower your credit score. Many insurance experts recommend comparing quotes to find the best car insurance policy. But does comparing quotes make your credit score worse?
When shopping around for car insurance, you may be able to view a semi-complete quote from an insurer without entering your Social Security Number (SSN) or any personally identifiable information. Many insurers provide upfront price information in exchange for your ZIP code and vehicle type.
Even if you request a formal quote from an insurer, the insurer performs a soft inquiry – not a hard inquiry.
A soft inquiry does not lower your credit score. Even a single hard inquiry is unlikely to significantly impact your credit score. Making multiple hard inquiries in a short period can lower your score, but comparing quotes should not lower your credit score significantly.
Overall, comparing quotes does not impact your credit score in New York. Because insurers perform a soft inquiry to check your credit score, you can shop around with multiple insurers to find the best for your unique needs.
Can You Get Car Insurance in New York With No Credit Check?
All major car insurance companies in New York require a credit check before providing insurance. However, some usage-based insurers now offer car insurance with no credit check required.
Here’s how it works:
- A growing number of insurers offer usage-based insurance policies.
- With usage-based insurance, you pay a fixed rate for car insurance per mile you drive. The more you drive, the more you pay.
- These insurers use telematics systems (driver-tracking devices or apps) to track driver-specific risk factors.
- Drivers who brake slowly, accelerate softly, avoid high speeds, and drive during safe times of the day are less risky to insure than other drivers, and insurers could charge cheaper rates.
- Usage-based insurance companies use driving data to calculate risk and charge accurate premiums, allowing them to charge fair rates regardless of your credit score.
If you’re a safe driver with a bad credit score, then a usage-based insurance company could be the right choice for you in New York.
Other Tips for Finding Car Insurance with Bad Credit in New York
Other tips for finding car insurance with bad credit in New York include:
Shop Around: Some insurers care deeply about credit scores, giving them a higher weight when calculating rates. Other insurers care less about credit scores. By shopping around, you can find a car insurance company ideal for drivers with your credit score.
Customize or Lower Coverage: If you’re struggling to find affordable car insurance in New York with bad credit, you may want to customize your insurance coverage. Lower coverage, drop collision and comprehensive coverage, or buy a minimum liability plan to save money.
Change Vehicles: Some cars are notoriously expensive to insure for people with any type of credit. If you have bad credit, for example, finding affordable insurance on a new model year sportscar could be impossible. Consider changing vehicles to save money.
Exclude Drivers: Insurers need to know every licensed driver in your house to calculate rates. If a driver in your house has a poor credit score or bad driving record, it could raise rates for everyone. Consider excluding a driver from your policy to reduce premiums.
Ask About Discounts: Taking advantage of discounts could help you save hundreds per year on car insurance. Even if you have bad credit, you qualify for discounts – like bundling discounts, safe driving discounts, safety equipment discounts, good student discounts, and more.
Use Usage-Based Insurance: Some companies specialize in selling usage-based insurance with no credit check required. Other companies – including State Farm and Progressive – have usage-based insurance systems available to existing customers. Signing up for a usage-based insurance policy could help you save hundreds per year regardless of credit score – especially if you’re a safe driver.
Be Patient: Waiting a few months or years could have a significant impact on car insurance premiums. If your credit is improving over time, then you could have better insurance options in a few months. Or, if you have at-fault accidents on your record, those accidents eventually fall off your record (most insurers ignore violations beyond three to seven years). If you’re struggling to find affordable car insurance with bad credit, then be patient. There could be better options soon – and you may only need to pay higher rates for a few months.
Work with a Specialty or High-Risk Insurer: If you have very bad credit, no credit, or multiple violations on your driving history, you may need to work with a specialty or high-risk insurer. These insurers specialize in insuring drivers who cannot obtain car insurance from the ordinary marketplace. You’ll pay higher rates, but you can legally drive on the road.
Final Word
Drivers in New York have plenty of options for car insurance. Even if you have bad credit, you can find insurers willing to work with you.
Insurers may charge higher rates to drivers with bad credit. However, your credit score is one of the hundreds of factors used to calculate rates. Some insurers care relatively little about credit scores, while others put a higher weight on credit scores.
Shop around and compare quotes today to find the best car insurance in New York regardless of whether you have a bad credit score, good credit score, or no credit score.
