buying States Where Poor Credit Has the Biggest Impact on Car Insurance Rates

19:37  13 april  2018
19:37  13 april  2018 Source:   MSN

7 Costly Misconceptions About Car Loans

  7 Costly Misconceptions About Car Loans <p>Understanding the fundamentals can save you money</p>If you're buying a new or used car, there's a good chance you're taking out a loan to pay for it. About 56 percent of new cars and about half of used cars purchased in the third quarter of 2017 were financed with loans, according to the credit-reporting agency Experian.

States Where Poor Credit Has the Biggest Impact on Car Insurance Rates . Just How Expensive Is Teen Car Insurance in Your State ? Teens have it tough, but who can boast about having it the worst? READ NOW.

"In the vast amounts of states , a poor credit history will have a greater impact on your auto insurance premium than a drunk-driving conviction," said Margot Gilman with Consumer Reports.

  States Where Poor Credit Has the Biggest Impact on Car Insurance Rates © George Rose/Getty Images

A nationwide report by NerdWallet finds that auto insurers widely use consumers' credit histories to determine rates, and those with low credit scores pay an average of $1,270 extra per year in car insurance. Insurers see those with low credit scores as more likely to file claims, the report states.

The personal finance site compared insurance prices for a hypothetical 30-year-old driver with a clean driving record and good credit to prices for a driver with bad credit, but an otherwise identical profile. Results showed prices varied widely. Wyoming, Iowa and North Carolina had the smallest spread between insurance rates, with bad-credit drivers paying an average of $235, $449, and $451 extra per year, respectively. By contrast, those with bad credit are hit hardest in New Jersey, Kentucky, and Michigan, where they pay an average of $2,138, $2,216, and $5,571 extra per year, respectively. To put Michigan's outlying figures in perspective, note that U.S. Census Bureau data from 2016 shows median household income in the state at only $52,492. Having bad credit in the American auto industry's home state costs drivers dearly.

The great myth about car insurance costs

  The great myth about car insurance costs Consumer watchdogs say insurance companies are doing you no favors if you're one of these lower-risk driversThat's the counterintuitive, but probably accurate, picture drawn by two surveys of auto insurance rates -- one by the Consumer Federation of America (CFA), the other by Internet auto insurance search engine The Zebra.

health insurance rates by state . Millennials skip renters insurance , putting finances at risk. How our insurance quotes work. Press Room. Got Poor Credit ? Study: Your Credit History Makes Big Impact on Your Premiums.

behind the numbers insurance car insurance progressive farmers insurance state farm geico. If a Kansan has “ Poor ” credit , their insurance could soar to ,266/year, nearly 2.5 times the rate for someone with In July, the CFA released a report on how marital status impacts car insurance rates .

NerdWallet found the difference in insurance premiums between those with high credit scores and low scores exceeds $1,000 annually in 28 states, plus the District of Columbia. The report, written by Lacie Glover, explains that the only states where bad credit does not impact car insurance rates are California, Massachusetts, and Hawaii. These three states ban auto insurers from basing rates on credit information.

FICO credit scores range from 300 to 850. There is no official number demarking a "bad" credit score, and each individual insurer and lender will use its own criteria to determine creditworthiness. Investopedia has a good explanation of how credit scores work.

Follow MSN Autos on Facebook and Twitter

Good driver, bad credit: What makes your car costs so high .
Car owners with poor credit can pay hundreds — if not thousands — more to drive than those with good credit. This plays out in two important ways: higher rates…To see how much poor credit can cost car owners, NerdWallet looked at auto loan terms and insurance quotes for drivers in different credit tiers.

—   Share news in the SOC. Networks

Topical videos:

This is interesting!