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How Much Is Auto Insurance?

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If you have a car, you need auto insurance to protect you from sudden, and possibly enormous, financial costs in case you’re involved in an accident. According to MyCarInsurance123.com, the national average monthly car insurance premium is $135. That works out to $1,625 per year.

While knowing how much car insurance costs on average can be insightful, it’s important to understand the factors insurers look at when setting rates. That way, you can figure out how to get the coverage you need at a price that fits your budget. 

We’ve researched the top U.S. auto insurance companies and provided our findings in our review of the best car insurance companies for 2020.

Fill out the form to get personalized quotes for auto insurance coverage and see how much it is for you:

How Auto Insurance Companies Set Their Premiums

Car insurance rates vary widely based on many factors related to a driver, vehicle, and location. Each company emphasizes some factors more than others, which means insurers may quote the same driver vastly different rates for the same coverage. That’s why it’s important to get multiple quotes before you purchase a policy.

Factors Related to the Driver

Factors Related to the Vehicle

Factors Related to Location

  • Age
  • Gender (except where prohibited by law)
  • Marital status
  • Driving history
  • Credit score (except where prohibited by law)
  • Gap in coverage
  • Frequency/amount of driving
  • Make/model
  • Speed and performance
  • Size
  • Safety features
  • Age
  • Severe weather/natural disasters
  • Population density/congestion
  • State laws on required coverage
  • No-fault state laws
 

Personal Factors That Can Affect Your Insurance Premiums

Insurers look at many factors to decide how much auto insurance costs. Some of those factors are beyond your control.

Age

Age has a significant effect on car insurance rates. Drivers 25 and under are generally considered riskier than middle-aged drivers because they don’t have much experience. Rates are highest for teen drivers, then they begin to fall in the early 20s as drivers gain more experience behind the wheel. Premiums tend to be lowest for drivers in their 40s, 50s, and 60s, then climb from the age of 70 onward.

A full-coverage policy for a 20-year-old with a clean driving record will cost about $3,000 per year. A 25-year-old with a good driving record can expect to pay around $2,000 in annual premiums for a full-coverage policy. Insurance rates for younger drivers can vary due to several other factors, such as the type of vehicle and zip code.

Gender

Young males usually pay higher insurance premiums than females of the same age. That’s not always the case, however, since California, Hawaii, Massachusetts, Pennsylvania, North Carolina, Montana, and some parts of Michigan prohibit auto insurance companies from considering gender when setting premiums.

Marital Status

Your marital status can affect your insurance rates. Married people are statistically less likely to be involved in car accidents than single people. This may be because married drivers think about the safety and financial security of their family members more than single drivers and therefore tend to be more cautious. 

In addition, married couples typically enjoy lower premiums because they have car insurance policies that cover multiple vehicles and drivers. They also frequently bundle policies for auto, homeowners, and life insurance through the same company. All those actions can make customers eligible for discounts.

Credit Score

You may be surprised to learn that your credit score can affect the amount you pay for car insurance. Most insurers look at a driver’s credit score when setting premiums (except in California, Hawaii, and Massachusetts, where the practice is illegal). Drivers with lower credit scores tend to file more insurance claims than drivers with better credit.

Driving History

Your accident history and any tickets you have received can affect your auto insurance rates. Multiple tickets or citations for serious offenses, such as reckless driving or DUI, can cause your insurance rates to skyrocket. Yahoo! Finance cited a study by Insurance.com that found that a DUI caused insurance premiums to rise by 79 percent on average, while a ticket for reckless driving led to a 73-percent rate hike.

Gap In Coverage

If your car insurance coverage lapsed, your rates will most likely be higher when you get a new policy. You might not have to pay higher premiums, however, if your coverage lapsed because you were deployed for military service.

Driving Habits

How often and how far you drive your car can influence your insurance premiums. The more you drive, the greater the chance that you will get into an accident. Where you park your car is also important since your vehicle will be safer if it’s parked in a garage than it would be on the street or in a shared parking lot.

How Your Car Affects Your Insurance Costs

People who buy fast cars are more likely to get into accidents, so they pay higher auto insurance premiums. 

Sedans, minivans, and SUVs are considered more sensible vehicles, and people who drive them generally have more affordable insurance rates than owners of sports cars. 

Larger cars are safer in accidents since they absorb an impact better than smaller vehicles. 

Safety and security devices, such as anti-lock brakes and anti-theft systems, can lower insurance rates. 

Used cars cost less to insure than new ones. Take those factors into consideration if you’re thinking about buying a car in the near future.

How Your Location Influences Your Car Insurance Rates

Car insurance premiums vary by location. Here is a list of average auto insurance rates broken down by state. The table below shows the places with the highest and lowest average auto insurance premiums.

Most Expensive States to Insure a Car

Least Expensive States to Insure a Car

  • North Carolina
  • Virginia
  • Maine
  • Iowa
  • Idaho
 

Some parts of the U.S. are more prone to severe weather and natural disasters. That means drivers in those locations are more likely to be involved in accidents than those who live in some other parts of the country. Accidents are more common in densely populated locations, so drivers in urban areas tend to pay higher premiums than those in more sparsely populated places. Lower-than-average income and a high percentage of uninsured motorists can raise average rates.

Required And Optional Insurance Coverage

The types of car insurance coverage that are required depend on the state where you live. New Hampshire and Virginia don’t require auto insurance. 

  • In New Hampshire, uninsured residents can be held responsible for up to $50,000 in liability and up to $25,000 in property damage for an accident or have their license and registration suspended. 
  • In Virginia, residents can pay the state $500 per year instead of purchasing car insurance, but that doesn’t provide any coverage if a driver causes an accident.

In states where auto insurance is required, laws require minimum amounts of coverage in specific categories. We want to stress that it’s usually not a good idea to just buy the bare minimum. That might save you money each month, but if a serious accident resulted in damage or injuries beyond your limits, you would be on the hook for the difference. That could put your other assets, such as your home, as well as your family’s financial security, at risk.

When it comes to optional coverage, you need to decide what makes sense for you. For example, personal injury protection (PIP) will cover medical bills for you and your family if you get injured in a car accident. It can also cover funeral costs and lost wages.

If you have a car loan or lease, you’re required to have collision and comprehensive coverage. 

  • Comprehensive covers theft, vandalism, and damage from other causes, excluding crashes.
  • Collision covers damage to your car as a result of a crash. 

If comprehensive and collision coverage aren’t required, it might not be a good idea to pay for them if you don’t drive your car often or if it isn’t worth much.

No-Fault States

In some states, known as no-fault states, each driver injured in an accident must file a claim with his or her own insurance company, regardless of which driver was at fault. In those states, PIP coverage is required.

Several variations on the no-fault model exist in different states. The right to sue for injuries and pain and suffering is restricted to varying degrees.

The following states and territory have no-fault insurance laws. In states marked with an asterisk (*), no-fault auto insurance is optional. That means drivers can choose a no-fault insurance policy or a traditional tort liability policy that allows parties injured in a car accident to sue the party found to be at fault.

Premiums for no-fault insurance coverage vary based on the characteristics of the driver, vehicle, and state. State laws have different minimum amounts of PIP coverage required. 

Michigan requires drivers to have unlimited PIP coverage and $1 million in property protection insurance. Michigan also has car insurance premiums that are much higher than the national average.

Ways To Save On Car Insurance

If you’re currently paying high car insurance premiums, there are several steps you can take to lower your bills:

Ask If You Qualify For Discounts

Car insurance companies offer various discounts to save customers money. You might qualify for lower premiums if you’re a safe driver, a homeowner, a good student, a military member or veteran, or a member of a particular organization. You could also get lower premiums by bundling multiple policies, such as auto, homeowners, and life insurance, through one company.

Buy A Safer And/Or Used Car

If you plan to buy a new car, look for one that is equipped with safety features. Avoid a sports car and consider buying a used vehicle.

Drive Safely And Limit Your Driving

Focus on driving safely. If you have a spotty driving history, you might want to choose an insurance company that will allow you to install a tracker in your vehicle that monitors your driving habits, so you can qualify for safe driving discounts.

Driving a lot puts you at higher risk for an accident. Using public transportation, carpooling, or moving closer to work could lower your premiums.

Improve Your Credit

If you have bad credit, focus on paying your bills on time and lowering your credit card balances. If you have high interest rates, a balance transfer card or debt consolidation loan could help you eliminate your debt faster.

Only Pay For Coverage You Need

Consider eliminating coverage you don’t need. Just don’t focus so much on saving money that you leave yourself underinsured.

Raise Your Deductible

The deductible is the amount of money you will have to pay out of pocket before your insurance company will give you money to settle a claim. Deductibles are typically $500 or $1,000, but they can be higher or lower. A higher deductible usually means lower monthly premiums. Raising your deductible might save you money each month, but you should only make that change if you have enough money in an emergency fund to cover the deductible if you get into an accident.

Compare Quotes From Several Insurers

All auto insurance companies consider a number of factors when setting premiums. Since each company assigns a different amount of importance to each of those factors, you could receive a wide range of quotes for the same coverage. This is why it’s important to get quotes from several companies before you choose a policy.

Should You And Your Spouse Combine Auto Insurance Coverage?

If both you and your spouse have good driving records, combining your coverage on one insurance policy could lower your premiums since many car insurance companies give multi-car discounts. 

Compare your existing policies and get quotes for a combined policy from several insurers. Some insurance companies allow domestic partners, as well as married couples, to have joint policies.

If one of you has a good driving record and the other has had several accidents or received multiple tickets, you should talk to insurers about whether you would be better off with a joint policy or two separate ones. In some cases, combining coverage would cost less, especially if you got a multi-car discount, while in other circumstances you’d save money with separate policies.

Note that even if you got two policies, insurers would consider both your driving records since one of you might drive the other’s car and get into an accident. The person with the better driving record might be able to exclude the other spouse from the policy to keep the rates down, but the policy wouldn’t pay for damage or injuries if the non-covered spouse drove the car and caused an accident.

Comparison of Top Insurance Providers

We’ve looked at many of the leading auto insurance companies in the U.S. and believe these are among the best. Contact individual companies to get specific quotes for your vehicle, location, and situation.

USAA

GEICO

Progressive

  • 5.0 stars overall
  • Best for current and former members of the military and their families
  • Lowest premiums in many states
  • 4.5 stars overall
  • Best for students and military
  • Known for competitive rates and discounts
  • 4.5 stars overall
  • Gives customers several ways to earn discounts
  • Convenient online policy management

State Farm

AAA

Nationwide

  • 4.5 stars overall
  • Best for students
  • Largest U.S. auto insurer
  • Offers apps that that customers earn discounts
  • 4.0 stars overall
  • Regional clubs
  • Insurance coverage available to customers with roadside assistance memberships
  • 4.0 stars overall
  • Best for senior citizens
  • Competitive rates
  • Several discounts available
 

In our opinion, USAA is the best car insurance company, but its coverage isn’t available to everyone. Policies are only issued to individuals who have served in the military and members of their families. USAA’s high customer satisfaction earned it an A++ rating from AM Best and the top spot on J.D. Power’s 2019 Auto Claims Satisfaction Study. In addition, USAA offers the lowest rates in many states, as well as discounts for safe drivers, good students, multi-vehicle policies, and other reasons.

GEICO is a top choice for many drivers because of its competitive prices. It also offers money-saving discounts for current members of the military and veterans, students, loyal customers, and good drivers, as well as drivers whose vehicles are equipped with anti-theft devices. GEICO received an A++ rating from AM Best and an A+ rating from the Better Business Bureau.

Progressive has earned an A+ rating from AM Best. It offers customers several ways to earn discounts. The deductible savings bank reduces the deductible by $50 for each six-month period without a claim. The company’s Snapshot app can monitor customers’ driving and reward safe drivers with lower rates. Customers who bundle policies can enjoy lower premiums.

State Farm is the largest U.S. car insurance company. It has four insurance apps that let customers earn discounts, manage their policies, and submit claims. State Farm also offers a variety of discounts to save customers money.

How To Find Affordable Auto Insurance

It’s difficult to give a straight answer to the question “How much is car insurance?” Insurance companies consider many factors related to a driver, a vehicle, and the location when setting premiums. Each insurer has its own policies and considers some factors more important than others. If you need car insurance, you should request quotes from several companies and compare them to figure out which insurer can provide you with the best coverage at the most affordable rate.

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Inside the Highly Profitable and Secretive World of Payday Lenders

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Illustration by Sarah Maxwell, Folio Art

When Bridget Davis got started in the family’s payday lending business in 1996, there was just one Check ’n Go store in Cincinnati. She says she did it all: customer service, banking duties, even painting walls.

The company had been established two years earlier by her husband, Jared Davis, and was growing rapidly. There were 100 Check ’n Go locations by 1997, when Jared and Bridget (née Byrne) married and traveled the country together looking for more locations to open storefront outlets. They launched another 400 stores in 1998, mostly in strip malls and abandoned gas stations in low-income minority neighborhoods where the payday lending target market abounds. Bridget drove the supply truck and helped select locations and design the store layouts.

But Jared soon fired his wife for committing what may be the ultimate sin in the payday lending business: She forgave a customer’s debt. “A young woman came to pay her $20 interest payment,” Bridget wrote in court documents last year during divorce proceedings from Jared. “I pulled her file, calculated that she had already paid $320 to date on a principle [sic] loan of $100. I told her she was paid in full. [Jared] fired me, stating, ‘We are here to make money, not help customers manage theirs. If you can’t do that, you can’t work here.’ ”

Photograph by Brittany Dexter

It’s a business philosophy that pays well, especially if you’re charging fees and interest rates of 400 percent that can more than triple the amount of the loan in just five months—the typical time most payday borrowers need to repay their debt, says the Pew Charitable Trusts, a nonprofit organization focused on public policy. Cincinnati-based Check ’n Go now operates more than 1,100 locations in 25 states as well as an internet lending service with 24/7 access from the comfort of your own home, according to its website. Since its founding, the company has conducted more than 50 million transactions.

What the website doesn’t say is that many, if not most, of those transactions were for small loans of $50 to $500 to working people trying to scrape by and pay their bills. In most states—including Ohio, until it reformed its payday lending laws in 2019—borrowers typically fork over more than one-third of their paycheck to meet the deadline for repayment, usually in two weeks. To help guarantee repayment, borrowers turn over access to their checking account or deposit a check with the lender. In states that don’t offer protection, customers go back again and again to borrow more money from the same payday lender, typically up to 10 times, driving themselves into a debt trap that can lead to bankruptcy.

Jared and Bridget Davis are embroiled in a nasty court battle related to his 2019 divorce filing in Hamilton County Domestic Relations Court. Thousands of pages of filings and 433 docket entries by April 26 offer the public a rare glimpse into the business operations of Check ’n Go, one of Cincinnati’s largest privately-owned companies, as well as personal lifestyles funded by payday lending.

The company cleared $77 million in profit in 2018, a figure that dipped the following year to $55 million, according to an audit by Deloitte. That drop in revenue may have something to do with the payday lending reform laws and interest rate caps passed recently in Ohio as well as a growing number of other states.


The day-to-day business transactions that provide such profit are a depressing window into how those who live on the edge of financial security are often stuck with few options for improving their situations. If a borrower doesn’t repay or refinance his or her original loan, a lender like Check ’n Go deposits the guarantee check and lets it bounce, causing the borrower to incur charges for the bounced check and eventually lose his or her checking account, says Nick DiNardo, an attorney for the Legal Aid Society of Greater Cincinnati. After two missed payments, payday lenders usually turn over the debt to a collection agency. If the collection agency fails to collect the full amount of the original loan as well as all fees and interest, it goes to court to garnish the borrower’s wages.

That devastating experience is all too familiar to Anthony Smith, a 60-year-old Wyoming resident who says he was laid off from several management positions over a 20-year period. He turned to payday lenders as his credit rating dropped and soon found himself caught in a debt trap that took him years to escape.

Two things happened in 2019, Smith says, that turned around his financial fortunes. First, he found a stable manufacturing job with the Formica Company locally, and then he took his mother’s advice and opened a credit union account. GE Credit Union not only gave him a reasonable loan to pay off his $2,500 debt but also issued him his first credit card in a decade. “I had been a member [of the credit union] for just two months, and I had a credit rating of 520. Can you imagine?” he says. Smith says he is now debt-free for the first time in 10 years.

Consumer advocates say Check ’n Go is one of the biggest payday lending operations in the nation. But knowing its exact ranking is difficult because most payday lending companies, including Check ’n Go and its parent company CNG Holdings, are privately held and reluctant to disclose their finances.

Brothers Jared and David Davis own the majority of the company’s privately held stock. David bought into the company in 1995, but CNG got its game-changing infusion of capital from the brothers’ father, Allen Davis, who retired as CEO of then-Provident Bank in 1998. Allen sold off $37 million in stock options and essentially became CNG’s bank and consultant.

By 2005, however, the sons were part of a public court battle against their father. Allen accused Jared and David of treating his millions in CNG stock as compensation instead of a transfer from his ex-wife (and the brothers’ mother), sticking him with a $13 million tax bill. In turn, the brothers accused Allen of putting his mistress and his yacht captain on the company payroll, taking $1.2 million in fees without board approval, and leading the company into ventures that lost Check ’n Go a lot of money. Several years of legal fighting later, the IRS was still demanding its $13 million. CNG officials did not respond to requests for comment for this story.

Jared and David split $22 million in profit from CNG in 2018 and, according to the Deloitte audit, CNG’s balance sheet showed another $42 million that could be split between the two brothers in 2019. Jared, however, elected not to receive his $21 million distribution “in order to create this artificial financial crisis and shelter millions of dollars from an equitable split between us,” according to Bridget’s divorce filing.

Worse, she claims, Jared said they would be responsible for paying taxes out of their personal accounts rather than from CNG’s company earnings, making her personally responsible for half of the $5.5 million in taxes for 2019. She believes it wasn’t happenstance that $5.5 million was wired to Jared’s private bank account in December of that same year. Bridget has refused to sign the joint tax return, and Jared filed a complaint with the court saying a late tax filing would cost them $1 million in penalties and missed tax opportunities.

“For the duration of our marriage and to the present, Jared has full and complete control of all money paid to us from various investments we have made in addition to our main source of income, CNG,” Bridget wrote in her motion. She suspects that Jared, without her knowledge or consent, plowed the money for their taxes and from other sources of income into Black Diamond Group, the fund that invests in the Agave & Rye restaurant chain. Beyond the original restaurant opened in Covington in 2018, “they have opened four other locations in one year,” she wrote, including Louisville and Lexington. (The ninth location opened in Hamilton this spring.) Agave & Rye’s website touts its Mexican fare as “a chef-inspired take on the standard taco, elevating this simple food into something epic!”

In his response, Jared wrote, “We have very limited regular sources of income.” He says he isn’t receiving any additional distributions from CNG, the couple’s primary source of income, “and this is not within my control. The company has declared that we would not make any further distributions in 2020 given economic circumstances. This decision is based on a formula and is not discretionary.” Agave & Rye helped produce $645,000 in income for Black Diamond in 2020 but has paid out $890,000 in loans, he says. Through August 31, 2020, he wrote, the couple’s “expenses have exceeded income from all sources.”


The divorce case filings start slinging mud when the couple accuses each other of breaking up their 22-year marriage and finding new partners. Jared claims Bridget began an affair during their marriage with Brian Duncan, a contractor she employed through her house flipping business. Bridget, he says, paid Duncan’s company $75,000 in 2018 as well as giving him a personal gift of $70,000 that same year. Jared says she also bought Duncan at least one car and purchased a house for him near hers on Shawnee Run Road for $289,000, then loaned money to Duncan. Jared says Duncan has been late in repaying the note.

While Bridget says Duncan has been drug-free for several years, he has a rap sheet with Hamilton County courts from 2000 to 2017 that runs five pages long. It lists a half-dozen counts of drug abuse and drug possession, including heroin and possession of illegal drug paraphernalia; assaulting a police officer; stealing a Taser from a police officer; criminal damaging while being treated at UC Health; more than a dozen speeding and traffic violations; a half-dozen counts of driving with a suspended license; receiving stolen property; twice fleeing and resisting arrest; three counts of theft; two counts of forgery; and one count for passing bad checks.

Bridget has fired back that Jared not only is hiding his money from her but spending it lavishly on vacations, resorts, and high-end restaurants with his new girlfriend, Susanne Warner. Bridget says Jared gifted Warner with $40,000 without Bridget’s knowledge, then declared it on their joint tax return as a “contribution.” Bridget’s court filings include photocopies of social media posts of Jared and Warner globetrotting from summer 2019 to summer 2020: vacation at Beaver Creek Village in Avon, Colorado; cocktails at High Cotton in Charleston, South Carolina, and dinner at Melvyn’s Restaurant and Lounge in Palm Springs, California; getaways at resorts in Nashville and at a lakefront rental on Norris Lake ($600 per night); in the Bahamas at a Musha Cay private residence ($57,000 per night), at South Beach in Miami, and at a private beach at Fisher Island; in Mexico at Cabo San Lucas; in the U.S. Virgin Islands at Magen’s Bay and on a private yacht ($4,500 per night); in California at Desert Hot Springs, the Ritz-Carlton in Rancho Mirage, and Montage at Laguna Beach; and in the Bahamas at South Cottage ($2,175 per night).

For her part, Bridget has gone through some of the top lawyers in town faster than President Trump during an impeachment—six in all, two of whom she’s sued for malpractice. She sent four binders of evidence to the Ohio Supreme Court, asking for the recusal of Hamilton County Judge Amy Searcy and claiming Searcy was biased because of campaign donations from Jared and his companies. Rather than deal with the list of questions sent to her by Chief Justice Maureen O’Connor, Searcy stepped down. Two other judges have since stepped into the fray, and in March Bridget filed for a change of venue outside of Hamilton County, arguing she can’t get a fair trial in her hometown. At press time, a trial date had been set for June 28 in Hamilton County.

The poor-mouthing in the divorce case has reached heights of comic absurdity. Jared claims he’s “illiquid” because he didn’t get his distribution from CNG in 2019. Bridget has received debt collection notices for the nearly $21,000 owed on her American Express card and a $735 bill from Jewish Hospital. There’s no sign yet that anyone is coming to repossess her Porsche, which according to her filings has a $5,000 monthly payment. Each party has received $25,000 a month in living expenses, an amount later reduced to $15,000 under a temporary legal agreement while the divorce case is being sorted out. Court filings show that Jared’s net worth is almost $206 million and Bridget’s is $22.5 million.


In the early 1990s, Allen Davis was raising eyebrows at Provident Bank (later bought by National City), and not only because of his very unbanker-like look of beard, ponytail, and casual golf wear. He was leading the company into questionable subprime home loans for people with bad credit and a frequent-shopper program for merchants, though the bank’s charter barred him from getting involved in full-blown predatory lending practices. With guidance and funding from his father, Jared, at age 26, launched Check ’n Go in 1994 and became a pioneer in the payday lending industry. Jared and his family saw there were millions of Americans who didn’t have checking or savings accounts (“unbanked”) or an adequate credit rating (“underbanked”) but still needed loans to meet their everyday expenses. What those potential customers did have was a steady paycheck.

Conventional banks share a big part of the blame for the nation’s army of unbanked borrowers by imposing checking account fees and onerous penalties for bounced checks. In 2019, the Federal Deposit Insurance Corporation estimated there were 7.1 million U.S. households without a checking or savings account.

The Davises launched Check ’n Go on the pretext that it would “fill the gap” for people who occasionally needed to borrow money in a hurry—a service for those who couldn’t get a loan any other way. But consumer advocates say the real business model for payday lending isn’t a service at all. The majority of the industry’s revenue comes from repeat business by customers trapped in debt, not from borrowers looking for a quick, one-time fix for their financial troubles.

Ohio’s payday lending lobbyists got a strong hold on the state legislature in the late 1990s, and by 2018 Democratic gubernatorial candidate Richard Cordray could rightfully claim in a campaign ad that “Ohio’s [payday lending] laws are now the worst in the nation. Things have gotten so bad that it is legal to charge 594 percent interest on loans.” His statement was based on a 2014 study by the Pew Charitable Trusts.

The frustration for consumer advocates was that Ohioans had been trying to reform those laws since 2008, when voters overwhelmingly approved a ballot initiative placing a 28 percent cap on the interest of payday loans. But—surprise!—lenders simply registered as mortgage brokers, which enabled them to charge unlimited fees.

The Davis family and five other payday lending companies controlled 90 percent of the market back then, an express gravy train ripping through the poorest communities in Ohio. The predatory feeding frenzy, especially in Ohio’s hard-hit Rust Belt communities, prompted a 2017 column at The Daily Beast titled, “America’s Worst Subprime Lender: Jared Davis vs. Allan Jones?” (Jones is founder and CEO of Tennessee-based Check Into Cash.) In 2016 and 2017, consumer advocates mustered their forces again, and this time they weren’t allowing for loopholes. The Pew Charitable Trusts joined efforts with bipartisan lawmakers and Ohioans for Payday Loan Reform, a statewide coalition of faith, business, local government, and nonprofit organizations. Consumer advocates found a legislative champion in State Rep. Kyle Koehler, a Republican from Springfield.

It no doubt helped reform efforts that former Ohio Speaker of the House Cliff Rosenberger resigned in spring 2018 amid an FBI investigation into his cozy relationship with payday lenders. Rosenberger had taken frequent overseas trips—to destinations including France, Italy, Israel, and China—in the company of payday lending lobbyists. In April 2019, Ohio’s new lending law took effect and, since then, has been called a national model for payday lending reform that balances protections for borrowers, profits for lenders, and access to credit for the poor, according to the Pew Charitable Trusts. New prices in Ohio are three to four times lower for payday loans than before the law. Borrowers now have up to three months to repay their loans with no more than 6 percent of their paycheck. Pew estimates that the cost of borrowing $400 for three months dropped from $450 to $109, saving Ohioans at least $75 million a year. And despite claims that the reforms would eliminate access to credit, lenders currently operate in communities across the state and online. “The bipartisan success shows that if you set fair rules and enforce them, lenders play by them and there’s widespread access to credit,” says Gabe Kravitz, a consumer finance officer at the Pew Charitable Trusts.

Other states like Virginia, Kansas, and Michigan are following Ohio’s lead, Kravitz says. Some states, such as Nebraska, have even capped annual interest on payday loans. As a result, Pew researchers have seen a reduction in the number of storefront lending op­erations across the country. Even better, Kravitz says, there’s no evidence that borrowers are turning instead to online payday lending operations.

Cincinnati is one of five cities chosen for a grant to replicate the success of Boston Builds Credit, an ambitious effort that city launched in 2017 to provide credit counseling in poor and minority communities by training specialists at existing social service agencies. The program also encourages consumer partnerships with credit unions, banks, and insurance companies to offer small, manageable loans that can help the unbanked and underbanked improve their credit ratings. “Right now, local organizations are all kind of working in silos on the problem in Cincinnati,” says Todd Moore of the nonprofit credit counseling agency Trinity Debt Relief. Moore, who applied for the Boston grant, says he’s looking for an agency like United Way or Strive Cincinnati to lead the effort here.

Anthony Smith is thankful that he’s escaped the downward spiral of his payday loans, especially during the pandemic’s economic turmoil. “I’m blessed for every day I can get paid and have a job during these difficult times, just to be able to pay my bills and meet my responsibilities,” he says. “I’ve always kept a job, but until now I’ve had crappy credit. That doesn’t mean I’m a bad guy.”

Can others worth millions of dollars say the same?

Inside the Highly Profitable and Secretive World of Payday Lenders Source link Inside the Highly Profitable and Secretive World of Payday Lenders



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What’s Questionable Credit and Can I Get a Car Loan With It?

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Questionable’s definition means that something’s quality is up for debate. If a lender says that your credit score is questionable, it’s likely that they mean it’s poor, or at the very least, they’re hesitant to approve you for vehicle financing. Here’s what most lenders consider questionable credit, and what auto loan options you may have.

Questionable Credit and Auto Lenders

Many auto lenders may consider questionable credit as a borrower with a credit score below 660. The credit score tiers as sorted by Experian the national credit bureau, are:

  • Super prime: 850 to 781
  • Prime: 780 to 661
  • Nonprime: 660 to 601
  • Subprime: 600 to 501
  • Deep subprime: 500 to 300

The nonprime credit tiers and below is when you start to get into bad credit territory and may struggle to meet the credit score requirements of traditional auto lenders.

This is because lenders are looking at your creditworthiness – your perceived ability to repay loans based on the information in your credit reports. Besides your actual credit score, there may be situations where the items in your credit reports are what’s making a lender question whether you’re a good candidate for an auto loan. These can include:

  • A past or active bankruptcy
  • A past or recent vehicle repossession
  • Recent missed/late payments
  • High credit card balances
  • No credit history

There are ways to get into an auto loan with questionable credit. Your options can change depending on what’s making your credit history questionable, though.

Questionable Credit Auto Loans

If your credit score is less than stellar, it may be time to look at these two lending options:

  • What Is Questionable Credit and Can I Get a Car Loan With It?Subprime financing – Done through special finance dealerships by third-party subprime lenders. These lenders can often assist with many unique credit situations, provided you can meet their requirements. A great option for new borrowers with thin files, situational bad credit, or consumers with older negative marks.
  • In-house financing – May not require a credit check, and is done through buy here pay here (BHPH) dealers. Typically, your income and down payment amount are the most important parts of eligibility. Auto loans without a credit check may not allow for credit repair and may come with a higher-than-average interest rate.

Both of these car loan options are typically available to borrowers with credit challenges. However, if you have more recent, serious delinquencies on your credit reports, a BHPH dealer may be for you. Most traditional and subprime lenders typically don’t approve financing for borrowers with a dismissed bankruptcy, a repossession less than a year old, or borrowers with multiple, recent missed/late payments.

Requirements of Bad Credit Car Loans

In many cases, your income and down payment size are the biggest factors in your overall eligibility for bad credit auto loans. Expect to need:

  • 30 days of recent computer-generated check stubs to prove you have around $1,500 to $2,500 of monthly gross income. Borrowers without W-2 income may need two to three years of professionally prepared tax returns.
  • A down payment of at least $1,000 or 10% of the vehicle’s selling price. BHPH dealers may require up to 20% of the car’s selling price.
  • Proof of residency in the form of a recent utility bill in your name.
  • Proof of a working phone (no prepaid phones), proven with a recent phone bill in your name.
  • A list of five to eight personal references with name, phone number, and address.
  • Valid driver’s license with the correct address, can’t be revoked, expired, or suspended.

Depending on your individual situation, you may need fewer or more items to apply for a bad credit auto loan. However, preparing these documents before you head to a dealership can speed up the process!

Ready to Get on the Road?

With questionable credit, finding a dealership that’s able to assist you with an auto loan is easier said than done. Here at Auto Credit Express, we want to get that done for you with our coast-to-coast network of special finance dealerships.

Complete our free auto loan request form and we’ll get right to work looking for a dealer in your local area that can assist with many tough credit situations.

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Bad Credit

Entrepreneur Tae Lee Finds Her Fortune

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By Jasmine Shaw
For The Birmingham Times

Birmingham native Tae Lee had plans last year to visit the continent of Africa, the South American country of Columbia, and the U.S. state of Texas.

“I was going to stay in each place for like four to six weeks, and then COVID-19 happened,” she said. “So, I just was like, ‘You know what, I’m just gonna go to Mexico and stay for six months.’”

Once home from Playa Del Carmen, located on Mexico’s Yucatán Peninsula, the 33-year-old entrepreneur put the final touches on “Game of Fortune: Win in Wealth or Lose in Debt,” a financial literacy card game for ages 10 and up.

“We created ‘Game of Fortune’ because we realized there was a gap in learning the fundamentals of money,” said Lee. “We go through life not knowing anything about money and then—‘Bam!’—real life hits. Credit, debt, and bills come at us quick!”

Lee believes the game “gives players a glimpse of real life” by using everyday scenarios to teach them how to make wiser financial decisions without having to waste their own money.

“I feel like [financial literacy] can be learned in ways other than somebody standing up and preaching it to you over and over again,” she said. “You can learn it in ways that are considered fun, as well.”

Which is why “we want the schools to buy it, so we can give students a fun way to learn about financial literacy,” she added.

Lee, also called the “Money Maximizer,” is an international best-selling financial author, speaker, coach, and trainer who is known for her financial literacy books, including “Never Go Broke (NGB): An Entrepreneur’s Guide to Money and Freedom” and the “NGB Money Success Planner High School Edition.” The Birmingham-based financial guru focuses on creating diverse streams of income in the tax, real estate, insurance, and finance industries.

For Lee, it’s about building generational wealth, not debt.

Indispensable Lessons

Lee got her first glance at entrepreneurial life as a child watching her mother, Valeria Robinson, run her commercial cleaning company, V’s Cleaning. Robinson retired in 2019.

“My grandmother had a cleaning service, too,” said Lee. “So, even though I didn’t start out as an entrepreneur, watching my mom and grandma do it taught me a lot.”

Lee grew up in Birmingham and attended Riley Elementary School, Midfield Middle School, and Huffman High School. She then went on to Jacksonville State University, in Jacksonville, Alabama, where she earned bachelor’s degree in physical education. She struggled to find a career in her field and became overwhelmed by student loans.

“My credit and stuff didn’t get bad until after college,” she said. “I was going through school and taking money, but nobody told me, ‘Oh, you’re gonna have to pay all of this back.’”

Before embarking on her extensive career in money management, Lee had not learned the indispensable lessons that she now shares with clients.

“‘Don’t have bad credit.’ That’s all I learned,” she remembers. “Financial literacy just wasn’t taught much. I learned the majority of my lessons as I aged.”

In an effort to ward off collection calls and raise her credit score, Lee researched tactics to strategically eliminate her debt.

“I knew I had to pay bills on time, and I couldn’t be late with payments,” she said.

Lee eventually began helping friends revamp their finances and opened NGB Inc. in 2017 to share fun, educational methods to help her clients build solid financial foundations.

“People were always coming to me like, ‘How do I invest in this?’ and ‘How do I do that?’ So, I said to myself, ‘You know what, people should be paying to pick your brain.’”

Legacy Building

While Lee enjoyed watching her clients reach milestones, like buying a new car with cash or making their first stock market investment, she was also designing “Game of Fortune” to teach the value of legacy building.

“The game gives players the knowledge to build generational wealth, not generational debt,” she said. “It gives you a glimpse of life, money, and what can truly happen if you mismanage your coins.”

Using index cards to create her first “Game of Fortune” sample deck, Lee filled each card with pertinent terms related to debt elimination and credit and wealth building. She then called on a few friends to help her work through the kinks.

Three of her good friends—Barbara Bratton, Daña Brown, and Sha Cannon—were just a few of the people that gave feedback on the sample deck.

“From there I met with Brandon Brooks, [owner of the Birmingham-based Brooks Realty Investments LLC], and four other financial advisors to fine-tune the definitions and game logistics,” Lee said.

Though Lee was unable to land a job in physical education after graduating from college, she now sees her career with NGB Inc. as life’s unexpected opportunity to teach on her own terms.

“Bartending and waitressing taught me that working for someone else was not for me,” she replied. “In order to get the life I always wanted, I had to create my own business.”

In her entrepreneurial pursuits, Lee strives to be an open-minded leader who embraces the need for flexibility.

“COVID-19 has shown me that in entrepreneurship you have to maneuver,” she said. “When life changes, sometimes your business will, too. You may have to change the path, but your ending goal can be the same.”

“Game of Fortune: Win in Wealth or Lose in Debt” is available and sold only on the “Game of Fortune” website: gameoffortune.money. To learn more about Tae Lee and Never Go Broke Inc., visit taelee.money and nevergobroke.money or email tae@taelee.money; you also can follow her on Facebook (https://www.facebook.com/nevergobrokeinc) and Instagram (@nevergobrokeinc).

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