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Everyone who has a car in the U.S. needs auto insurance, but most people don’t know what’s a fair price. Choosing auto insurance isn’t a decision that you’ll make lightly, but if you don’t know how much you should be paying, you may end up paying much higher premiums than necessary.
That’s where we come in. Using our network of thousands of local agents, we’ve compiled information on all the variables that impact the price of your auto insurance, no matter your state, driving record, age, and other factors.
Let’s dig into some average car insurance rates.
The Cost of Auto Insurance: What Affects Premiums?
The national average annual cost of auto insurance in 2020 was $1,047 for full-coverage insurance.
Most people intend to shop for the least expensive plan, but finding a great price isn’t always easy. Many factors affect your monthly auto insurance costs, so there’s no one-size-fits-all pricing. Here’s what affects the cost of your car insurance:
Company
Certain auto insurance companies are more expensive than others, based on a number of factors. Read about the cheapest car insurance to find lower-cost companies.
Credit Score
Your personal credit score has a major impact on the price you’ll pay for car insurance. If you have bad credit and need auto insurance, your average annual premium and auto insurance rates will be higher than the rates for an otherwise similar person with good credit.
Vehicle
The kind of car you drive is a major factor in your auto insurance cost. Insurance providers create vehicle safety ratings based on industry reports and customer claims. Safer vehicles cost less to insure, as they’re less susceptible to damages, injuries, and thefts.
Not only does the manufacturer matter, but also the type of vehicle. See the full coverage insurance cost for drivers paying for different types of vehicles in 2022.1
| Type of vehicle | Average annual cost of full coverage car insurance in 2022 |
|---|---|
| Compact SUV (FWD) | $1,515 |
| Subcompact SUV | $1,527 |
| Medium SUV (4WD) | $1,529 |
| Midsize pickup | $1,537 |
| Small sedan | $1,618 |
| Hybrid vehicle | $1,619 |
| Electric vehicle | $1,619 |
| 1/2 ton/crew- cab pickup | $1,630 |
| Medium sedan | $1,694 |
Demographics
It doesn’t stop there. Auto insurance costs are also influenced by a variety of individual life factors, including some that you can’t control, like your age and sex.
- Age: First-time drivers and teen drivers are statistically more likely to get into accidents, so they have higher premiums. The good news is that their rates will reduce when they turn 25. Learn more about auto insurance costs for teens, auto insurance costs for 16-year-olds, auto insurance costs for 17-year-olds, auto insurance costs for 19-year-olds, and auto insurance costs for 20-year-olds.
- Sex: Auto insurance tends to be more expensive for men, as they’re statistically more likely to get into car accidents. Single males, in particular, have higher collision rates.
- Credit: If you have bad credit and need auto insurance, your average annual premium and auto insurance rates will be higher than those of a demographically identical person with good credit.
FYI
You can get a car insurance quote with no credit check.
- Marital status: Married people pay less for auto insurance than single, widowed, or divorced people.
- Country, state, and city: ecause states have different minimum auto insurance requirements, your cost will differ greatly based on the state where you live and insure your car. In 2020, the most expensive average liability premium was $979 in Louisiana, while the cheapest was $304 in North Dakota.2 Urban areas tend to be more expensive, as they have more incidents of theft, vandalism, and collisions than suburban and rural areas. Read more about the cost of auto insurance in California, the cost of auto insurance in Michigan, the cost of auto insurance in Mexico, the cost of auto insurance in Louisiana, and the cost of auto insurance in Texas.
Coverages
What your auto insurance covers affects the amount you’ll pay monthly for insurance coverage, known as your premium rates. Every state requires minimum coverage for property damage, and every state except Florida and New Jersey requires bodily injury liability, but if you add supplementary coverage, your costs will go even higher.
Driving Record
If you’ve had traffic tickets, car accidents, or a DUI citation in the past, your auto insurance costs will rise. Likewise, they’ll reduce if you have a clean driving record. Learn more about how much auto insurance costs after an accident.
More Factors
A ton of other factors can affect the cost of car insurance, including these:
- Auto laws in your state
- Auto repair costs
- How often you drive
- Gaps in coverage
- Medical/legal costs
- Owning vs. leasing cars, as auto insurance costs more for non-owners
- Per capita disposable income
- Population density
- Rate and form filing laws
- The distance you drive
- Traffic density
- Underwriting and loss adjustment expense
- Use of telematics
>> Related: Lease or Purchase Car Calculator
Note
Some factors won’t affect your car insurance premium costs on their own, like having kids or retiring (unless you drive more or less as a result of either life change).
How to Save on Car Insurance
Want to lower the cost of your auto insurance? You can adjust your deductible, drop supplemental coverage, or get an auto insurance discount.
We’ve seen all sorts of savings, from discounts for defensive driving courses to discounts for students with good grades. You can also save money by bundling different types of coverage together, like buying your home and auto insurance from the same provider. Even though auto insurance can be expensive, there are ways to lower your costs.
Recap
That’s all we have on what auto insurance costs, but if you have done your research and are ready to shop around, check out our pages on cheap auto insurance coverage, how to find cheap car insurance companies, and the best cheap auto insurance for young people. Keep reading for some auto insurance FAQs below.
As we said, pricing your auto insurance isn’t the most transparent process in the world, but hopefully, armed with our data, you can pay the least amount possible for the most comprehensive coverage.
Frequently Asked Questions
Read on to find even more information about car insurance costs.
How much does car insurance usually cost monthly?
The average cost of car insurance is around $87 monthly, as of 2020. However, the average car insurance cost varies greatly by state and other factors. For example, those with bad credit may have higher rates, or someone in an urban area may have a higher rate based on their ZIP code. That’s because people in cities are more likely to file a claim than someone living in, say, rural North Carolina.
How do I reduce the cost of auto insurance?
These are some ways you can reduce the cost of your auto insurance:
- Take advantage of your insurance provider’s discount offers. For example, it might give you a discount if you take a safe driving course or buy an annual policy.
- Drop coverages that aren’t required in your state.
- Increase the size of your deductible.
- Improve your credit score.
- Move to a state with fewer auto insurance requirements and lower minimums.
- Get married.
What are some reasons the cost of auto insurance could change?
These are some reasons that the cost of your auto insurance could change:
- You get married, divorced, separated, or widowed.
- Your credit score changes.
- You move cities or states.
- You get into an accident.
- You get a ticket.
- You get a DUI.
- Your license is suspended or revoked.
- You turn 25.
- You add or drop coverages.
- Your commute changes.
Citations
Your Driving Costs. AAA. (2022).
https://newsroom.aaa.com/wp-content/uploads/2022/08/2022-YDC-Costs-Break-Out-by-Category.pdfAuto Insurance Database Report 2019/2020. NAIC. (2023, Jan).
https://content.naic.org/sites/default/files/publication-aut-pb-auto-insurance-database.pdf