As boring and annoying as it can be, car insurance is a part of almost everyone’s lives. With few exceptions, every driver must have auto insurance before hitting the road, and states have different minimum requirements on coverage for things like bodily injury and liability. If you’re wondering how much car insurance costs, we’ve got you covered and can help you find ways to save money on your next car insurance policy.
How much does car insurance cost in 2023?
Car insurance prices vary wildly from place to place and from driver to driver, but the national average for full-coverage insurance on a vehicle is a little over $2,000 per year, or around $167 per month. That rate is for a driver with a clean record and good credit, and it can climb quickly with accidents and dings on the driver’s credit report.
Nerdwallet found that a good driver with bad credit can pay as much as 61% more than those with good credit scores. Interestingly, having an accident didn’t cause the average rate to rise as much, but a DUI conviction almost doubles the national average cost.
Minimum coverage is much cheaper, totaling $685 for good drivers with good credit. Similar increases apply to people with bad credit, accidents, and DUIs. It’s important to note that minimum coverage should not be viewed as a simple way to save money, however, because the costs to repair your vehicle after an accident can easily surpass any potential savings from a lower level of insurance coverage.
Insurers also charge men more for car insurance, though the gap between average insurance costs for men and women narrows as their age increases. Insurance costs for young men are more than $500 more expensive than for young women, but by age 35, the difference is just $25. At age 50, men and women pay roughly the same, with women paying slightly more than men in some cases.
What is the cheapest car insurance?
It pays to shop around — the following statements are on average, in general, so you need to compare rates for your own car and your own situation. That said, USAA tends to be the cheapest insurer for many drivers, but it’s only available for active, retired, and separated veterans with an honorable discharge. For everyone else, State Farm offers the second-most-affordable rates, on average. Travelers and American Family are next, though AmFam is only available to drivers in 19 states.
You might find a regional insurer that offers better rates, and you may be eligible for discounts that lower your monthly payment further. There may also be job-specific or profession-specific insurance companies, such as California Casualty, which is only available to educators, healthcare professionals, and others.
Which states have the most and least expensive car insurance?
Drivers in Florida paid more than anyone else in the country, with an average insurance cost of $3,605 per year. Maine is on the opposite end of the spectrum, where drivers pay $1,323 for full coverage. Insurers tend to charge more in states and areas where more drivers are involved in car accidents.
Several states tilt toward the more expensive end of the spectrum, including Louisiana at $3,357 per year, Kentucky at $3,357 per year, Rhode Island at $3,300 per year, and Michigan at $3,229 per year.
How much is car insurance for teens and young adult drivers?
Young drivers pay more for car insurance than more experienced vehicle owners. With a clean driving record, the average 20-year-old driver pays $4,372 for full-coverage insurance. Rates for young drivers are also more sensitive to changes in credit scores and traffic citations. Poor credit can impact the average annual insurance costs by up to 50 percent, as 20-year-olds with clean driving records and bad credit paid $6,460.
Vehicles with higher insurance costs
Car insurance costs can vary significantly between vehicle types, and there are a few that tend to cost more. Sports and luxury cars, which are expensive to buy and repair after a crash, are often more costly to insure. Sports cars are also more likely to help you earn a speeding ticket and may be driven more spiritedly than mainstream cars, increasing their risk and cost to insure. Insurance companies also look at how often specific car models are stolen to determine if there’s an increased risk of damage repairs or vehicle replacement. The recent TikTok-inspired thefts of some Hyundai and Kia models are a great example, as some insurers have declined new policies on those vehicles.
Finally, electric vehicles might be more expensive to insure in some cases, as their batteries are shockingly pricey to replace. They are also packed with tech from nose to tail and, in many cases, carry the latest safety tech. All those sensors, cameras, and other electronics are expensive and may require specially-trained technicians to install.
Car insurance discounts
Car insurance can be expensive, but the good news is that most insurance companies offer discount programs, and many people qualify for more than one. Some of the most common programs include good student discounts for younger drivers, teachers and school administrators, law enforcement and first responders, veterans and active military, good drivers, and more.
Some insurance companies offer discounts for installing a monitoring device that tracks your driving speed and style. If the information shows that you were a safe driver and did not drive aggressively or too fast, your insurer gives a small discount as a reward. The tradeoff is that you’re also giving up some privacy and may share more information than you want.
Why is my car insurance so high?
Your car insurance rates can increase when you have a wreck or if your driving record changes for the worse. That means speeding tickets, at-fault accidents, alcohol- or substance-related citations, and more. Insurance companies are constantly monitoring risk, and can adjust your rates accordingly if there is reason to believe that you’re a riskier driver than before.
Students and young drivers often get discounts for good grades and other incentives, so an increase in rates could be related to no longer receiving those benefits. Finally, upgrading to a new car with higher replacement costs can drive your rates higher.
Is a car insurance agent better than a company?
Most agents sell insurance products from a major insurer, so you’re not getting completely different coverage options by going with a local agent. That said, many have access to promotions and other savings options that could help reduce your costs. You may also find that a local agent gives you more customer service options and that it’s easier to get information from a face-to-face interaction over waiting on hold with a distance call center.
How to save money on car insurance
There are several ways you can save money on car insurance, and only one requires you to reduce your level of coverage. Shopping around is one of the best ways to get a reasonable rate on your car insurance. You can compare insurers and may be able to pit them against each other to get the best price. Some insurers offer lower monthly rates in exchange for a higher deductible, but it’s a good idea to do the math to determine how much you’ll save compared to the higher payout down the road.
Keep track of available discounts to ensure you’re getting every possible cost reduction, and monitor your credit score to prevent surprises when applying for new coverage. One of the best ways to save money is to maintain a clean driving record, which includes staying out of trouble for things like speeding and DUIs.
If none of those things apply to you and you still need to save money, reducing your level of coverage could be a possible last resort.
What is liability car insurance, and is it worth the risk?
If you have full coverage insurance on your car, moving to a minimum coverage or liability-only plan can save you hundreds of dollars a year. However, be aware that doing so will change your situation after a crash. If you remove full coverage insurance and are involved in a collision, you may be on the hook to pay for your own repairs and could be faced with big bills if you damage property or incur a citation in the process.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.