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U.S. drivers pay a high price relative to international drivers to keep their cars insured. The national average cost for a full coverage car insurance policy is $193 per month while liability-only insurance costs an average of $102 per month. But your individual premium will depend on where you live, what you drive, and how old you are, among other factors.
Smart shoppers can also find ways to lower car insurance costs, like comparing quotes, taking advantage of discounts, and choosing a high deductible. Before you panic over the price of an auto policy, learn what impacts costs and how to save.
Factors that impact your car insurance rates
Age
Car insurance rates tend to decrease for drivers as they age and gain more experience on the road. Since teenagers are more likely to be in a crash than any other age cohort, policies that include a teen driver cost the most. Rates begin decreasing for drivers in their 20s, and drivers in their 60s pay the lowest premiums.
Auto insurance rates increase slightly for drivers in their 70s due to a higher risk of fatal crashes and functional impairments.
| Full coverage | Liability-only coverage | |
| Teen | $366 | $195 |
| 20s | $248 | $132 |
| 30s | $192 | $102 |
| 40s | $177 | $94 |
| 50s | $160 | $85 |
| 60s | $150 | $80 |
| 70s | $162 | $86 |
| Data provided by Insurify. | ||
Driving record
If you have infractions on your driving record, such as at-fault accidents, speeding tickets, or a DUI, you'll pay higher premiums. Car insurance companies will view your blemished driving history as a sign that you drive irresponsibly or are prone to accidents. Some auto insurers also offer discounts for drivers with a clean record, further widening the difference in premiums.
| Full coverage | Liability-only coverage | |
| DUI on record | $311 | $165 |
| Accident on record | $273 | $145 |
| Ticket on record | $264 | $140 |
| Data provided by Insurify. | ||
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Credit score
In most states, auto insurance companies use your credit-based insurance score when setting your premiums. Research shows poor credit history is correlated with higher losses, which means insurance companies spend more when paying claims for bad credit policyholders. FICO and other credit-scoring agencies generate credit-based insurance scores based on information in your credit report.
Ninety-five percent of auto insurers reference credit-based insurance scores when underwriting car insurance policies in states where the practice is legal. But several states prohibit insurers from using insurance scores or limit their use, including California, Hawaii, Maryland, Michigan, and Massachusetts.
| Full coverage | Liability-only coverage | |
| Excellent credit | $190 | $101 |
| Good credit | $183 | $97 |
| Average credit | $186 | $99 |
| Poor credit | $231 | $123 |
| Data provided by Insurify. | ||
Vehicle make and model
A luxury sports car costs more to insure than an affordable yet reliable Subaru or Toyota. The difference is due not only to the MSRP of the vehicle, but also factors like:
- Security features and likelihood of theft
- Safety equipment and safety record of the model
- Cost to repair the vehicle
- Likelihood of damage to other cars
The age of your vehicle also impacts the cost of repairs or replacement, which affects your car insurance premiums. Newer cars tend to be more expensive to insure, especially for full coverage. But many auto insurers offer discounts for safety features, and some even offer a new car discount.
Average rate:
Vehicle use
How you use your car impacts your rates. Car insurance companies consider factors like:
- Mileage: If your annual mileage estimate is high, you'll pay a higher premium because more time on the road means more opportunity for accidents. Drivers who commute to work will pay more than those who only drive on occasion. Some auto insurers, like Nationwide, offer pay-per-mile insurance programs with fluctuating premiums based on your actual mileage.
- Business vs. personal use: Many auto insurers will cover your personal vehicle for occasional business use, but you may pay a higher premium. If you use your car primarily for business, you'll likely need a commercial auto policy.
- Rideshare activity: If you drive for a rideshare company like Uber or Lyft, your personal auto policy won't cover claims for damages that occur between logging onto the app and dropping off the passenger. But many car insurance companies offer a rideshare endorsement you can add to your policy for an additional premium.
Location
Car insurance rates vary by state, city, zip code, and even where you park your car. Insurers set rates based on your location because it impacts the following:
- Theft and vandalism rates: Dense urban areas tend to experience more theft and vandalism than rural counties or small towns. Parking your car in a secure garage reduces the risk, which helps lower your premium.
- State and local legal processes and fees: Some areas are more litigious than others, and lawyers charge different rates from one area to the next, which affects the cost of a claim that requires legal representation.
- Healthcare costs: Some areas have higher medical care costs than others.
- Car repair costs: Mechanic pricing impacts the insurance company's costs when you need a repair.
- Climate: You'll pay more for comprehensive coverage in areas prone to weather events like hailstorms.
| Full coverage | Liability only | |
| Alabama | $142 | $60 |
| Arkansas | $209 | $105 |
| Arizona | $161 | $86 |
| California | $214 | $101 |
| Colorado | $236 | $108 |
| Connecticut | $209 | $122 |
| Washington D.C. | $377 | $208 |
| Delaware | $277 | $167 |
| Florida | $248 | $174 |
| Georgia | $237 | $153 |
| Iowa | $128 | $64 |
| Idaho | $120 | $69 |
| Illinois | $163 | $79 |
| Indiana | $139 | $73 |
| Kansas | $162 | $86 |
| Kentucky | $173 | $111 |
| Louisiana | $213 | $123 |
| Massachusetts | $177 | $104 |
| Maryland | $344 | $213 |
| Maine | $148 | $82 |
| Michigan | $273 | $170 |
| Minnesota | $205 | $110 |
| Missouri | $180 | $92 |
| Mississippi | $193 | $94 |
| Montana | $163 | $76 |
| North Carolina | $107 | $62 |
| North Dakota | $135 | $79 |
| Nebraska | $173 | $83 |
| New Hampshire | $112 | $59 |
| New Jersey | $175 | $146 |
| New Mexico | $154 | $70 |
| Nevada | $255 | $157 |
| New York | $301 | $188 |
| Ohio | $122 | $68 |
| Oklahoma | $171 | $84 |
| Oregon | $147 | $96 |
| Pennsylvania | $178 | $93 |
| Rhode Island | $190 | $115 |
| South Carolina | $275 | $172 |
| South Dakota | $141 | $59 |
| Tennessee | $138 | $66 |
| Texas | $226 | $117 |
| Utah | $170 | $104 |
| Virginia | $197 | $111 |
| Vermont | $149 | $66 |
| Washington | $171 | $90 |
| Wisconsin | $140 | $67 |
| West Virginia | $157 | $79 |
| Wyoming | $100 | $50 |
| Data provided by Insurify. | ||
Average rates by carrier
Some car insurance companies offer cheaper premiums than others. Some of the best car insurance companies charge less than the national average, including GEICO, State Farm, and Allstate. Keep in mind that the cheapest insurer varies by state, and each insurer weighs your information a little differently when determining premiums. The table below may help you identify some of the more affordable auto insurers, but it's wise to compare customized quotes to find the cheapest premium.
| Company name | Average monthly full coverage | Average monthly liability-only coverage |
| USAA | $99 | $46 |
| GEICO | $118 | $55 |
| State Farm | $119 | $55 |
| Allstate | $132 | $62 |
| Progressive | $148 | $101 |
| American Family | $157 | $72 |
| Nationwide | $181 | $85 |
| Travelers | $191 | $90 |
| National average | $199 | $105 |
| Farmers | $236 | $110 |
| Liberty Mutual | $250 | $169 |
| Data sourced from Insurify | ||
Money-saving strategies
Since time machines only exist in science fiction, it's not possible to change your age or undo your driving record to get a lower premium. Some of the factors affecting your car insurance rates are outside of your control. But there are many ways to save money on car insurance.
- Compare quotes: Since premiums vary between companies, you should collect a few quotes to find the best deal. You can use a quote comparison tool, get a quote from the insurer online or by phone, or work with an agent or broker. You should also shop around again near your policy renewal.
- Choose a high deductible: Full coverage insurance features a deductible, which is a flat amount you pay before your insurer pays for a claim. Choosing a higher deductible lowers your monthly premium significantly — increasing from a $200 deductible to $1,000 could save you 40% or more. Just make sure you have enough money in an emergency fund to cover your share of the repair costs.
- Take a driving course: Some insurance companies offer discounts for taking an approved driver training or defensive driving course.
- Enroll in a usage-based program: Many auto insurance companies offer usage-based, or telematics, programs that reward you and/or discount your premium based on your driving behavior, which the company monitors through your mobile phone or a plug-in device. If you're a safe driver and avoid nighttime driving, speeding, and distractions, you can save.
- Ask about other discounts: Some discounts may not be reflected in your initial quote, so make sure to ask the insurance agent whether you're eligible for savings. Many companies offer a homeowner discount, payment discounts, affiliation discounts, student discounts, and/or multi-policy discounts for bundling your auto coverage with another insurance type.
- Improve your credit: Take steps to improve your credit, like paying down debt and making on-time payments. Once you achieve a higher credit score, compare quotes again.
- Drop unnecessary coverages: Make sure you don't pay for coverage you don't need. Some experts recommend dropping collision and comprehensive coverage on older cars worth less than ten times the full coverage premium, but make sure you can replace your car or have alternative transportation in case your car is totaled. You should also avoid unnecessary add-ons and drop GAP coverage once your loan balance is less than the value of your car.
FAQs
How can I lower my car insurance premium?
There are a few ways you can reduce your car insurance premium. Consider increasing your deductible, enrolling in a usage-based program, changing your coverage, or shopping around for a better rate.
Does it make sense to pay annually instead of monthly?
Some insurance companies offer a discount for paying your premium in full. This can save you money in the long run, assuming you can afford to pay all at once. Most companies allow you to cancel your policy at any time and provide a prorated premium refund, so there's typically no risk involved with paying annually.
How long do accidents and tickets affect my rates?
It depends on the type and number of violations, the laws in your state, and your insurance company. Tickets and accidents typically affect your premium for three to five years.
Is $500 a lot for car insurance?
Yes, $500 is a high monthly premium for car insurance. The national average premium is
$193/month for full coverage. But a $500 monthly premium for car insurance is not unheard of, particularly for policies that include teen drivers in expensive states.
Bottom line
How much you pay for car insurance depends on a number of factors. Many of these factors, like your age, driving record, and location, are outside of your control. But you can snag a lower premium by choosing the right company, opting for a high deductible, and taking advantage of discounts and usage-based programs.
The average cost of car insurance is $193 per month for full coverage and $102 per month for liability-only coverage, but many major insurers offer cheaper average rates. Compare car insurance rates from multiple companies to find the right fit for your budget.
Average rate:
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