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How Much is Car Insurance?
6 Tips to Estimate Your Car Insurance Cost

How Much is Car Insurance?
6 Tips to Estimate Your Car Insurance Cost

Having car insurance is a legal requirement to drive in most states, so estimating the cost of your policy is essential to establishing an efficient budgeting plan. Understanding the average car insurance cost involves gathering information about all the factors that determine your overall expenses. From there, you can calculate your car insurance monthly cost by getting insurance quotes, which you'll add to your other vehicle costs like loan payments, maintenance, and fuel.

Factors That Affect Car Insurance Rates

Lots of stuff about your ride and your driving habits can swing your car insurance costs in one direction or another. While snagging a quote is the top way to figure out your potential expenses, keep in mind, factors that affect insurance rates seriously dictate whether that estimate will make you smile or wince. Here are six driving-related tips to use when determining whether your insurance will be higher or lower compared to the national average.

Tip #1: Look at Where Your Car is Driven

Some areas can be more hazardous to cars than others, with drivers in large cities often dealing with more accidents, car thefts, and vandalism. Car insurance costs also vary from state to state, with different parts of the country paying much higher premiums. Drivers in Florida pay the most for their car insurance on average, while drivers in Wyoming pay the least (46% less than the national average.) Finding how much more drivers in your state pay is an excellent way to ballpark where your premiums will be.

Tip #2: Factor in Your Age, Sex, and Marital Status

Tip #2: Factor in Your Age, Sex, and Marital Status

The demographics you fit within can also significantly affect your auto insurance cost, specifically your age, sex, and marital status. Young drivers tend to pay higher rates, while women and married drivers often pay lower rates. Other bits of information can also change your policy cost, including your occupation and whether or not you own a home. Make sure to consider all this information when you get quotes for your insurance policy.

Tip #3: Identify What Type of Car You Drive

Your make, model, and even manufacturing year can all influence how much your policy will cost you; this is especially true if you have an expensive or exotic car. Vehicles that are commonly stolen or have flaws that make them easier to steal may also influence your rates. An example of this would be the issues that Kia and Hyundai dealt with concerning their key-based ignition systems; a viral trend revealed that newer model years lacked engine immobilizers, making them much easier to steal.

Tip #4: Estimate How Often You Drive

Tip #4: Estimate How Often You Drive

The more miles you drive, the more likely you are to get in an accident, so yearly mileage is a stat that many insurance companies consider. This works both ways; if you drive less than a certain number of miles each year (on average, 12,000), you may qualify for reduced rates. If your job involves long commutes or you frequently drive for any reason, you will usually make higher monthly payments. Depending on your insurance provider, you may also have the option to choose pay-per-mile car insurance. This means you'd pay a lower than average monthly price but additional charges for the number of miles you drive.

Tip #5: Find Out Your Credit History

In most states, your credit score will also affect the price of the average cost of auto insurance. High credit scores can help lower your monthly payments, while low scores can make your yearly insurance cost much higher. This practice isn't legal in every state, with Hawaii, California, Massachusetts, and Michigan restricting companies from using credit scores to change car insurance rates.

Tip #6: Get a Vehicle History Report

Two of the most critical factors in deciding your insurance payments are your vehicle and driving history. If you have a history of safe driving, no accidents, and no record of moving violations, you will have much lower monthly payments. On the other hand, if you've been convicted of a crime like speeding, reckless driving, or DUI, your payments will almost always be far higher.

Your vehicle history makes a significant impact as well. If your car has ever been totaled or salvaged, companies will see it as a much riskier vehicle to insure. Knowing your vehicle's complete history may be difficult without a vehicle history report. These reports can show you all the available information about your car's accidents, repairs, recalls, and past owners.

How Much Is Car Insurance?

How Much Is Car Insurance?

Average car insurance cost per month will depend on a combination of the above factors. The national average car insurance cost per year was $1630 in 2022. This means the average cost of car insurance per month is around $136. These averages are based on having a full coverage plan, which includes standard liability insurance plus comprehensive and collision insurance. Accidents and subsequent claims can increase this number, while safe driving and a clean history can lower these payments

You'll want to decide how much coverage you need (liability, comprehensive, etc.) and then get quotes from different car insurance companies to see how much you will pay. This will largely be determined by the information you found from following the tips listed above and the data you found from your vehicle history report.

Car Insurance Costs Frequently Asked Questions

How Much Does Car Insurance Cost for a Beginner?

If you are a beginning driver or in your teens, your accident rates are usually higher than average. The insurance rate for first-time drivers reflects this increased risk. On average, full coverage insurance for someone 16 years old (a new driver) will be $3,852.

Which Drivers Generally Pay More For Insurance?

The drivers who pay the highest premiums tend to be those that have a history of accidents, anyone who has been convicted of a DUI, drivers with low credit scores, and teen drivers. How much more you will pay depends on various factors, and drivers with similar histories or behaviors may pay different rates depending on their state.

Does It Cost More To Insure a Leased Car?

Having a lease can influence how much your auto insurance will cost, mainly because some leases will require you to maintain a certain level of insurance. If part of your terms includes a clause concerning comprehensive or full coverage, you'll need to pay whatever rate keeps you on that policy. You may need to adjust your budget to account for this by calculating your lease payments ahead of time. You can do this with free lease and loan calculators, like the free tool available from GoodCar.

How Much Should I be Paying For Car Insurance?

You can get quotes for car insurance ahead of time by requesting estimates from insurance companies. These quotes will be affected by your driving history, previous policies, the type of car you drive, and the state your vehicle is registered in. You can also look at the different factors that influence your car insurance to get a rough idea of whether your premiums will be higher or lower.