Car insurance is a necessary expense for anyone who owns a vehicle. It can help to protect you financially in the event of an accident, and it can also help to cover the cost of repairs or replacements if your car is damaged or stolen. Knowing the average car insurance cost per month can help you plan your budget and make informed decisions about your coverage.
The average cost of car insurance in the United States is $1,548 per year, or $129 per month. However, this amount can vary significantly depending on a variety of factors, including your age, driving record, type of car, and location. For example, young drivers typically pay more for car insurance than older drivers, and drivers with a history of accidents or traffic violations will also pay more. Additionally, the cost of your insurance will be higher if you live in an area with a high rate of car accidents or theft.
In the next section, we will take a closer look at the factors that affect the cost of car insurance and provide tips for saving money on your monthly premium.
average car insurance per month
Factors affecting cost:
- Age
- Driving record
- Type of car
- Location
- Coverage level
- Deductible amount
- Credit score
- Gender (in some states)
Tips for saving money:
Age
One of the most significant factors that affects the cost of car insurance is your age. Younger drivers, typically those under the age of 25, pay significantly higher rates than older drivers. This is because they are considered to be higher-risk drivers, as they have less experience behind the wheel and are more likely to be involved in accidents.
The exact amount that you will pay for car insurance as a young driver will vary depending on your individual circumstances, such as your driving record and the type of car you drive. However, you can expect to pay anywhere from two to three times more than an older driver with a clean record.
As you get older and gain more experience behind the wheel, your car insurance rates will gradually decrease. Once you reach the age of 25, you will typically see a significant drop in your premium. However, your rates will continue to decrease as you get older, even after you reach the age of 25.
If you are a young driver, there are a few things you can do to lower your car insurance rates. First, maintain a clean driving record. Any accidents or traffic violations will cause your rates to go up. Second, choose a car that is safe and affordable to insure. Third, consider taking a defensive driving course. This can help to show insurance companies that you are a responsible driver and may result in a discount on your premium.
Age is just one of many factors that affect the cost of car insurance. Other factors include your driving record, type of car, location, and coverage level. By understanding how these factors impact your rates, you can make informed decisions about your coverage and save money on your monthly premium.
Driving record
Your driving record is another major factor that insurance companies consider when setting your car insurance rates. A clean driving record will result in lower rates, while a record with accidents or traffic violations will lead to higher rates.
- Accidents:
Any type of accident, regardless of fault, will cause your insurance rates to go up. The more serious the accident, the higher the increase in your rates. For example, a DUI or an accident that results in injuries or property damage will have a much greater impact on your rates than a minor fender bender.
- Traffic violations:
Traffic violations, such as speeding tickets or running a red light, will also cause your insurance rates to increase. The number and severity of the violations will determine how much your rates will go up. For example, a single speeding ticket may only result in a small increase in your rates, while multiple tickets or more serious violations, such as reckless driving, can lead to a significant increase.
- At-fault accidents:
At-fault accidents are accidents in which you are determined to be the responsible party. These accidents will have a greater impact on your insurance rates than accidents in which you are not at fault.
- Number of years of driving experience:
Drivers with more years of experience behind the wheel are typically considered to be lower-risk drivers and will pay lower insurance rates. This is because they have had more time to develop safe driving habits and are less likely to be involved in accidents.
If you have a poor driving record, there are a few things you can do to improve it and lower your car insurance rates.
- Avoid getting into accidents:
This is the most important thing you can do to improve your driving record and lower your insurance rates.
- Obey the traffic laws:
Avoid speeding, running red lights, and other traffic violations.
- Take a defensive driving course:
This can help you to learn safe driving habits and may result in a discount on your insurance premium.
Type of car
The type of car you drive also plays a role in determining your car insurance rates. Insurance companies consider a number of factors related to your car, including its safety features, performance, and value.
Safety features: Cars with more safety features, such as airbags, anti-lock brakes, and electronic stability control, are typically cheaper to insure than cars with fewer safety features. This is because these features can help to prevent accidents and reduce the severity of injuries in the event of an accident.
Performance: High-performance cars, such as sports cars and muscle cars, are typically more expensive to insure than less powerful cars. This is because they are more likely to be involved in accidents and are more expensive to repair.
Value: The value of your car also affects your insurance rates. More expensive cars typically cost more to insure than less expensive cars. This is because the insurance company has to pay more to replace or repair your car in the event of an accident.
In addition to these factors, insurance companies also consider the make and model of your car when setting your rates. Some cars are simply more expensive to insure than others, even if they have similar safety features, performance, and value. This is because insurance companies have historical data on how often certain cars are involved in accidents and how much it costs to repair them.
If you are looking to save money on your car insurance, you should consider choosing a car that is safe, affordable, and has a good safety record. You can also save money by opting for a lower-value car or a car with fewer performance features.
Location
Your location is another important factor that insurance companies consider when setting your car insurance rates. This is because the cost of car insurance varies significantly from state to state and even from city to city.
There are a number of factors that contribute to the variation in car insurance rates by location. Some of these factors include:
- Crime rate: Areas with high crime rates, such as theft and vandalism, will have higher car insurance rates. This is because insurance companies have to pay out more claims in these areas.
- Congestion: Areas with heavy traffic congestion will also have higher car insurance rates. This is because there are more opportunities for accidents in these areas.
- Natural disasters: Areas that are prone to natural disasters, such as hurricanes, earthquakes, and wildfires, will also have higher car insurance rates. This is because insurance companies have to pay out more claims in these areas.
- State insurance regulations: Some states have insurance regulations that require insurance companies to charge higher rates in certain areas. For example, some states have laws that require insurance companies to charge higher rates for young drivers.
If you are moving to a new area, it is important to shop around for car insurance quotes to make sure that you are getting the best rate possible. You may also want to consider getting a usage-based insurance policy, which can help you to save money if you drive less.
Coverage level
The level of coverage you choose will also affect your car insurance rates. There are three main types of car insurance coverage: liability, collision, and comprehensive.
- Liability coverage: This is the minimum amount of coverage required by law in most states. Liability coverage pays for damages to other people's property and injuries in the event of an accident that you cause. It does not cover damages to your own car.
- Collision coverage: This coverage pays for damages to your own car in the event of an accident, regardless of who is at fault. Collision coverage is not required by law, but it is highly recommended.
- Comprehensive coverage: This coverage pays for damages to your own car caused by events other than accidents, such as theft, vandalism, and natural disasters. Comprehensive coverage is not required by law, but it is recommended if you live in an area with a high risk of these types of events.
The higher the level of coverage you choose, the higher your car insurance rates will be. However, it is important to choose a level of coverage that meets your needs and budget.
In addition to these three main types of coverage, there are a number of other optional coverages that you can purchase, such as:
- Uninsured/underinsured motorist coverage: This coverage pays for damages to your car and injuries in the event of an accident caused by an uninsured or underinsured driver.
- Medical payments coverage: This coverage pays for medical expenses for you and your passengers in the event of an accident, regardless of who is at fault.
- Rental car reimbursement coverage: This coverage pays for the cost of a rental car if your car is damaged or stolen.
You should talk to your insurance agent to learn more about the different types of coverage available and to choose a level of coverage that meets your needs and budget.
By understanding the factors that affect your car insurance rates, you can make informed decisions about your coverage and save money on your monthly premium.
Deductible amount
Your deductible is the amount of money that you have to pay out of pocket before your insurance company starts to pay for covered damages. The higher your deductible, the lower your monthly insurance premium will be. However, you should choose a deductible that you can afford to pay in the event of an accident.
For example, if you have a $500 deductible and you get into an accident that causes $1,000 in damages, you will have to pay the first $500 out of pocket. Your insurance company will then pay the remaining $500.
The amount of your deductible will vary depending on the type of coverage and the insurance company. Deductibles for collision and comprehensive coverage typically range from $250 to $1,000, but they can be higher or lower depending on the insurance company and your individual circumstances.
When choosing a deductible, you should consider the following factors:
- Your budget: How much can you afford to pay out of pocket in the event of an accident?
- Your risk tolerance: How comfortable are you with the risk of having to pay a large deductible in the event of an accident?
- The cost of your car: If you have an expensive car, you may want to choose a lower deductible to protect your investment.
- Your driving record: If you have a good driving record, you may be able to qualify for a lower deductible.
You should talk to your insurance agent to get a quote for different deductible amounts and to help you choose a deductible that meets your needs and budget.
By understanding the factors that affect your car insurance rates, you can make informed decisions about your coverage and save money on your monthly premium.
Credit score
In some states, insurance companies are allowed to use your credit score to determine your car insurance rates. This is because studies have shown that people with good credit scores are less likely to file claims.
- Good credit score:
If you have a good credit score, you may be eligible for a lower car insurance rate.
- Bad credit score:
If you have a bad credit score, you may be charged a higher car insurance rate.
- No credit score:
If you do not have a credit score, you may be charged a higher car insurance rate.
- States that do not allow credit score to be used:
There are a few states that do not allow insurance companies to use credit score to determine car insurance rates. These states include California, Hawaii, Massachusetts, Michigan, and Oregon.
If you live in a state where credit score is used to determine car insurance rates, you can improve your credit score by:
- Paying your bills on time:
This is the most important factor in determining your credit score.
- Keeping your credit utilization low:
This means not using too much of your available credit.
- Getting a credit mix:
This means having a variety of different types of credit, such as credit cards, loans, and mortgages.
- Disputing any errors on your credit report:
If you find any errors on your credit report, you can dispute them with the credit bureau.
Improving your credit score can take time, but it is worth it if you can save money on your car insurance.
Gender (in some states)
In a few states, insurance companies are allowed to use gender as a factor in determining car insurance rates. This is because, statistically, men are more likely to be involved in accidents than women.
- Male drivers:
In states where gender is used to determine car insurance rates, male drivers typically pay higher rates than female drivers.
- Female drivers:
In states where gender is used to determine car insurance rates, female drivers typically pay lower rates than male drivers.
- States that do not allow gender to be used:
There are a few states that do not allow insurance companies to use gender to determine car insurance rates. These states include California, Hawaii, Massachusetts, Michigan, and Pennsylvania.
- Gender discrimination:
The use of gender to determine car insurance rates has been criticized as being discriminatory. However, insurance companies argue that they are simply using statistics to determine risk.
If you live in a state where gender is used to determine car insurance rates, there is not much you can do to lower your rates based on your gender. However, you can still save money on your car insurance by shopping around for quotes and by choosing a higher deductible.
FAQ
Here are some frequently asked questions about the average car insurance cost per month:
Question 1: What is the average car insurance cost per month?
Answer 1: The average car insurance cost per month in the United States is $129.
Question 2: What factors affect the cost of car insurance?
Answer 2: The cost of car insurance is affected by a number of factors, including your age, driving record, type of car, location, coverage level, deductible amount, credit score, and gender (in some states).
Question 3: How can I save money on my car insurance?
Answer 3: There are a number of ways to save money on your car insurance, including shopping around for quotes, choosing a higher deductible, taking a defensive driving course, and maintaining a good credit score.
Question 4: What is the best way to compare car insurance quotes?
Answer 4: The best way to compare car insurance quotes is to use an online comparison tool. This will allow you to compare quotes from multiple insurance companies side-by-side.
Question 5: What is a deductible?
Answer 5: A deductible is the amount of money that you have to pay out of pocket before your insurance company starts to pay for covered damages.
Question 6: What is the difference between liability, collision, and comprehensive coverage?
Answer 6: Liability coverage pays for damages to other people's property and injuries in the event of an accident that you cause. Collision coverage pays for damages to your own car in the event of an accident, regardless of who is at fault. Comprehensive coverage pays for damages to your own car caused by events other than accidents, such as theft, vandalism, and natural disasters.
Question 7: What is the best way to choose a car insurance company?
Answer 7: The best way to choose a car insurance company is to research different companies and compare their rates, coverage options, and customer service ratings.
Closing Paragraph for FAQ:
These are just a few of the most frequently asked questions about car insurance. If you have any other questions, you should talk to your insurance agent.
In addition to the information in the FAQ, here are a few additional tips for saving money on your car insurance:
Tips
Here are a few additional tips for saving money on your car insurance per month:
Tip 1: Shop around for quotes.
The best way to find the cheapest car insurance rate is to shop around and compare quotes from multiple insurance companies. You can do this online or through an insurance agent.
Tip 2: Choose a higher deductible.
The higher your deductible, the lower your monthly insurance premium will be. However, you should choose a deductible that you can afford to pay in the event of an accident.
Tip 3: Take a defensive driving course.
Taking a defensive driving course can help you to learn safe driving habits and may result in a discount on your car insurance premium.
Tip 4: Maintain a good credit score.
In some states, insurance companies are allowed to use your credit score to determine your car insurance rates. By maintaining a good credit score, you can save money on your car insurance.
Closing Paragraph for Tips:
By following these tips, you can save money on your car insurance per month without sacrificing coverage.
Now that you know how to save money on your car insurance, you can make informed decisions about your coverage and protect yourself financially in the event of an accident.
Conclusion
The average cost of car insurance per month in the United States is $129. However, this amount can vary significantly depending on a number of factors, including your age, driving record, type of car, location, coverage level, deductible amount, credit score, and gender (in some states).
By understanding the factors that affect your car insurance rates, you can make informed decisions about your coverage and save money on your monthly premium. Here are a few tips for saving money on your car insurance:
- Shop around for quotes.
- Choose a higher deductible.
- Take a defensive driving course.
- Maintain a good credit score.
By following these tips, you can save money on your car insurance without sacrificing coverage.
Closing Message:
Car insurance is an important expense, but it is one that you cannot afford to go without. By shopping around for quotes and choosing the right coverage, you can find a car insurance policy that meets your needs and budget.