How Much Does the Average American Spend Per Month on Car Insurance?
Last Updated on November 25, 2020
Auto insurance is one of the biggest monthly expenses for many Americans. In fact, behind mortgage, rent, and auto loan payments, auto insurance is the largest bill that Americans pay on a monthly basis.
So how much does the average American pay per month on auto insurance? Are you spending more than most people? Or is your monthly premium average? Keep reading to find out how much the average American spends per month on car insurance.
How Much Does an Average American Pay for Insurance?
According to the National Association of Insurance Commissioners, the average American spends approximately $900 per year on car insurance, which works out to $75 per month.
In 2015, for example, the NAIC reported that the average American driver spent $889.01, or $74.08 per month, on car insurance.
Remember that this number includes car insurance prices from across the United States, and car insurance costs vary widely between states. Car insurance in Michigan, for example, is infamously expensive, while drivers in Idaho, North Carolina, and Iowa pay some of the cheapest prices for car insurance.
The average Idaho driver, for example, paid $573.83 for car insurance in 2015, or just $47.82 per month.
The average driver in New Jersey, meanwhile, paid $1,265.69 per year for car insurance in 2015, or $105.47.
In other words, drivers in the most expensive states are paying twice as much for car insurance each month as drivers in the least expensive states – there’s a significant difference in prices across the United States.
Keep in mind that all of these numbers are averages. That means, roughly speaking, approximately half of the drivers in the United States pay less than $74.08 per month for car insurance, while half pay more.
Comparison Shop to Lower your Car Insurance Prices
In many cases, the difference between paying $150 per month for car insurance and $75 per month is shopping around for car insurance.
Take a few minutes to shop for car insurance online today and you may be surprised by what you find. Request a quote from insurance companies serving your area. Within a few minutes, you might get a quote that’s 20% or 30% less than your current monthly insurance cost.
Why Am I Paying More than $75 Per Month for Car Insurance?
Most studies show that the average American spends about $70 to $90 per month for car insurance. In some states, the average number is much higher, while in other states, it’s much lower.
Why are you paying more than $75 per month for car insurance? Does this rate seem particularly low to you? Well, here are some of the factors that go into calculating your car insurance rates:
Basic Demographics
Sometimes, you’re paying high car insurance prices for things outside of your control. Your age and your gender, for example, have an enormous impact on car insurance rates. Your marital status also raises or lowers car insurance rates.
A 20-year-old unmarried male, for example, will pay significantly more for car insurance than a 22-year-old married female, generally speaking.
Trends reverse with age: a 50-year-old male driver typically pays less for car insurance than a female driver of the same age, all other things being equal.
If demographics are affecting car insurance rates, then there’s nothing you can really do about it. Don’t get married just to save money on car insurance!
Location
Your location plays another huge role in the price of car insurance. Different states have different insurance requirements, for example. Some states are no-fault states, which typically means higher costs but better coverage.
But it’s not just your state that affects insurance prices: your home location (typically based on your ZIP code) also plays a role. If you live in a rough neighborhood with a high crime rate, then you’ll likely pay more for comprehensive insurance than someone living in a safe neighborhood. That’s because your car is more likely to be stolen, vandalized, or damaged in a rough neighborhood compared to a safe neighborhood.
Driving Record
Your driving record plays a crucial role in the cost of car insurance. Someone with multiple DUIs, at-fault accidents, or other incidents, for example, can expect to pay more for car insurance than someone with a clean driving record. This part is obvious.
However, even if you have multiple at-fault accidents, you can still get affordable rates on car insurance. You just need to spend more time shopping around. With a bit of searching, you can find perfectly affordable car insurance that meets your unique needs.
Final Word – Average Auto Insurance Rates in America
The average American driver pays about $75 per month for car insurance. Drivers in some states – like New Jersey and California – will typically pay much more per month, while drivers in other states – like Idaho and North Carolina – will pay much less per month.
If you’re paying less than $75 per month for car insurance today, then good job! You’ve beaten the average!
If you’re paying more than $75 per month for car insurance, then you’re above average for America – but you may be at or below average in your state. To make sure you’re paying the most competitive rates on car insurance, compare quotes online today.
