How much is the average monthly auto insurance payment? The quick answer is that in the United States, the average car insurance payment per month is approximately $150. Of course, car insurance premiums are based on a variety of factors, including amount of coverage, the state you reside, your geographical location, the make and model of your car, your age and driving record (for example, the average car insurance payment for a teenager is quite a bit higher than the average car insurance payment for a driver over the age of 25!), and a host of discounts that can help reduce your premium.
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How Do Payment Plans Work?
Most car insurance policies are issued for six months to a year, but you can usually arrange for a monthly payment schedule. If you set up a monthly schedule, you will be able to estimate your average monthly price of car insurance. Installment payment fees are usually nominal and do not add much to the monthly payment. Depending on your insurance policy premium, your average monthly car insurance payment can range from $100 a month to $200.
The annual average monthly car insurance payment is approximately $150.
Average auto insurance rates by state are a great thing to research. There are many state averages that can help you out greatly. Different studies use different methodologies (which is why you will see some disparities in the numbers: most likely dealing with the inclusion of high risk drivers, teenage drivers, etc. ) The average monthly car insurance payments by state according to this study done in 2012 is as follows:
Washington D.C.: $98.50
New Hampshire: $66.00
New Jersey: $98.67
New Mexico: $60.58
New York: $93.50
North Carolina: $50.17
North Dakota: $46.17
Rhode Island: $88.25
South Carolina: $62.75
South Dakota: $47.08
West Virginia: $71.42
On average, how much does car insurance cost per month? Now you know… well, kind of, the above numbers are for the year 2012 and there are some conflicting studies that quote the real average at closer to $150/month. So, if someone asks you, “What is the average cost of auto insurance per month?” then you can just say, in typical lawyer fashion, “Well, it depends!” One thing you can know for certain though is how much you will pay for car insurance. To compare personalized car insurance rates and get quotes with a specific rate for you then just enter your zip code in now!
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How Auto Insurance Premiums are Calculated
Auto insurance companies use different methods to calculate car insurance premiums, but the majority of them start with a base rate that is first approved by their state’s Department of Insurance. Once the insurance company has an approved base rate, they take into consideration the age of the driver and his driving record. This is one way that you will be able to estimate a typical car insurance payment.
Young and inexperienced drivers cost more to insure while an experienced driver can get a better rate provided his driving record is relatively clean. New and sporty cars are always more to insure and if you live in an at risk neighborhood for theft or vandalism, you will most likely pay more for your rates as well. Depending on these factors, your average auto insurance payment could fluctuate.
You can usually lower your rates by implementing some security devices and attending some defensive driving courses. If you have more than one vehicle with the same policy it is common to receive a multi-car discount. Furthermore, if you own a home and place your homeowners insurance with the same insurance company as your vehicle, you can qualify for a multi-policy discount. Your insurance company may also offer other discounts, such as good student or accident free incentives, which will help reduce your insurance premium and your monthly car insurance payment.
Paying Your Car Insurance Premiums
Depending on the term of your insurance policy, you may be able to make installment payments instead of paying the entire insurance premium upfront. For example, if you have a six month policy, your payment options would typically be to pay the entire premium at the time of accepting the policy, making two installment payments with the first half being due immediately and the second half being due in three months, or you may be able to make monthly payments. That’s why it doesn’t always make sense to wonder what the average person pays for car insurance per year because, really, people don’t usually pay per year for car insurance. Check with your insurance company and see if they will give you the monthly car insurance cost. Then you will be able to better plan financially!
The fees to arrange a payment schedule are usually nominal, such as $2 for each installment payment, which would ultimately add $12 to your six month premium if you chose to make monthly payments.
The most common and preferred method for most people is to add a small extra fee each time and make those smaller monthly payments rather than to come up with the larger sum that is initially due for the entire insurance premium.
Since the payment fees do not usually add up to much each month, it is fairly easy to calculate your monthly car insurance payment. Simply take your total premium and divide it by how many months are covered by the term. For example, if your premium is $600 for a six month term, then your monthly car insurance payment will be $100 plus the payment arrangement fee, so approximately $102, for example.
It is important to note that even though you have a term policy, if you do not make your payment on time, your insurance can be canceled and the state will be notified. If you choose to cancel your insurance ahead of time, say because you are switching car insurance companies, you are entitled to a prorated refund for any premiums that you paid for your policy in advance.
The Most and Least Expensive Car Insurance States
When it comes to car insurance, there are some states that are historically more expensive than others, with, in alphabetical order, the District of Columbia, Louisiana, Maryland, New Jersey, and New York being some of the most expensive. Some of the least expensive states for car insurance are, alphabetically, Arkansas, Illinois, Iowa, South Dakota, and Vermont. Depending on the state you live in, your average car insurance rates could drastically change. Always remember that not everyone will get the same price on car insurance. The average car insurance rates by state can change according to the person’s place of residence.
Population, congestion, and cost of living are some factors that influence the average monthly car insurance rates by state.
New Jersey tops the list with an annual average car insurance premium of $2,500 while Illinois averaged an annual average low of $1,200. This makes the national average annual premium an approximate $1,800 with $150 then being the national average monthly car insurance payment.
Your monthly car insurance payment may not reflect the average car insurance payment for the state because of all of the factors that apply to your personal policy. Your premium could be higher or lower depending on the type and amount of coverage you select, the deductible you choose, and the discounts you earn.
A typical car insurance monthly payment can change drastically between people due to the various differences in policies, driving records, and many other things. Make sure you have all the basics covered and look for the best deal on insurance! Wondering how much does car insurance usually cost is only of so much use; what you need is to know how much you will pay! This will help you better plan your budget!
Comparing Car Insurance Rates
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