Car insurance premiums are based on a variety of factors, including the amount of coverage, the state in which you reside, your geographical location, the make and model of your car, your age, your driving record, 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 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 to $200 a month.
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 — are as follows:
- Alabama: $56.50
- Alaska: $80.17
- Arizona: $77.17
- Arkansas: $57.75
- California: $70.42
- Colorado: $68.92
- Connecticut: $82.58
- Delaware: $85.67
- Washington D.C.: $98.50
- Florida: $88.58
- Georgia: $65.33
- Hawaii: $70.25
- Idaho: $48.58
- Illinois: $61.92
- Indiana: $54.75
- Iowa: $46.25
- Kansas: $49.17
- Kentucky: $62.50
- Louisiana: $89.67
- Maine: $53.67
- Maryland: $78.75
- Massachusetts: $92.75
- Michigan: $77.58
- Minnesota: $65.92
- Mississippi: $62.08
- Missouri: $57.08
- Montana: $57.08
- Nebraska: $51.75
- Nevada: $81.92
- New Hampshire: $66.00
- New Jersey: $98.67
- New Mexico: $60.58
- New York: $93.50
- North Carolina: $50.17
- North Dakota: $46.17
- Ohio: $55.75
- Oklahoma: $56.50
- Oregon: $61.42
- Pennsylvania: $70.75
- Rhode Island: $88.25
- South Carolina: $62.75
- South Dakota: $47.08
- Tennessee: $54.92
- Texas: $70.42
- Utah: $58.83
- Vermont: $58.25
- Virginia: $58.17
- Washington: $70.00
- West Virginia: $71.42
- Wisconsin: $51.25
- Wyoming: $53.25
Now you know how much car insurance costs per month on average . . . sort 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.”
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How Auto Insurance Premiums are Calculated
Once the insurance company has an approved base rate, they consider the age of the driver and his driving record, which 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 that his driving record is relatively clean.
New and sporty cars always cost 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 security devices and attending defensive driving courses. If you have more than one vehicle with the same policy, it is common to receive a multi-car 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 pay in installments instead of paying the entire insurance premium up front.
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, to make two installment payments with the first half being due immediately and the second half being due in three months, or to make monthly payments.
Therefore, 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 to 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 small, 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 — approximately $102.
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 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 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 state average car insurance rates 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 averages an annual average low of $1,200, making the national average annual premium an approximate $1,800.
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 look drastically different among different people due to the varying policies, driving records, and many other factors. Make sure you have all the basics covered and look for the best deal on insurance.
Wondering how much car insurance usually costs is only of so much use. What you need is to know how much you will pay, which will help you plan your budget better.
The best way to find your average monthly rate is to compare the prices that car insurance companies offer. It’s FREE and easy to compare; all you have to do is enter your ZIP code in the box below!