3 Must-Know Facts about Average Monthly Car Insurance Premiums (New)

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Joel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: Aug 7, 2019

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Here's what you need to know...

  • Car insurance premiums are based on a variety of factors
  • Installment fees are usually nominal and do not add much to the monthly payment
  • You can usually lower your rates by implementing security devices and attending defensive driving courses
  • The most common and preferred payment method is to pay in monthly installments
  • Depending on the state you live in, your average car insurance rates could drastically change

Car insurance premiums are based on a variety of factors, including the following:

  • amount of coverage
  • the state in which you reside
  • your zip code
  • the make and model of your car
  • your age
  • your driving record

Keep in mind there are a host of discounts that can help reduce your premium.

We can help you find average car insurance rates instantly! Simply enter your ZIP code above!

Read on to see three facts about average monthly car insurance.

To jump directly to a section, click below:

#1 – Where You Live Impacts the Average Monthly Car Insurance

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.

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:

StateAverage Monthly Premium
Washington D.C.$98.50
New Hampshire$66.00
New Jersey
New Mexico$60.58
New York
North Carolina$50.17
North Dakota$46.17
Rhode Island$88.25
South Carolina$62.75
South Dakota$47.08

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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#2 – Your Gender Makes a Difference in What You Pay

Our team did some extensive research into auto insurance rates by gender. They gathered quotes from two top insurance companies (Geico and Progressive) using identical information for a male customer and a female customer, besides, of course, their sex.

Both fictional individuals are 25 years old, drive the same car, and have one speeding ticket on their record.

You can check out all the data right here.

Here are the average rates of those two insurers by gender in each state:

StateMale Monthly PremiumFemale Monthly Premium
District of Columbia$139.40$149.19
New Hamphsire$49.47$53.38
New Jersey$79.20$93.91
New Mexico$63.08$70.03
New York$54.40$61.33
North Carolina$56.02$56.02
North Dakota$46.73$47.29
Rhode Island$124.44$125.66
South Carolina$73.05$76.07
South Dakota$48.61$49.13
West Virginia$83.08$96.03

#3 – Your Age Is Calculated into the Average Rates

Statistics show that males between the ages of 16 and 29 are twice as likely to be involved in a fatal accident than females of the same age range. Because of the increased risk, males in that age group tend to pay higher premiums than females.

Regardless of sex, drivers aged 16-19 are three times more likely to be involved in a crash than drivers between 30 and 69 years old. Generally speaking, drivers in this age range will experience the lowest premiums.

When people are over 70 years old, their statistical risk of being involved in a fatal accident increases by about 50 percent compared to drivers between 30 and 69 years of age. Senior citizen drivers will probably see a reflection of this increased risk in increased premiums.

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 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.

Furthermore, if you own a home and place your homeowner’s 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 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 as follows:

  • Pay the entire premium at the time of accepting the policy
  • Make two installment payments with the first half being due immediately and the second half being due in three months
  • 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. Making the top of the list are:

  • The District of Columbia
  • Louisiana
  • Maryland
  • New Jersey
  • New York

Some of the least expensive states for car insurance include:

  • Arkansas
  • Illinois
  • Iowa
  • South Dakota
  • 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!

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