95 percent of American households own at least one car, and although we’re probably not driving nearly as much as we once did, it’s still something we need to insure and maintain. Owning a car comes with great freedom and flexibility, and offers great convenience in our modern life. Running errands around town is much easier, and the joy that comes with going on a long road trip is awesome. However, car ownership isn’t all rosy. Running the car costs money, and one of the major costs is auto insurance.

A good thing to compare from time to time and understand is the question – how much does/should car insurance cost? Nothing is worse than learning you’re overpaying for a service, and with so many options and commercials out there advertising “low rates”, it can be tough sometime to ensure you’re getting the best deal (which isn’t always the lowest price).

What Is the Average Car Insurance Monthly Insurance Cost?

Depending on who you ask or where you go to for information, you will learn that the average car insurance monthly cost ranges from $1,400 to $1,600 per year. This brings the monthly average to between $116 and $133. However, this is simply an average, and you may very well be paying a lot more or a lot less!

There are a number of factors that can and will affect your insurance premium; some of which you can control and other things you can’t! Let’s dive in and explore some of the factors that affect your auto insurance premiums.

What Affects My Monthly Auto Insurance Premiums?

Your State (Where You Live)

You’re probably wondering why anyone would take into account where you live when calculating your auto insurance quote. Well, have you heard that some states have a higher rate of road crashes than others? If you live in a state where there’s a number of road crashes that’s higher than the national average, you’re going to pay more for auto insurance.

Sure, living in such a state doesn’t necessarily mean you’ll get into an accident at least once every year. In fact, you might never get into an accident throughout your lifetime. However, it does mean your risk of getting into a vehicular accident is higher. And insurance is all about evaluating and managing risk.

Personal Details (Age, Gender, Marital Status)

Young, male, and unmarried. Can you name any combination that results in a person who is more risk-loving? Probably not! I will call out that I’ve been in two accidents and both occurred when I was young and single, I hate being a statistic but is what it is! Generally, your age, gender, and marital status will come into play when an insurance company is calculating your auto insurance premiums. Here’s there reasoning.

Young drivers are more likely to get into a car accident, largely because of inadequate driving experience, but also because they love taking risks, such as speeding. Statistically, female drivers get into fewer car accidents than their male counterparts. Also, married folks don’t get into as many accidents as unmarried people. No one will question you if you argued that married people are less likely to drive dangerously because they’ve got a family that depends on them.

While it might seem unfair that insurance underwriters are using things that are out of your control to determine your insurance rate, their reasoning is typically backed by research.

The good news is as you grow older, these factors will become less important. Just maintain a stellar driving record and you’ll have greater negotiation power when you’re renewing your car insurance.

What Car Are You Driving?

Do you expect a person driving a regular car like a 2020 Toyota Camry to pay the same amount as someone who drives a luxury SUV, like a 2020 Audi Q7? Of course, there’ll be a big difference in the auto insurance quotes of these two car owners.

This implies that the car you drive has a major impact on the cost of insurance. And it’s not just the make of the car, the car’s age and safety rating matter, too.

An older car would be more expensive to insure than a newer car. Older cars have older driving technology and are, as such, more likely to cause accidents. Most newer cars are improved versions of their older makes, which means they pack newer, more-effective safety technologies. However, an older car has a lower replacement value if you were in a wreck, whereas insuring a brand new car would be pricer.

The National Highway and Transport Safety Administration (NHTSA) has a safety rating program, which awards a rating to every consumer car. Vehicles with great safety ratings (5 stars) will attract lower insurance rates as compared to cars with a poor safety rating.

If you’re currently in the market for a car, you have greater control of what you’ll eventually pay for car insurance. If you’re on a tight budget and don’t want to spend a lot of money running a car, be sure to purchase one that has a great safety rating. Also, avoid pricier, luxury cars.

Your Driving Activity

How often and where will you be driving your car? If insurance adjusters establish that you’ll be using your car heavily, maybe you’re a real estate agent who cruises across the state every day, expect the pay more. But if you won’t be using the car as much as the average driver, you can certainly negotiate a lower rate. We’ve seen many insurance companies giving back to consumers via discounts or rebates – less people driving during COVID-19 means fewer accidents!

There are also other factors, such as where you’ll be storing the car when not in use and whether it has anti-theft features, that will affect your rate.

You Can Lower Your Car Insurance Monthly Cost

After spending a ton of money on buying a car, the last thing you want is to spend a ton more on insuring it. With this guide, you now know what the average car insurance monthly cost is, as well as the factors that will influence your rate. You are also in a better position to take steps that can help lower your cost.

Shop around

Although it’s not feasible to always be switching and changing insurance companies whenever you can find a better deal, it’s wise to compare rates annually or once every few years. Service will also play a big role in your experience – one claim in which you get bad service will make you think twice about that insurance company. It’s super easy to compare rates online (and ugh an insurance car jingle just popped into my head), and something you should consider!

Disclosure: Some links are affiliate links that earn me a commission.