Average Cost of Auto Insurance Per Month (2023)

Auto insurance is one of the big costs that comes with owning a car, but premiums vary depending on a variety of factors. If you’re wondering how your own rates compare, we’ve gathered the latest stats on the average auto insurance cost per month by age and state. We’ll also cover what affects your car insurance costs and the best ways to save on this budget category.

What’s the Average Auto Insurance Cost Per Month?

The average monthly cost of car insurance is $54 for minimum coverage ($645 per year) and $157 for full coverage ($1,880 per year). In addition to the coverage type, other factors that affect rates include the policyholder’s location, driving record, age, and in most states, their credit score.

Minimum vs. Full Coverage

Minimum coverage refers to auto insurance that satisfies the minimum requirements for that state. In most states, minimum coverage is liability-only car insurance that only pays for damages and injuries you cause in an accident, up to your policy’s limits.

Full coverage is a term used to describe a combination of car insurance coverages. It generally refers to liability, comprehensive, and collision coverage, but there’s technically no such thing as an official “full coverage” policy.

Average Auto Insurance Cost Per Month by State

The average price of car insurance per month ranges from under $25 to over $300 depending on the state and coverage type. Maine has the lowest average rates at $24 per month for minimum coverage and $69 per month for full coverage. Michigan is the most expensive state for car insurance at $111 for minimum coverage and $302 for full coverage.

Here’s the average monthly auto insurance cost by state:

Average Auto Insurance Cost Per Month by Driving Record

Drivers with an at-fault accident on their record have a car insurance price per month about 50% higher than drivers with a clean record. Rates go up even more — generally by about 80% to 105% — after driving under the influence (DUI). Here’s the average car insurance payment per month in each situation:

Your driving record is important to insurers because it’s a way of gauging how safe a driver you are. If you’ve had accidents or tickets, especially any serious violations like reckless driving or DUI, those are red flags for insurers.

Average Auto Insurance Cost Per Month by Age

Here are the average car insurance rates by age per month, according to ValuePenguin:

Young drivers, particularly teenagers, pay the highest car insurance rates because they’re at a much greater risk of getting into accidents. Drivers between the ages of 16 and 19 have a fatal crash rate almost three times higher than drivers 20 and older, according to the CDC.

Car insurance rates decrease with age because as drivers gain experience they’re less likely to engage in risky behavior, such as speeding or distracted driving. Average rates are at their lowest for drivers in their 50s. They increase for drivers in their 60s and beyond due to the effects of aging, including slower reflexes and possible health conditions that can increase accident risk.

Average Auto Insurance Cost Per Month by Credit Score

Car insurance rates are about 60% higher for drivers with poor credit. Here’s the average car insurance payment per month for drivers with good credit and poor credit:

In most of the United States, car insurance companies can use a driver’s credit history when setting rates. The only states that don’t allow this are California, Hawaii, Massachusetts, and Michigan.

Although it may seem like credit scores shouldn’t have anything to do with insurance rates, drivers with poor credit are a greater risk for insurers. Lower credit scores are linked to a higher number of insurance claims (and costlier claims), according to data from the Federal Trade Commission (FTC).

Other Factors That Affect Average Car Insurance Costs

There are several other factors that affect your car insurance price per month. These include:

• Miles driven: The more you drive, the higher your risk of getting in an accident. Insurance companies ask how many miles you drive per year and use this to set your premiums. Most also offer low-mileage discounts for drivers who stay below a set number of miles, with the normal threshold ranging from 6,000 to 10,000 miles per year.

• City size: Drivers in large cities present a greater risk to insurers, for a few reasons. There’s more traffic - increasing the odds of an accident - and large cities also tend to have higher theft and vandalism rates. Drivers in smaller cities and rural areas pay a lower average monthly car insurance bill.

• Overnight parking: While it’s not the biggest factor in your car insurance price per month, parking is something insurers take into consideration. If you have a garage, your premiums will be a bit lower compared to if you park on the street.

How to Save on Car Insurance Premiums

It’s possible to cut your car insurance costs by following a few simple tips. Here are the best ways to save money on car insurance premiums:

• Shop around regularly. There are plenty of online tools that will let you compare rates from various insurance companies. Go rate shopping every year before renewing your car insurance to see if there’s a better deal available.

• Practice defensive driving. If you avoid accidents and tickets, you’ll pay less for car insurance.

• Check for discount opportunities. Most auto insurance companies offer discounts. For example, you may be able to save by bundling auto and homeowners insurance, taking a defensive driving course, or installing an antitheft device in your car.

• Pay annually (if it works with your budget). Many carriers provide a discount, generally of about 5% to 10%, if you pay a full year of premiums up front instead of paying monthly.

• Build and maintain a high credit score. Paying your bills on time and spending less on your credit cards can help you access cheaper car insurance in most states. This is just one of the many benefits of maintaining a high credit score.

Getting the Best Deal on Car Insurance

Having enough car insurance is a must. It protects you in case of an accident, and it’s legally required in most states. However, it’s important not to overpay. Now that you know the average car insurance bill per month, you can see how yours compares, and use those tips to potentially lower your premiums. And with Monarch Money, you can keep better track of those premiums as you see how they fit into your budget.