Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Apr 20, 2022

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Key Takeaways

  • Auto insurance can cost an average of $79.58 per month across the United States
  • The cheapest rates are generally offered to middle-aged females who drive safe cars in states that aren’t densely populated
  • Decrease your monthly payment by snagging discounts, maintaining a clean driving record, and keeping your credit score above 700

The last thing you want to do is pay more than is necessary for car insurance, but what actually affects your rate? Your final quote depends on several factors, including your age, gender, location, vehicle, driving history, and other personal circumstances, so there’s a lot to consider when figuring out how to lower car insurance costs.

Luckily, you can do several things to keep extra money in your pocket without compromising your insurance coverage. Keep reading to see how average insurance rates range across the U.S. and learn a few money-saving tips you can use to reduce your monthly payments.

What is the average car insurance premium across the U.S.?

Before figuring out how to save on insurance, you should know what car insurance typically costs. On average, you could expect to pay $79.58 per month.

However, your actual rate depends on several important factors:

  • Your location
  • Your vehicle
  • Your age
  • Your gender
  • Your driving history

Average rates vary greatly from state to state, and they have different minimum car insurance requirements. The Department of Insurance in each state analyzes driving trends, congestion, tax rates, and cost of living to determine a base rate for auto insurance. Currently, car insurance rates by state range from $46.17 to $98.67 per month, with states such as Illinois and Arkansas having cheaper rates and New Jersey and New York setting higher rates.

The more expensive your car is, the more it generally costs to fix. This can increase your monthly rate. Luxury cars, sporty cars, and brand-new cars are typically more expensive to insure.

You can’t help how old you are, but your age group could affect your rate dramatically. Teens and people in their 20s are considered high-risk drivers because this age range is statistically involved in more accidents than older, more experienced drivers. A quote for a teenager, for example, could be as high as $216 per month while a driver in their 30s might pay less than half that rate.

Gender can also affect you differently depending on your age group. Males under 50 are considered riskier than females. That trend switches after 50, however. Overall, younger males who live in densely populated states are usually subjected to the highest rates.

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What are the different ways to lower your car insurance?

You can take an active role in lowering the cost of your car insurance.

First, simply drive safely and avoid accidents. A bad driving record can increase your rate significantly depending on the incident. For example, a speeding ticket could increase your monthly rate by $44.94, an at-fault accident by $81.21, and a DUI by $149.44.

If you don’t have the best record, you can still get car insurance deals through other ways. Check your credit score. Statistics show that those with good credit have fewer claims, so insurance companies can offer you cheaper rates if you maintain a credit score of 700 or above. The best ways to improve your credit are by paying your bills on time and keeping your credit utilization under 30%. Also, avoid opening and closing too many accounts at once.

If you have full car insurance coverage that includes comprehensive and collision, increasing your deductibles immediately lowers your monthly payment. Higher deductibles decrease the risk for the insurance company and tend to make customers drive more carefully since an accident could cost more out of pocket.

However, if you own your car, you could consider dropping elective coverages altogether to save money. Check the value of your car with Kelley’s Blue Book to see if it’s worth the risk.

If you’re in the market for a new car, limit your search to cars with great safety features, a low risk of accidents, or cheap production costs to find a car that isn’t so costly to insure.

What’s the best way to reduce your auto insurance rate by 20% or more?

If you want to know how to lower car insurance rates, focus on four important strategies:

  • Choose the right car.
  • Keep a clean driving record.
  • Maintain good credit.
  • Take advantage of discounts.

No matter how safe a driver you are, your car has a huge impact on your rate. If you find your car is expensive to insure, consider swapping it for something that’s either older or has highly rated safety features.

A clean record can lower your rate significantly so avoid speeding tickets, DUIs, or distracted driving to save up to 30% on your base rate. In addition, good credit scores may decrease rates by 30% or even 40%.

Always take advantage of discounts. Car insurance deals and discounts could save up to 40% on your rates depending on the insurer.

How do you get a discount on car insurance?

Wondering how to get cheaper car insurance through discounts? Sometimes, companies don’t make their discounts easily accessible, so we’ll list a few common ones to keep an eye out for:

  • Green discounts. If your car uses electricity to run, even partially, you could get up to a 10% discount. Those who elect paperless notifications could also get 10% off.
  • Good driver discounts. Those who remain accident-free may reap savings up to 35% or 45%. The discount may increase the longer you go without an accident or claim.
  • Low mileage discounts. The less you’re on the road, the less likely you are to have an accident. Companies may offer a 30% discount for short commutes.
  • Good student discounts. Many companies issue up to 25% discounts for current students with a GPA of 3.0 or higher.
  • Bundle discounts. As an incentive to bundle policies, you could save up to 25% for insuring your home or other vehicles with the same company.

Discounts are also possible for specific safety features such as backup cameras, anti-theft devices, and warning features for things like lane departure. Make sure you know all your car’s safety features so you can find applicable discounts.

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How do I know if the price for my auto insurance is right?

The cost depends on the company. If one company seems more expensive than another but has better customer reviews and quality customer service, you may save trouble down the line. Cheap doesn’t necessarily mean best, especially if you are a high-risk driver. If you want to find the right auto insurance for you, weigh all your options.

Some of the most popular insurance companies include:

  • Allstate
  • Esurance
  • GEICO
  • State Farm
  • Progressive

These companies also happen to offer some of the least expensive insurance rates and would be a great place to start your search for affordable car insurance.

Where can I discover how to lower car insurance rates?

We know how stressful it is to find the right insurance at an affordable price. You must factor in things beyond your control such as your age or location while working hard to ensure you have good credit, affordable deductibles, and a clean record. And now that you know the elements that can affect your rate, you should feel ready to begin your search.