How much is car insurance? It’s a common question, especially as people experience higher annual premiums than they’re used to. Insurance professionals explain the increases as consequences of COVID-era supply chain issues, inflation, and increasingly volatile weather systems. Despite the reasonable explanations, it likely doesn’t make you or any other driver more receptive. Thankfully, regardless of current insurance projections, most insurance companies offer driver discounts to reduce the annual cost of insurance premiums.
In truth, the national average does not give you tremendous insight into the cost of car insurance for you and your vehicle. However, knowing it will help you identify the best deals in your area. So, let’s dive into average rates, costs by state, and how personal factors affect your costs.
Average Car Insurance Rates in 2025
Based on data collected from EverQuote users, the average cost of car insurance is $1,684. These users had a clean driving record, which typically reduces insurance costs. Another report explains that average annual auto insurance rates range from $716 for minimum coverage to $2,386 for full coverage.
Factors Influencing Car Insurance Rates
When determining how much insurance is for a car, there are several factors to consider. First, any accidents or traffic violations. Drivers with previous accidents may see higher insurance quotes, and the same is true for drivers with several speeding tickets or infractions.
Second, the insured vehicle significantly affects costs. A luxury or high-performance vehicle usually carries higher insurance premiums. The safety rating may also increase rates or qualify for lower premiums.
Third, location. Urban areas, such as busy metropolitan areas, usually have higher insurance costs because of their population density and the increased risk of accidents and theft. Rural areas, with lower populations and traffic, tend to have lower rates.
Finally, driver demographics and credit history play a role. Younger drivers pay higher premiums because of their inexperience. Many insurers today also use credit scores to determine financial risks and rates. On the bright side, car insurance discounts can help counter costs, especially from unavoidable factors like age.
Projected Rate Increase of 7%
While standard factors affect how much car insurance is per month, industry challenges and regulatory changes can affect your yearly premiums. According to several reports, auto insurance premiums will increase by 7% to 7.5% in 2025. Some experts suggest the average car insurance cost may surpass $2,000 for comprehensive coverages.
Breakdown of Car Insurance Costs by State
The price you pay for car insurance and how much that price deviates from the national average correlate with where you live. Population density, weather patterns, legal and regulatory environments, and crime rates vary from state to state — each factor affects insurance premiums. That said, several states continuously rank as the cheapest or most expensive states for car insurance. The states with the most affordable rates for full-coverage car insurance are:
- Hawaii
- Maine
- Ohio
- Vermont
- Wyoming
The states with the most expensive rates for full coverage include:
- California
- Colorado
- Florida
- Louisiana
- Washington D.C.
You’ll notice that states with higher average premiums are typically more populous or have a more significant tourism industry than states with lower premiums. While it’s easier to find cheap car insurance in certain states, individual rates — how much you pay for car insurance a month — usually vary based on several personal factors beyond location.
Rate Variations Based on Personal Factors
Car insurance quotes vary based on several personal factors, some of which we’ve touched on briefly. It’s important to understand that how much your car insurance costs is highly individualized.
Drivers with clean driving records, meaning no accidents or traffic violations, enjoy the lowest rates. Insurers consider these drivers low risk, meaning they are less likely to file claims against their policy. The more accidents and infractions drivers have on their records, the riskier they become, and the more expensive their insurance becomes.
Insurers may use credit scores to help determine driver risk profiles. A good credit score can indicate a more responsible individual, and greater responsibility may correspond with a lower risk profile and cheaper rates. However, using credit scores to determine insurance premiums risks discriminating against low-income drivers, which is why the practice is criticized.
How much your car insurance costs is also greatly influenced by your vehicle choice. A vehicle’s make, model, and age factor into insurance rates because they point to replacement costs, theft rates, safety features, and other risks.
Ultimately, insurance companies use personal details, driving records, credit scores, and vehicle information to assess the overall risk of a driver filing a claim. The higher the perceived risk, the higher the premium.
Strategies for Reducing Car Insurance Costs
Don’t let rising insurance costs and projections of future increases scare you. You cannot control market fluctuations. Instead of worrying about things outside your control, focus on the controllable factors influencing your insurance costs, like maintaining a clean driving record or taking advantage of auto insurance discounts (safe driver, low mileage, good student, etc.). Other ways to reduce your insurance premium include:
- Bundling policies (home and auto)
- Increasing your deductible
- Choosing a low-risk vehicle
- Improving your credit score
- Participation in group discounts
The best way to reduce your insurance costs is to shop around. You can and should get multiple insurance quotes to ensure you get the best deal possible based on your specific profile.
Get a Free Quote
So, how much is car insurance going to cost you? The answer depends on several factors. While the average cost of auto insurance is between $716 and $2,386, it may differ for you because of your age, location, vehicle, etc. The best way to determine cost is to comparison shop. Check out the free comparison tool from EverQuote to get real-time quotes from several of the top insurers in the industry.