How much does car insurance cost in 2023?
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Updated 8:16 a.m. ET July 12, 2023
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Key points
- Drivers with a clean record will pay an average of $2,067 a year ($172 a month) for full coverage auto insurance.
- USAA, Auto-Owners and Geico have the lowest average car insurance prices; drivers spend the most on insurance from Allstate and Mercury.
- Drivers can expect lower car insurance prices if they have a clean record, are between the ages of 30 and 70, drive a Subaru or live in Idaho, Vermont or Ohio.
The average annual cost of car insurance is $2,067 for a fully insured driver with a clean record. That’s $172 a month that responsible drivers must set aside for full coverage — on top of other driving costs like car payments, fuel, maintenance and repairs.
Car insurance prices can vary considerably depending on which state you live in, your driving record, your age and gender, the vehicle you drive and the car insurance provider you select.
You can reduce your car insurance costs by opting for the state-required minimum car insurance, but then you will have limited coverage.
We’ll analyze how these factors can affect the average cost of car insurance and offer tips to reduce your monthly insurance premium.
How much is car insurance?
The average cost of car insurance is $2,067, or $173 a month, based on our analysis of a fully insured driver with a good driving record.
This represents a sharp increase over average car insurance prices even a year ago. The Consumer Price Index (CPI) reported a 7.7% year-over-year increase in car insurance premiums at the end of October 2022.
And those prices aren’t expected to drop in 2023. The American Property Casualty Insurance Association, a national trade association for home, auto and business insurers, reported that car insurance companies will likely continue to raise insurance premiums this year.
Why? Inflation and supply chain shortages have led to higher claim costs when a vehicle is damaged. Such claims have been outpacing insurance rate increases, so companies are looking to make up ground.
Average cost of car insurance by state
Several factors impact how much you’ll pay for car insurance, including your location:
- Individual states set their own minimum requirements for car insurance policies, which can impact your final cost.
- Cost of living varies dramatically across the country, which can increase or decrease local insurance costs compared to the national average.
- Some states are more densely populated or have a higher number of accidents, which can yield higher insurance premiums.
Did you know: Where you live in a state or even in a city can affect how much you pay for car insurance. ZIP codes with more reported collisions and break-ins may yield higher insurance prices.
Annual car insurance costs by state
5 states with the most expensive car insurance
Car insurance costs are significantly higher for drivers in these five states:
- New York
- Full coverage: $4,769.
- Minimum coverage: $1,016.
- Florida
- Full coverage: $4,326.
- Minimum coverage: $1,286.
- Louisiana
- Full coverage: $3,629.
- Minimum coverage: $930.
- Pennsylvania
- Full coverage: $3,600.
- Minimum coverage: $506.
- Maryland
- Full coverage: $3,349.
- Minimum coverage: $855.
Carrying car insurance in New York is expensive. We’ve found that drivers with a clean record can get the lowest annual premium on full coverage by going with NYCM Insurance as their provider. The average annual cost for New York drivers carrying full coverage with NYCM is $2,986.
5 states with the least expensive car insurance
States like New York and Florida may command high annual premiums, but where can you find the lowest car insurance prices?
- Idaho
- Full coverage: $1,021.
- Minimum coverage: $341.
- Vermont
- Full coverage: $1,037.
- Minimum coverage: $278.
- Ohio
- Full coverage: $1,112.
- Minimum coverage: $345.
- Maine
- Full coverage: $1,216.
- Minimum coverage: $396.
- Iowa
- Full coverage: $1,238.
- Minimum coverage: $275.
Idaho has the cheapest average car insurance prices for full coverage. In fact, the average cost of full coverage car insurance in Idaho ($1,021) is more affordable than minimum coverage in Florida ($1,286).
We’ve found the most affordable policies in Idaho come from American National, where the average annual cost of full coverage insurance is just $422 for safe drivers.
Which states don’t require car insurance?
All but two states require drivers to carry car insurance:
- New Hampshire: In New Hampshire, drivers don’t have to carry car insurance. If they opt out of coverage, they must be able to demonstrate that they can meet the state’s financial responsibility requirements should they cause an accident. Drivers who do not carry auto insurance and fail to meet these requirements risk losing their license and registration — on top of potentially needing to cover high hospital and vehicle repair bills.
- Virginia: Virginia technically requires car insurance, but the state allows drivers to opt out — for a fee. Drivers who pay a $500 uninsured motorist fee every year can decline car insurance, but the fee doesn’t offer any coverage. Virginians without insurance are still on the hook for injuries and damage they cause. In Virginia, the average cost of minimum coverage is $584, just $84 more than the annual fee that offers no protections.
Average cost of car insurance by company
Annual car insurance premiums vary significantly by insurance provider. We’ve found that USAA offers the lowest insurance premiums, though USAA restricts membership to active and retired members of the military (including honorably discharged veterans) and their eligible family members.
Of those car insurance providers without strict eligibility requirements, the cheapest are Auto-Owners and Geico. The most expensive are Mercury and Allstate.
Read more: Best car insurance companies of 2023
Auto insurance costs by insurance provider
Price is an important factor, but there’s more to consider when choosing a policy, said Julia Matseikovich, CEO and co-founder of AgileRates.
“It depends on what you want from your insurance company. If you want reliable insurance with good customer service and a smooth claims process, then find a company you like and stick with it,” said Matseikovich. “If your goal is to always have the lowest possible premiums, shop around every time your policy is up for renewal.”
Average cost of car insurance by driving record
Drivers with clean records — no accidents or tickets in recent years — can earn cheaper rates on their car insurance. Some companies may even discount your insurance over time as a reward for continued safe driving.
On the flip side, drivers with accidents, tickets, DUIs and even poor credit scores can expect higher insurance costs.
Remember that a driver with a clean record will pay $2,067 a year on car insurance. Let’s break down what drivers can expect to pay for full coverage car insurance if their records aren’t perfect.
Read more: Car insurance after DUI in 2023
Driving record impact on car insurance costs
Drivers with a DUI can expect to pay 70% more for car insurance than drivers with a clean record, but surprisingly, a poor credit score — which is not directly related to one’s driving record — has an even greater impact, with costs increasing by 79%.
Average cost of car insurance by vehicle
The type of vehicle you drive, including the make, model and even fuel source, can impact your overall insurance cost each month. Let’s break it down.
How vehicle type affects car insurance prices
The cheapest type of vehicle to insure is a minivan, with full-size vans not far behind. Sporty vehicles like convertibles and coupes are unsurprisingly among the most expensive vehicle types to insure, but wagon insurance prices are also high.
Average car insurance cost by type of vehicle
How fuel type affects car insurance prices
Vehicles that are gas-powered are slightly more expensive to insure than their electric counterparts, though hybrids — at $2,802 a year for full coverage — are the most expensive of all.
Average car insurance cost by fuel type
Did you know: While electric vehicles continue to be expensive, the U.S. has extended its federal tax credit incentive for new EV purchases and has instituted an additional tax credit for used EV purchases starting this year.
How car model affects car insurance prices
The make and model of the vehicle you drive can have a substantial impact on the average cost of car insurance.
For example, the luxurious 2022 Audi R8 Performance pulls in the highest annual insurance cost ($6,552) while policies for the 2022 Subaru Forester, the cheapest model to insure, are nearly 4 times more affordable ($1,704). In fact, the three cheapest vehicles to insure from the 2022 model lineup are all Subarus.
Subaru models may be impressively cheap to insure, but what about the vehicles that consumers most commonly purchase? Here’s how the 10 most popular car models in the U.S. stack up, ordered from lowest to highest cost to insure.
Average car insurance costs for the top 10 top-selling vehicles
Average cost of car insurance by gender and age
In most states, car insurance providers use data about your gender to inform car insurance price decisions. California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania are exceptions.
The big takeaway? Female drivers almost always get lower car insurance rates — and it makes sense. Analyzing data from the U.S. Department of Transportation, the Insurance Institute for Highway Safety found that men not only drive more miles than women, but they’re also more likely to speed, drive under the influence of alcohol, drive without wearing a seat belt and, as a result, die in motor vehicle crashes.
Age is also a major factor in determining insurance rates, and the two data points go hand-in-hand. For example, an 18-year-old male driver can expect an average insurance rate of $6,640 compared to an 18-year-old female driver, who would pay $5,657.
Both are tremendously high when you look at what they might pay when they’re 25, just seven years later:
- A 25-year-old male driver pays an average of $2,537.
- A 25-year-old female driver pays an average of $2,385.
In rare cases, male drivers do get lower car insurance rates.
Also noteworthy: While a greater age generally yields lower rates, that changes when drivers reach their 80s, when coverage costs begin to go up for senior drivers.
The table below breaks down average insurance costs for both males and females at different ages:
Cost of car insurance by age and gender
How to save money on car insurance
The average cost of car insurance per month is now $179, which can take a chunk out of your monthly budget. So how can you get a lower rate on car insurance?
Shop around (but remember that loyalty matters)
Car insurance policies usually last six months. As you near the end of a policy, it can be a good idea to compile quotes from different insurers to see if you can get a better deal. Car insurance comparison sites can do the work for you, but independent (human!) agents are also able to investigate options for you, and give you actual advice about the coverages and limits for you.
A couple of caveats to comparison shopping:
- Insurance hopping — that is, signing up for new policies every year or even every couple of years — may keep you from earning loyalty or safe driving discounts offered by your current insurer after a set period of time.
- Price is an important consideration, but it shouldn’t be your only consideration. Think about the ease of the claims process, the quality of customer service, and any discounts you might have for bundling other insurance products. These and other factors should also hold some weight in your final decision.
And remember: If you’re shopping for lower rates, make sure you’re comparing policies with the same level of coverage. That means the same deductibles and coverage limits. Otherwise, it’s not a true apples-to-apples comparison, and a lower price can be misleading.
Tip: If you find a comparable policy at a lower rate, run it by your current insurer. To keep your business, they may match the lower premium.
Raise your deductible
Car insurance rates have an inverse relationship with deductibles. The higher your deductible, the lower your monthly cost. If you have enough cash stashed away in emergency savings to cover a higher deductible, you could shave a lot of cash off your monthly rate.
“The first place I look to create savings is usually in the deductibles in each policy,” explained Brian Carden, an independent insurance agent and author of “Castles & Moats: Insurance, Investment and Life Planning Simply Explained.” He said, “Too many people carry very low deductibles on their auto policies.”
Carden simulated two quotes for me to demonstrate. Even though one of the policies offered significantly higher coverage limits than the other, he was able to get a significantly lower quote on that policy by bumping the deductible up from $100 to $500 (comprehensive) and $250 to $1,000 (collision).
Take advantage of car insurance discounts
It’s possible you qualify for several discounts with your current insurance provider that you’re not taking advantage of. If you like your current policy but want to lower the price, talk to an agent or customer service representative about all the discounts they offer and see if you qualify for any.
Try a new kind of policy
Usage-based car insurance policies can result in a lower rate if you’re a good driver. Your insurance provider will monitor your driving habits, like braking, acceleration, miles driven and the typical time of day that you drive. Good driving habits can yield serious discounts on your insurance.
Another policy that’s growing in popularity is pay-per-mile auto insurance. These policies are great for drivers who rarely get behind the wheel but still need insurance for when they do drive.
While not as widely available as traditional car insurance policies, pay-per-mile is gaining steam. Even major insurers like Nationwide and Allstate offer it in select states (called Nationwide SmartMiles and Allstate Milewise, respectively).
Full vs. Minimum coverage
We based our average annual car insurance cost — $2,067 — on a good driver with full coverage auto insurance. But what does full coverage mean, and does it ever make sense to go with the state-required minimum coverage?
Full coverage auto insurance
Though coverage details can vary state to state and company to company, a full coverage auto insurance policy typically means carrying everything your state requires plus comprehensive and collision insurance. It might also include additional optional coverages.
Here’s what full coverage auto insurance may look like:
- Liability coverage: Typically required by states, this insurance covers the cost of injuries to other people (bodily injury liability) and damage to other people’s property (property damage liability) when you’re at fault for an accident. It will also cover your legal defense (and settlements) if you’re sued. Liability coverage does not cover your own car or injuries; you’ll need full coverage for personal protection.
- Collision coverage: This optional insurance covers damage to your own vehicle, even if you’re at fault.
- Comprehensive coverage: Also optional, this insurance covers damage to your vehicle not from collisions, e.g., fire, theft, animal damage or flooding.
- Uninsured/underinsured motorist coverage: Another optional coverage, this insurance takes care of your and your passengers’ medical bills if you are injured during an accident with an at-fault, uninsured (or underinsured) driver. This insurance comes in handy if you’re the victim of a hit-and-run.
- Medical coverages: MedPay (medical payments coverage) handles any medical attention for you and your passengers, even if you were at fault. Personal protection coverage (PIP) is another medical coverage, sometimes required by your state, which can help you out with things like lost wages if you can’t work after an accident.
In addition to these coverages, you may opt in for insurance options such as:
- Gap insurance.
- Rental reimbursement.
- Roadside assistance.
If you’re financing or leasing a car, the lender may require that you carry optional coverages, especially collision and comprehensive.
Minimum coverage auto insurance
A year of full coverage car insurance is expensive ($2,067) while minimum coverage is only $513 a year on average. So should cash-strapped drivers go with minimum coverage?
Carrying the state-required minimum coverage can keep you from getting in legal trouble and may be enough to pay the bills for injuries and property damage you may cause. But sometimes, minimum coverage is insufficient if you cause an expensive accident.
Paul Moss, founder and CEO of Hey Driver, explains, “In the event that you were to cause an accident, the personal injury attorney of the other driver will assess your policy. If they see that your insurance policy has lower limits or insufficient coverage, they will come after your assets; this can include your wages, your Social Security checks, the value of your home and the cars you drive.”
Not to mention, minimum coverage insurance does nothing to cover your own expenses if your vehicle is damaged or you are injured in an accident.
Annual cost of owning a car
Insurance coverage is a major factor when calculating the cost of vehicle ownership — one of many to keep in mind when shopping for a new car. With ongoing supply chain issues and rampant inflation, the cost of owning a car has gone up dramatically in recent years.
AAA reports that car ownership costs have reached a new milestone: more than $10,000 a year. In addition to the price of car insurance, drivers should factor in costs like:
- Monthly car payments (for financed or leased vehicles): Experian reports that the average monthly car payment is $567 for leased vehicles and $700 for financed vehicles; that’s $6,804 and $8,400 a year, respectively.
- Annual registration: Rates vary by state. Most states charge a flat rate, but some states price registration based on the vehicle’s weight, value or age.
- Routine maintenance and unexpected repairs: Oil changes and tire rotations might not be a major drain on your finances, but unexpected repairs, if not covered by a warranty, can add up, especially if you opt for high-deductible insurance.
- Fuel prices: At the peak of last year’s record gas prices, Yardeni Research reported that Americans were spending an average of $417 a month on gas. Gas prices are easing, but can remain unpredictable as the geopolitical climate continues to waver.
The average cost of car insurance per month is $172 for a good driver with a clean record; that’s $2,067 a year. Car insurance rates can vary depending on your age, gender, vehicle, location and driving record.
Most states have a required minimum coverage amount for auto insurance. For drivers living paycheck to paycheck, minimum coverage may be the only option. If you’re financing or leasing a vehicle, however, the lender may require collision and comprehensive coverage.
If you can afford full coverage, you should carry it, regardless of legal requirements. Carrying full coverage gives you significantly more protection on the road. Without it, you may find yourself paying for property damage or hospital bills — and your assets are fair game if you can’t foot the bill.
Some experts recommend shopping for new car insurance every time your policy is up for renewal, i.e., every six months. For others, that’s too frequent — every one to three years will do.
Keep in mind that you may be eligible for discounts the longer you stay with an insurance provider, but you may also be missing out on lower rates with another provider.
Online comparison tools and independent human insurance agents may be able to help you determine if you can find the same level and quality of coverage at a lower price point.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
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