Even experienced car buyers can sometimes overlook a crucial expense: car insurance. The cost of coverage can vary drastically between vehicles and insurance providers, potentially adding hundreds of dollars to your annual bill, even if your personal details remain consistent. That’s why using a car insurance estimator before you commit to a purchase is essential. This simple step helps you fully understand the true cost of ownership and avoid unpleasant surprises.
Understanding Car Insurance Costs
Calculating the total cost of owning a car goes beyond just the sticker price and fuel efficiency. Consider these factors:
- Acquiring Quotes: Start by getting insurance quotes for the cars you’re considering.
- Total Ownership Cost: Include insurance costs alongside fuel consumption and maintenance when estimating total ownership expenses.
Securing a low monthly payment on a car loan is advantageous, but it’s useless if your insurance premium doubles. According to NerdWallet’s March 2025 rate analysis, the national average cost of full coverage car insurance is $2,312 per year. Note that this is just an average; your specific rate will fluctuate based on the car you choose, your location, age, and other factors. “Full coverage” isn’t a specific policy type but a combination of various coverages. For the purposes of the rate analysis, it includes liability, comprehensive, collision, uninsured/underinsured motorist protection, and any state-mandated coverage.
How to Estimate Car Insurance Costs
Here’s how to get an accurate estimate:
- Narrow your choices: Research and select a few vehicle models.
- Assess your needs: Think about needed coverage. If you’re buying a new car, collision and comprehensive insurance will protect you. If you take out a car loan, your lender will most likely require this kind of coverage.
- Compare coverage: Get quotes for the same amount of coverage across your top vehicle choices.
It is critical to understand all the expenses before you finalize your decision.
Factors that Influence Car Insurance Costs
Several factors affect your auto insurance rates, including:
- Personal Characteristics: Age, gender, marital status: Teen drivers, for example, often face higher premiums than other age groups.
- Coverage Levels: The amount of coverage you purchase directly influences the cost. More coverage generally leads to higher premiums.
- Driving Record: Past DUIs, speeding tickets, or at-fault accidents can drive up your rates. If you have a recent violation, it pays to shop around.
- Location: Most states mandate a minimum insurance level, but these requirements vary. Your neighborhood’s crime rate and population density also affect your insurance costs.
- Credit Score: Drivers with poorer credit histories often face higher premiums. Insurers use credit-based insurance scores, which are different from regular credit scores, to determine the likelihood of filing a claim. California, Hawaii, and Massachusetts don’t allow insurers to consider credit history when determining auto insurance rates.
- Insurance History: This covers details such as insurance lapses, recent claims, time with your current insurer, and previous insurers.
Why Some Cars Cost More to Insure
Some vehicles simply cost more to insure due to higher repair or replacement costs. Insurers also use crash and theft data to set rates for specific models.
- Vehicle characteristics:
- Retail Price: More expensive cars tend to have higher insurance rates as insurers would be on the hook for their full market value.
- Cost of Parts: Expensive models tend to require costly components to repair, which adds to the cost.
- Safety: Vehicles well-designed to protect drivers often lead to lower premiums.
Frequently Asked Questions
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How can I get cheap car insurance?
To get the cheapest auto insurance, compare prices and get quotes from at least three providers. Rates differ from company to company, based on driver record, gender, age, and location.
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How much car insurance do I need?
It is recommended to get enough liability insurance to cover your net worth. Most states have liability minimums, but getting just the minimum would make you underinsured. If you’re at fault in a serious accident, you might owe out-of-pocket costs. For newer cars, we advise carrying collision and comprehensive coverage to cover damage. To learn more, refer to our article about determining your coverage needs.
Methodology
NerdWallet averaged rates based on public filings obtained by pricing analytics company Quadrant Information Services. The organization examined rates for 35-year-old men and women for all ZIP codes in all of the 50 states and Washington, D.C. The data did not include Liberty Mutual, due to a lack of publicly available information
Sample drivers had the following coverage limits:
- $100,000 bodily injury liability coverage per person.
- $300,000 bodily injury liability coverage per crash.
- $50,000 property damage liability coverage per crash.
- $100,000 uninsured motorist bodily injury coverage per person.
- $300,000 uninsured motorist bodily injury coverage per crash.
- Collision coverage with $1,000 deductible.
- Comprehensive coverage with $1,000 deductible.
In states where required, minimum additional coverages were added.
They used a 2021 Toyota Camry L in all cases and assumed 12,000 annual miles driven.
