10 Cheapest US States to Buy Auto Insurance

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When it comes to auto insurance rates, where you live matters.

The difference between the highest and lowest average annual premiums in the US is $2,120, according to a recent Bankrate study that ranks states by the "true cost" of auto insurance.

The study's true cost ranking is derived from the average total percentage of revenue spent on auto insurance, based on the median income in each state, not just the average amount spent on premiums. Since median income varies by tens of thousands of dollars between states, the ranking is intended to better reflect the burden on drivers' overall budgets.

Using this metric, the average cost of auto insurance in the United States is 2.57% of an American driver's annual income, with an average annual premium of $1,771 per year.

Below, check out the 10 cheapest states for annual auto insurance rates, with rankings based on their "true cost."

10. Wisconsin

  • Average percentage of income spent: 1.87%
  • Average annual cost: $1,249

9. Utah

  • Average percentage of income spent: 1.85%
  • Average annual cost: $1,449

8. Idaho

  • Average percentage of income spent: 1.68%
  • Average annual cost $1,065

7. Washington

  • Average percentage of income spent: 1.60%
  • Average annual cost: $1,313

6. Vermont

  • Average percentage of income spent: 1.48%
  • Average annual cost: $1,000

5. New Hampshire

  • Average percentage of income spent: 1.47%
  • Average annual cost: $1,182

4. Virginia

  • Average percentage of income spent: 1.46%
  • Average annual cost: $1,340

3. Massachusetts

  • Average percentage of income spent: 1.45%
  • Average annual cost: $1,296

2. Maine

  • Average percentage of income spent: 1.44%
  • Average annual cost: $876

1. Hawaii

  • Average percentage of income spent: 1.41%
  • Average annual cost: $1,206
The rating also reflects the many factors that contribute to auto insurance rates in each state, including your age, the car you drive, your driving record, your credit score (in most states), the length of your travel and even local weather conditions.

Drivers in Louisiana and Florida spend the majority of their income on auto insurance: 5.26% and 4.42%, respectively. These rates are comparatively higher as these states have relatively low median incomes compared to other states. Weather could also be a factor, as hurricanes and flooding are common in both states, says Lizzie Nealon, an author of the report.

Other factors are also at play, to varying degrees.

On average, American drivers with excellent credit scores pay almost $1,500 less compared to those with poor scores, according to data from Bankrate, but that can vary by state. In California, Hawaii, and Massachusetts, insurers cannot use credit scores to determine their rates.

Poor driving also has a far-reaching impact. Drivers who cause a car accident pay an average annual premium of $2,521 in the US, but that can be much higher depending on where you live. In New York, for example, the average annual fee is $3,239 for drivers who have caused accidents.

What you can do to keep rates low

“If you're a driver in Louisiana, you live there, you probably work there; it would be quite difficult to uproot and move to Hawaii, where it's cheaper,” says Sarah Foster, an analyst at Bankrate. that she worked in the studio.

Since some of the cost is out of your control, the best way to keep rates low is to maintain good driving habits and keep your credit score as high as possible, especially in most states where it is used to determine the rate. of your car insurance. Foster says.

It's also worth considering a new policy from time to time. Drivers often forget to periodically check for new rates, especially if their credit score has improved, says Foster. But insurance companies aren't necessarily going to adjust their rates before the renewal date, so it's up to drivers to stay on top of their own policy.

"Even if there's no credit score change at all, it's always a good idea to shop around and make sure you're not paying more for insurance than you could get for hundreds of dollars less elsewhere," says Foster. "No one likes to overpay when inflation is at its highest point in 40 years."

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