Find Out What’s Really Driving Up Your Car Insurance Prices

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Average auto insurance costs went up by 22% in 2024, and 23% in 2023. No, that’s not a typo: Americans have endured two years in a row of 20% (or more) increases in their auto insurance premiums. Where will this end? Many people might feel like auto insurance costs will just keep skyrocketing forever, for reasons beyond their control.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
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Click here to read our full review for free and apply in just 2 minutes. The fact is, auto insurance rates go up for lots of complex nationwide reasons — the overall higher price of cars, the rising cost of car repairs, more frequent car crashes, and more severe natural disasters like hurricanes and wildfires that destroy vehicles. All of these problems cause higher losses for car insurance companies.Some people’s auto insurance also gets more expensive because of speeding tickets or accident history. But auto insurance rates also go up for a few other surprisingly personal reasons — which are mostly beyond any drivers’ control.Before we dig into the details — anyone who wants to cut to the chase and find cheaper car insurance can start right now. Click here to learn more about the best cheap car insurance companies — and see how these award-winning auto insurers can help drivers save money.Now let’s look at why auto insurance rates keep going up — and how drivers can take matters into their own hands to try to get cheaper car insurance in 2025.1. Driver’s credit scoreMany drivers might not realize this, but even for people who have a clean driving record, having problems on your credit history can drive up the cost of car insurance. Car insurance for drivers with poor credit costs more than twice as much, on average, as car insurance for people with excellent credit.Here’s data on average monthly car insurance costs from 2023, based on Motley Fool Money research:Average cost for drivers with good credit: $162Average cost for drivers with poor credit: $345Poor credit can cost drivers an extra 53% on auto insurance. People who have had previous financial trouble can expect to be treated as higher-risk borrowers by banks. Unfortunately, poor credit also causes drivers to be treated as higher-risk customers by auto insurance companies.2. Driver’s ageAnother big reason why car insurance is expensive is the age of the driver. Young people are less experienced behind the wheel. They sometimes are still learning to avoid risky situations, control their impulses, put down their phones, and tamp down their road rage. For all these reasons, younger drivers are rated by auto insurance companies as higher risk than older drivers.Research from 2023 found these national average car insurance rates for drivers at different ages:Age 18: $5,988 per yearAge 35: $2,195 per yearAge 65: $1,979 per yearThe cost of car insurance for teen drivers can be a massive expense. Consider how little an 18-year-old might earn at their part-time job, and it might not be worth buying a car for a teenager if the car insurance alone costs almost $500 per month. Fewer teenagers nowadays are getting driver’s licenses, compared to previous generations. Maybe the high cost of teen car insurance is part of the reason why.3. Driver’s sexMen tend to get into more severe and fatal car crashes than women. Research from the Insurance Institute for Highway Safety found that, from 1975 to 2019, men died in car crashes twice as often as women, and as of 2019, 71% of all car crash deaths were men.But even if men are more likely to die in car crashes, there seems to be a better balance of the total frequency and costliness of car crashes involving men and women as drivers. Gender equality is not yet a reality when looking at the wage gap in the workplace, but it’s getting closer in the world of auto insurance. Men pay slightly higher auto insurance rates than women, but only about $2.16 more per month, on average.4. Driver’s state of residenceEven drivers with great credit scores, a clean driving history, and a “safe” age might still get hit by high insurance costs just for living in the wrong state. The cost of car insurance fluctuates wildly from one state to another.The highest-cost state for car insurance in 2023 was Michigan, with an average annual car insurance premium of $5,766. That’s almost twice the national average of $3,017, and much more expensive than Michigan’s neighboring states of Wisconsin ($2,346), Ohio ($2,238) and Indiana ($2,065).Why does car insurance cost so much more in different states? Each state has its own little car insurance market, with its own state-level laws and policies that affect insurance prices. Some states make it harder for drivers to buy affordable minimum liability-only insurance policies. Different states might have higher accident rates, higher incidence of natural disasters, and higher costs of lawsuits.Is it ever worth moving to another state because the car insurance costs are too high? For most people, probably not. But if present trends continue, some people in states like Michigan might start to feel like their car insurance costs almost as much as their monthly housing payment.Bottom linePeople who are feeling burned out on car insurance costs should take matters into their own hands and shop around for price quotes. The best car insurance companies might offer a better deal compared to the driver’s current insurance policy.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

Average auto insurance costs went up by 22% in 2024, and 23% in 2023. No, that’s not a typo: Americans have endured two years in a row of 20% (or more) increases in their auto insurance premiums. Where will this end? Many people might feel like auto insurance costs will just keep skyrocketing forever, for reasons beyond their control.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

The fact is, auto insurance rates go up for lots of complex nationwide reasons — the overall higher price of cars, the rising cost of car repairs, more frequent car crashes, and more severe natural disasters like hurricanes and wildfires that destroy vehicles. All of these problems cause higher losses for car insurance companies.

Some people’s auto insurance also gets more expensive because of speeding tickets or accident history. But auto insurance rates also go up for a few other surprisingly personal reasons — which are mostly beyond any drivers’ control.

Before we dig into the details — anyone who wants to cut to the chase and find cheaper car insurance can start right now. Click here to learn more about the best cheap car insurance companies — and see how these award-winning auto insurers can help drivers save money.

Now let’s look at why auto insurance rates keep going up — and how drivers can take matters into their own hands to try to get cheaper car insurance in 2025.

1. Driver’s credit score

Many drivers might not realize this, but even for people who have a clean driving record, having problems on your credit history can drive up the cost of car insurance. Car insurance for drivers with poor credit costs more than twice as much, on average, as car insurance for people with excellent credit.

Here’s data on average monthly car insurance costs from 2023, based on Motley Fool Money research:

• Average cost for drivers with good credit: $162
• Average cost for drivers with poor credit: $345

Poor credit can cost drivers an extra 53% on auto insurance. People who have had previous financial trouble can expect to be treated as higher-risk borrowers by banks. Unfortunately, poor credit also causes drivers to be treated as higher-risk customers by auto insurance companies.

2. Driver’s age

Another big reason why car insurance is expensive is the age of the driver. Young people are less experienced behind the wheel. They sometimes are still learning to avoid risky situations, control their impulses, put down their phones, and tamp down their road rage. For all these reasons, younger drivers are rated by auto insurance companies as higher risk than older drivers.

Research from 2023 found these national average car insurance rates for drivers at different ages:

• Age 18: $5,988 per year
• Age 35: $2,195 per year
• Age 65: $1,979 per year

The cost of car insurance for teen drivers can be a massive expense. Consider how little an 18-year-old might earn at their part-time job, and it might not be worth buying a car for a teenager if the car insurance alone costs almost $500 per month. Fewer teenagers nowadays are getting driver’s licenses, compared to previous generations. Maybe the high cost of teen car insurance is part of the reason why.

3. Driver’s sex

Men tend to get into more severe and fatal car crashes than women. Research from the Insurance Institute for Highway Safety found that, from 1975 to 2019, men died in car crashes twice as often as women, and as of 2019, 71% of all car crash deaths were men.

But even if men are more likely to die in car crashes, there seems to be a better balance of the total frequency and costliness of car crashes involving men and women as drivers. Gender equality is not yet a reality when looking at the wage gap in the workplace, but it’s getting closer in the world of auto insurance. Men pay slightly higher auto insurance rates than women, but only about $2.16 more per month, on average.

4. Driver’s state of residence

Even drivers with great credit scores, a clean driving history, and a “safe” age might still get hit by high insurance costs just for living in the wrong state. The cost of car insurance fluctuates wildly from one state to another.

The highest-cost state for car insurance in 2023 was Michigan, with an average annual car insurance premium of $5,766. That’s almost twice the national average of $3,017, and much more expensive than Michigan’s neighboring states of Wisconsin ($2,346), Ohio ($2,238) and Indiana ($2,065).

Why does car insurance cost so much more in different states? Each state has its own little car insurance market, with its own state-level laws and policies that affect insurance prices. Some states make it harder for drivers to buy affordable minimum liability-only insurance policies. Different states might have higher accident rates, higher incidence of natural disasters, and higher costs of lawsuits.

Is it ever worth moving to another state because the car insurance costs are too high? For most people, probably not. But if present trends continue, some people in states like Michigan might start to feel like their car insurance costs almost as much as their monthly housing payment.

Bottom line

People who are feeling burned out on car insurance costs should take matters into their own hands and shop around for price quotes. The best car insurance companies might offer a better deal compared to the driver’s current insurance policy.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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