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How much am I going to pay for Auto Insurance?

The average cost to insure a vehicle in the United States is approximately $1,500 per year.

Unfortunately, the average cost does not provide you with much information about what you could potentially pay. There are so many variables that come into play when it comes to your premium.


The average cost in Pennsylvania is approximately $1,200. The average cost in New Jersey is about the same as the National average of $1,500. Both of these can vary widely depending on if you are driving in Philadelphia or say Lancaster County.

The types of variables that affect your premium:

1. The type of car you drive

2. Your credit score

3. The number of accidents that you have had

4. The number of tickets that you have

5. The type and amount of coverages combined with the deductible you choose

6. Your demographics


More about each of these variables below:

1. The type of car you drive – If your car is fast or pricey, then you are going to pay more

premium. A faster car will probably be driven faster and is more likely to get into an accident. You can also get discounts for safety equipment.


2. Your credit score - Insurance companies have a lot of data to show that drivers with higher credit scores have fewer claims. The data shows that the lower your credit score is, the more likely you are to file a claim. The credibility of the data becomes stronger and stronger every year. You can lower your premium by increasing your credit score.

3. The number of accidents that you have had – the data shows that by filing a claim, the average increase in next year’s premium is almost 50%. The data shows that the more claims that you have, the more increased risk that you will have another claim.

4. The number of tickets that you have - the more tickets and violations you have, the higher your rates are going to be. The type of violations means something also. Speeding 5 miles over the speed limit is not going to have the same effect as getting a reckless driving violation or a DUI.


5. What limits do you feel you need? Usually, they are not high enough. What deductibles do you want? Most people purchase lower deductibles then are needed. My philosophy is to choose higher limits and higher deductibles. There is less chance of getting into real trouble. A lot of people will put the money they save with a higher deductible away and end up with more money in the long run, especially if you don’t generally have accidents. If you’re not required to have comprehensive or collision, it might make sense to drop this coverage if your car’s value is very low.



6. Your demographics - Your age, sex, marital status, location, and other factors are all

important when it comes to influencing your premium. Again, and I keep saying this, the insurance company has a tremendous amount of creditable data to work with. They know how these factors influence the chances of you filing a claim. It all comes down to the fact that Insurance Companies are looking for those people who have less chance of filing insurance claims.

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