How Much Does New Car Insurance Cost?

The National Association of Insurance Commissioners says that liability insurance alone costs $538.73 per year. But you need to know how much you may actually end up paying. Insurance companies use several factors to determine your insurance premium. The type of car your drive is just one of them. Your insurance costs also depend on the carrier, so it’s a good idea to get multiple quotes for your new car.

The main things that impact the price of a new car’s insurance are:

Price: The cost of insurance is directly proportional to the cost of the car. If you finance the car, the lender will insist that you get comprehensive and collision coverage so that their interests are protected. If you have a luxury car and it gets stolen or damaged beyond repair,  your coverage provider will be required to pay for it.

Parts: New cars often have parts made from exotic materials like carbon fiber or other expensive materials. These parts are expensive, the repairs associated with them also cost more, and therefore your insurance will cost more.

Safety: A lot of new cars are equipped with innovative and high-tech safety features. These cars are safer and mean that you will have fewer injuries in case of an accident, and your medical bills will be lower.

The cost

The average cost of auto insurance across the United States of America is $1099 per year. It’s $538.73 per year for state-mandated liability insurance and an additional $322.61 per year for collision and $148.04 per year for comprehensive coverage. Now it differs from state to state because the population levels, crime and accident rates, and certain state laws decide what the actual amount will be.

The type of insurance coverage also affects the price of the monthly premium you pay. You should always have liability insurance that protects you financially when you are at fault in an accident. There is also comprehensive and collision coverage that protects your vehicle. These are not required by law, but may be mandatory as per your sales contract.

There are plenty of guides available online, and you should check those when you’re shopping for a new car and a new auto insurance policy.

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