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U.S. consumers will pay more to insure their vehicles in 2025 than ever before, according to a report by ValuePenguin.
The average cost of auto insurance is expected to reach a record high of $2,101 per year or $175 per month for full coverage, the data showed, with rate increases rising for the seventh consecutive year.
Despite another increase in 2025, the 7.5% rate hike marks “a significant slowdown from the past two years when car insurance rates rose an average of 16.5% in 2024 and 12% in 2023,” ValuePenguin said. “Car insurance prices vary dramatically by state, with coverage in the most expensive states being at least 2.5 times as much as the cheapest states.”
The most expensive states for full auto insurance coverage are Nevada at $286 per month, Florida at $272 per month and Michigan at $263 per month.
Rounding out the top five most expensive states are Louisiana and Colorado at $249 and $241 per month, respectively.
“The three states with the cheapest car insurance barely crack $100 per month for the same policy,” ValuePenguin said. “Maine drivers pay an average of just $103 per month, while neighboring New Hampshire and Vermont are tied at $107 per month — all for the same level of coverage.”
Rounding out the top five cheapest states are Idaho and Ohio at $111 and $115 per month, respectively. According to ValuePengiun, “Those prices are about 40% below the national average.”
Meanwhile, the states with the largest year-over-year rate increases are New Jersey and Washington with a 17.2% jump, followed by California’s 16.2% surge.
“Only one state — North Carolina — has an expected rate drop in 2025 (0.1%). That means North Carolina drivers are the most likely to see no change, or even a slight drop, in their insurance rates next year,” ValuePenguin said.
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