Do you dread getting a letter from your insurance company? Vehicle insurance has skyrocketed for seven straight years. 2024 saw 16.5% increases sucking the life out of driver wallets. It’s a bit of “good news, bad news” for 2025. While this year is expected to reach the highest point ever, at an average of $2,101 a year in premiums, it will “only” amount to a 7.5% increase. Vehicle insurance rates rising—it’s almost as sure as death and taxes. There are things you can do to throttle back insurance premiums—read on.
A report on the state of auto insurance from ValuePenguin.com gives these lookouts:
News about vehicle insurance rates for 2025
- Auto insurers will raise premiums by an average of 7.5% in 2025—with the biggest rate hikes expected from American Family, All State and Liberty Mutual. Drivers in New Jersey, Washington and California will see their auto insurance premiums rise by more than 15% in 2025—the biggest jump in the country.
- The average cost of full coverage car insurance in 2025 will exceed the $2,000 mark to touch $2,101/year. Nevada ($3,216/year) and Florida ($3,264/year) will overtake Michigan ($3,156/year) to become the most expensive states for auto insurance in 2025.
- Drivers with traffic violations will see their premiums jump 53% on average in 2025, with drivers in North Carolina facing the stiffest financial penalties—an increase of 146% for traffic violations and dangerous driving.
Insuring electric vehicles is getting cheaper in 2025, but insurance for new EVs will still be 23% higher than new gasoline-powered cars. However, insurance premiums for electric cars made by legacy manufacturers like Ford and Volkswagen are 25% less expensive than insurance premiums for cars manufactured by EV-only companies in 2025—with Rivian’s RV-1 and Tesla’s Cybertruck emerging as the most expensive cars to insure.
“Rates are still trending upward”
In 2024, many drivers reported that their vehicle insurance premiums rose significantly more than the rate hikes announced by auto insurers, says Divya Sangameshwar, an insurance expert at ValuePenguin.com. She adds, “Insurers raised rates by an average of 16.5% in 2024, but an analysis by the Bureau of Labor Statistics showed that Americans were paying 19% more for auto insurance on average versus the prior year. The discrepancy is likely due to driver-led factors like new car purchases, traffic tickets, changing credit scores, or changes in coverage. Although rates aren’t expected to increase as steeply in 2025 compared to 2024, rates are still trending upward, and as a result, auto insurance payments will still be a financial strain for some in the new year.”
Will rate hikes continue to slow down in 2026 and beyond? According to Sangameshwar, “If things continue the way they are right now—yes. However, if President-elect Donald Trump goes forward with his plan to impose tariffs on imported goods, insurance rate hikes could speed up again. In fact, 60% of replacement car parts are imported from other countries like China. Higher costs for parts could mean higher repair prices and more expensive claims, which will result in a bigger rate hike in 2026 and beyond.”
Putting the brakes on your own insurance costs
So how can you put the brakes on the speeding cost of insurance? Is there a way to cut the cost of your vehicle insurance rates?
- Compare insurance quotes: With some insurers raising rates more than others—comparison shopping during each policy renewal period will continue to be one of the best ways to save money on auto insurance in 2025. Drivers who shop around could save as much as $2,436/year. Drivers should compare prices from at least five insurers, or more if they have a recent incident that could raise your rates even more.
- Research discounts: Insurance companies offer many discounts to help you lower your rates. Bundling home and auto insurance policies reduce prices by 18%, and bundling multiple cars into one policy can offer savings of up to 25%. Insurance companies give you discounts for taking actions that make you less risky to insure. This includes a 10-15% discount for drivers who take a defensive driving course, a 10% discount for safe drivers who’ve been accident-free for more than 5 years and a 20% discount for drivers with low mileage use.
- Adjust coverage: Liability-only car insurance is 153% cheaper than full coverage car insurance—but it is a risky option due to its limited coverage and should be considered as a last resort. Drivers looking to adjust their coverage can focus on raising their deductibles, and removing optional coverage like roadside assistance, to bring down their car insurance costs.
- Improve credit score: Insurers in almost every state use credit history to set rates. Americans with a poor credit score pay as much as 88% more for car insurance and are 19% more likely to have had trouble affording car insurance. Improving your credit score is a great way to bring down vehicle insurance rates in 2025.
RVers may find help in this experience
And as RVtravel.com’s own Nanci Dixon found out, if you’ve already gotten a bad-news bill, there’s still more you can do. Read about it here.
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This an interesting article as relating to auto insurance. There was no mention of RVs in the mix. After many years I just moved my car and motorhome from Good Sam National General to FMCA Progressive. While the car portion became more expensive the lower cost of the RV resulted in a net reduction of cost. Still, the overall premium strikes me as being more expensive than I find comfortable to pay. My wife, a long-retired attorney, found that some people insured with AAA were not as satisfied with collected compensation as those from some other insurers. I don’t know about now but long ago people warned me to stay away from any insurer that had Farm in their name.
Thank you for the news Russ and Tina! Hmm, … did just get a semi-annual bill. Wonder how it changed. Is affected by home and umbrella bundling. Also insuring 4 vehicles, counting the farm truck. Have a great day and safe travels! 🙂
I use USAA..better deal than the other thieves. Just wait until all the current fires in California are out…the rates will no doubt explode after that.
Most insurance companies stopped offering fire insurance in California a couple of years ago. They told the state a rate increase was needed due to bad forest management and bad water management which had in turn created increased risk to them. The State said “NO RATE INCREASE”so they quit offering it all together. How is that working out for you Newsom?
That is how predictable this fire was. Incompetence and criminal negligence.
This is BS
Don’t recommend Erie’s rate lock insurance. Every time you get a new vehicle, change your address or make a change to your vehicle insurance policy they raise your rate. Either Erie or their agent slipped me into the rate lock without telling me. Agent didn’t tell me why my rates were going up every-time I got new vehicles until we had a fight. Then she lied and said I couldn’t get out of it until policy renewal. Which wasn’t true.
Our insurance premium here in NV is $2566 for the coming year. That includes a 2016 F-350 with added coverage for the “Pickup Pak” on the rear. We also insure a 2014 Expedition EL, a covered utility trailer for our RZR, and our 2012 Arctic Fox 25Y. Our deductible is $500. Not sure where the article got the Nevada ($3,216/year) from.
But what about the prices of eggs?