🚗 Auto insurance takes up at least 5% of household income in some states

🚗 Auto insurance rates are rising due to inflation in other sectors

🚗 Drivers are advised to shop around for quotes

As a percentage of income, the cost of automobile insurance in New Jersey isn't that bad, according to a new analysis.

But you could be paying even less — you just need the patience to search for a better price elsewhere.

In New Jersey right now, the average annual premium of $2,555 takes up 2.65% of household income, finds an analysis by Bankrate. That percentage is higher in 28 states; it's as high as 6.5% in Louisiana.

Auto insurers don't base their rates on one's income, but the analysis provides a good assessment of the impact that rates have on drivers from state to state.

In New Jersey and nationwide, rates are up in 2024. As costs related to services such as auto repairs and medical treatment go up, so does the cost of financial protection behind the wheel.

“Auto insurance rates have been rising at a breakneck pace," said Greg McBride, chief financial analyst for Bankrate. "And though the pace of increases will eventually slow, that doesn’t mean premiums are coming down."

Save on auto insurance

The rate you're paying today may not be the best one available in the state.

There are dozens of auto-insurance companies that would like to do business with you, and the risk you carry as a driver may be perceived differently from carrier to carrier.

One company may be interested in the last year of your driving history, while others may look five years back, for example. One carrier may put more weight than others on where your vehicle is garaged, or the ZIP code in which you live

That's why Christine O'Brien, president of the Insurance Council of New Jersey, advises consumers to get two to three quotes, at least, before opting for an insurer.

"Afford yourself the opportunity to shop," O'Brien said. "Most likely, you will find yourself a better deal somewhere."

Across the board, the type and age of the vehicle you're trying to cover will impact the rates you're quoted. Certain vehicle features, meanwhile, can impact different types of coverage in opposite ways. For example, safety technology may make you less likely to get into a collision, but that technology would also be more expensive to repair in the event of a crash.

O'Brien said drivers also want to mindful of their credit score. Carriers use a credit-based insurance score to determine a consumer's level of risk.

Bankrate's analysis is based on a 40-year-old male and female driver with a clean driving record and good credit, driving a 2022 Toyota Camry and commuting five days a week.

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