For Georgia drivers, insurance becoming a bigger chunk of monthly payments

Car shoppers weigh several factors before deciding on a vehicle. Buyers typically assess the car manufacturer’s suggested retail price, consider long-term savings from better fuel economy and evaluate financing options.

Insurance coverage is sometimes left as an afterthought in the car-buying process. With so many moving pieces involved in buying a car, insurance can easily fall to the bottom of the priority list.

However, auto insurance may impact your budget more than you think. According to Experian, the average annual cost of car insurance in Georgia is approximately $3,064, or $255 per month, making it a significant ownership expense.

McKynzie Steward is an editor for Kelley Blue Book and Autotrader. (Courtesy)

Why insurance matters when car shopping

Auto insurance is one of the largest recurring costs associated with vehicle ownership. While financing payments eventually end once a vehicle is paid off, insurance remains a necessary expense for as long as you own and drive the vehicle.

For that reason, it’s important to factor insurance costs into the car-buying process. Even if you are satisfied with the monthly car payment you’re offered, higher insurance premiums could significantly increase your overall monthly costs.

How two similar cars can have very different premiums

Two cars could have insurance premiums that differ by hundreds of dollars annually, leading to thousands of dollars in additional costs over several years of ownership. As a buyer, it’s helpful to be aware of factors that might affect your monthly budget.

• Repair costs: Some newer models with more advanced features may be more expensive to insure because they cost more to repair or replace. This is particularly common among luxury vehicles, as parts tend to cost more.
• Performance and power: Similarly, more powerful and sportier vehicles may have higher insurance premiums. Faster vehicles may be associated with a greater risk of crashes and more costly claims.
• Safety features: If your car is equipped with the latest safety features, you may see that reflected in a lower insurance premium. Advanced safety systems can help prevent or reduce the severity of some crashes, potentially leading to fewer or less expensive claims and lower insurance rates.

Factors that affect insurance rates

Many factors affect insurance premiums, from your age and driving record to circumstances beyond your control. For Georgia drivers, certain state-specific conditions can also play a role in determining insurance costs.

• Location matters: Insurance rates often vary by city and ZIP code. Those who live in busier urban areas are likely to pay higher insurance premiums than those in less populated areas. Living in areas like metro Atlanta, which have more traffic and higher rates of theft, may increase the likelihood of claims, which in turn raises insurance prices.
• Vehicle theft risk: Over the years, Georgia has remained among the top 10 states for vehicle theft. Because insurers factor theft risk into their pricing, areas with higher theft rates may see higher premiums. Specific vehicles that are frequently targeted for auto theft may also incur higher comprehensive insurance costs.
• Uninsured motorists: Georgia also ranks among the top 10 states with the highest rates of uninsured motorists, a trend that has been contributing to car insurance costs over time. According to the Insurance Research Council, more than 18% of Georgia drivers do not have car insurance. As a result, many drivers opt for uninsured motorist coverage for additional financial protection, which can increase insurance costs.
• Coverage requirements: The minimum coverage required for drivers in Georgia is 25/50/25, which is shorthand for $25,000 per person and $50,000 per incident for bodily injury liability, and $25,000 per incident for property damage liability. However, these are just the minimum requirements, and the Insurance Information Institute states that experts recommend higher limits. It recommends considering $100,000 of bodily injury liability per person and $300,000 per accident for greater financial protection, though premiums for those higher limits cost more.

Tips for car shoppers

Before purchasing a car, it’s important to research auto insurance costs as part of the buying process. For any vehicle you are seriously considering, you can obtain insurance quotes from insurers online to estimate your potential costs. Compare rates from multiple insurance companies to ensure you are getting the best deal for your needs.

Having an estimate of your monthly insurance premium allows you to incorporate it into your budget when determining how much you can afford to spend on a vehicle. By planning for insurance costs in advance, you’ll be less likely to be surprised by an additional monthly expense after your purchase.

If your quoted premiums still seem too high, it’s worth asking insurers about any discounts they offer. Many insurance carriers offer discounts for bundling auto insurance with other policies or enrolling in safe driving programs.