Car insurance premiums in the U.S. vary dramatically by state — sometimes by more than double. Factors like local laws, population density, weather patterns, and accident rates all influence what you pay. So, where can you find the cheapest auto insurance in America in 2025?
We’ve analyzed the latest national data, insurance reports, and policy trends to uncover the most affordable states for car insurance this year. Whether you’re moving or just looking to compare, here are the top contenders for low-cost coverage.
1. Maine
Average annual premium: $875
Consistently ranked as the most affordable state for auto insurance, Maine benefits from low traffic density, low theft rates, and a high percentage of insured drivers.
2. Vermont
Average annual premium: $910
With a strong driving culture, minimal urban congestion, and fewer uninsured motorists, Vermont offers some of the lowest rates in the nation.
3. New Hampshire
Average annual premium: $940
Interestingly, New Hampshire doesn’t require car insurance by law — but most drivers still choose to be covered. Competitive markets help keep premiums low.
4. Idaho
Average annual premium: $960
Idaho’s sparse population, low accident rates, and lower-than-average repair costs contribute to its budget-friendly insurance rates.
5. Ohio
Average annual premium: $980
Ohio is home to many major insurance companies, which helps keep rates competitive. Drivers here enjoy broad options and consistent affordability.
6. Wisconsin
Average annual premium: $995
Wisconsin’s combination of strict driving laws and solid infrastructure makes it one of the best states for drivers — and their wallets.
7. North Dakota
Average annual premium: $1,000
North Dakota boasts low population density and minimal urban sprawl, helping keep claims (and premiums) down.
8. Iowa
Average annual premium: $1,015
Iowa offers affordable rates thanks to its stable economy, low crime rates, and generally safe drivers.
9. South Dakota
Average annual premium: $1,025
With few large cities and a strong rural population, South Dakota keeps insurance costs well below the national average.
10. Alaska
Average annual premium: $1,050
Despite its weather and remote roads, Alaska surprises many with its moderate rates. Limited traffic and low theft rates help balance costs.
What Affects Insurance Rates by State?
- Population density – More cars = more accidents = higher premiums
- Weather conditions – States with frequent storms or snow see more claims
- State insurance regulations – Some require higher minimums or stricter penalties
- Repair costs – Labor rates and parts availability vary by region
- Uninsured driver rates – More uninsured drivers = higher costs for everyone
Top 10 States for Cheap Auto Insurance in 2025
| State | Average Annual Premium | Main Cost-Saving Factor |
|---|---|---|
| Maine | $875 | Low traffic and theft rates |
| Vermont | $910 | Few urban areas, low accident frequency |
| New Hampshire | $940 | No mandatory insurance laws, competitive market |
| Idaho | $960 | Low accident and repair rates |
| Ohio | $980 | High insurer competition |
| Wisconsin | $995 | Strong traffic enforcement and safe roads |
| North Dakota | $1,000 | Low population density |
| Iowa | $1,015 | Safe driving culture, low crime |
| South Dakota | $1,025 | Few large cities, fewer claims |
| Alaska | $1,050 | Low theft, limited traffic congestion |
Final Thoughts
If you live in or are moving to one of these 10 states, you’re in luck — your auto insurance premium is likely to be significantly lower than the national average. And no matter where you live, comparing quotes from multiple providers is still the best way to get the lowest rate in 2025.
Use this list as a starting point, and remember: safe driving, bundling policies, and maintaining good credit can lower your rate even more — no matter your zip code.